Sovcombank will announce on Friday, February 7, the completion of a transaction to buy GE Money Bank from US-based giant General Electric, RBC daily and business daily Kommersant wrote. According to the bank’s source of RBC daily, the transaction was partly funded by a 60-year subordinated loan of Rub 2 bln which was granted by Dutch parent company Sovco Capital Partners B. V. (it holds 100% of the bank).
The bank’s beneficial owners are Moscow developer Pavel Fux (24.48%), Sergei and Dmitry Khotimskys (roughly 19.83% and 10.81%, respectively), Mikhail Klyukin (12.29%), M.Video board member Mikhail Kuchment (about 7.29%), Alexei Fisun (5.97%) and the bank’s management board chairman Dmitry Gusev (5.95%). As the RBC daily source said, Sovco Capital Partners B. V. issued additional shares worth Rub 2 bln. The additional shares were bought by its shareholders, and Fisun’s interest grew from 5.97% to 16%, while equity stakes of the other shareholders reduced. Fisun is known to own various commercial real estate facilities, including office center Riga-Land.
During an interview with Kommersant Sovcombank co-owner Sergei Khotimsky said no word on the transaction price, but specified that after its closing each bank would have the capital adequacy ratio of around 13—13.5%. Given the current capital adequacy ratios and the capital of both banks said № 1 will be achieved if the deal is worth Rub 5.5—6 bln, Kommersant wrote quoting experts. Given GE Money Bank’s capital of Rub 9 bln (CBR’s data as of January 1) the deal will be transacted at a multiple of 0.61—0.66%, i.e. at a discount of over 30%. Although in September, as Kommersant noted, when the parties were in talks over the terms of the transaction and private pension fund Blagosostoyanie, apart from Sovcombank, also eyed GE Money Bank, the discount of 15—20% was at issue.
Other terms of the transaction also changed, Kommersant wrote. Specifically, initially the parties discussed that during 12 months after the transaction GE Money Bank employees cannot be laid off, but eventually this term vanished. “This is no such obligation now. There will be some downsizing, but during the year we’ll stick to the dismissal payment policies, which are applied at GE and are more employee-friendly than the Russian Labor Code," Sergei Khotimsky told Kommersant. According to him, both ordinary employees and executives will be dismissed.
