About us / Project Groups

Project Group №2 →

Corporate law and governance, financial transaction taxes

Project Group №1

Financial infrastructure and financial market regulation


Back to Media

Government May Use Sberbank SPO as Template for Privatization

05.10.2012 19:23 / vedomosti.ru

The recent Sberbank SPO offered investors two purchase methods: OTC through bookrunners and directly through Moscow Exchange. The Exchange had an advantage: 10% (with 15% top mark) of Sberbank stock was reserved for the Exchange, with 100% bids allotted within that range. All other bids were allotted arbitrarily.

The scheme was specifically geared towards supporting Russian infrastructure, confirmed a Central Bank source and a government official. A mere 3% was floated through the exchange, however this approach is possible in more privatizations to follow, said government official: "This will be decided separately in each case". "The Exchnage should have an advantage", said another source.

The method was used for the first time, but it is not about forcing investors to the exchange, says Moscoe Exchnage CEO Alexander Afanasiev: it could have happened had there been just one book, but there were several, and there is nothing wrong with pushing economic buttons to create a preference for the domestic market. "This is common practice for local markets", says Afanasiev. "There are other methods as well, such as domestic market discounts".

Now that the mechanism is up and running, other companies can use it, and these will probably be quality issuers, since others are of little value for small investors, says Deputy Chairman of Sberbank Bella Zlatkis.

Not all Sberbank bids were allotted 100% automatically, only the really small ones mainly from individuals, she says. A protfolio manager told us that his RUB 100mn bid through the exchange got him what he wanted. The estimate was 10% of the stock, there were fewer bids and all of them were covered, says a Central Bank official. "We received only 30% in Moscow through the bookrunners", laments another portfolio manager whose bid was for RUB 1bn. Two of his colleagues received roughly a third through the bookrunners.

It is just a fraction of support that domestic investors need, and if the government is keen on helping them, this is a welcome step in the right direction, says General Director at Capital Asset Management Andrey Gritsenko: "Let`s hope it is not just this one time".

Anton Trifonov, Maxim Tovkailo

Project Group №1