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Rosbank is likely to place its additional share issue at above fair value and the issue will likely be picked up by Société Générale, a Rosbank majority shareholder. Given that the scale of the issue is not large, the placement price is relatively high and the company’s current shareholders have a pre-emptive right to buy out the shares, the placement should not be to the detriment of minority shareholders.
It was reported on December 1 that the Rosbank BoD had given the green light to an additional issue of 28.1 million common shares. The issue will be distributed on an open subscription basis. The offer price is set at USD 5.37 (RUB 150) per share with the intention of raising USD 151 million, or RUB 4.2 billion.
We estimate that the shares will be placed at above their fair value, but that Rosbank minority shareholders will not suffer from the additional share issue as those shareholders wishing to buy out their shares should have the pre-emptive right to do so. Given the high offer price, it is likely that a major chunk of the issue will be picked up by French bank Société Générale, a Rosbank strategic shareholder with a controlling share package. Given the low scale of the issue, at 3.9% of the bank’s capital, current shareholdings should not be diluted much by the issue.
Our estimates put the fair value of one common share in Rosbank at USD 3.76, with an upside potential of 9.3%, which corresponds to a HOLD recommendation. Konstantin Romanov
Other comments of the day
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Rosbank
Capitalization: $2 177 153 721,60
Common shares:
Price: $3,20
Delta week: -1,7%
Delta month: -4,2%
Delta year: -56,2%
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0.244
0.616
