Sources Financial Times said that billionaires Mikhail Fridman and Petr Aven are ready to get rid of their shares in order to achieve the lifting of the sanctions imposed against them. According to the publication, Andrey Kosogov, a longtime partner of the founders of the bank, agrees to buy shares for $2.3 billion.
Russian billionaires Mikhail Fridman and Pyotr Aven are ready to sell their stakes in Alfa-Bank to longtime business partner Andrey Kosogov for 178 billion rubles ($2.3 billion), the Financial Times writes, citing four people with direct knowledge of the agreement and a detailed description of the terms of the deal. “(They) want to do everything they can to get out of their Russian assets and lift (themselves) sanctions,” one source with knowledge of the deal told the newspaper.
Kosogov confirmed to the publication that the deal had been agreed, but declined to comment further. Forbes sent a request to the press service of Alfa-Bank and is waiting for comments from Fridman and Kosogov. Aven declined to comment on Forbes’ request. FT Friedman and Aven did not comment on the information about the possible deal.
Fridman and Aven own more than 45% of Alfa-Bank (Friedman owns 32.9%, Aven 12.4%) through the Luxembourg holding company ABH Holdings, which in turn controls the bank’s Cypriot parent company. Fridman, Aven, as well as their partners German Khan and Alexei Kuzmichev, came under EU and UK sanctions in 2022. After that, Khan and Kuzmichev transferred their shares in ABH Holdings to Kosogov, as a result of which the share increased to 41%, writes FT.
The deal to sell the bank is “beautiful on paper” as the agreement between Kosogov and the Cypriot parent company will not have either side sanctioned, one source familiar with the FT said. According to the publication, the deal should be completed this spring, but it will first have to be coordinated with regulators, including the Bank of Russia. In addition, US and EU regulatory approvals may be required. Two FT interlocutors noted that it would be difficult to obtain regulatory approval in several jurisdictions, which could delay the completion of the deal.
One of the Forbes sources, close to the shareholders of Alfa-Bank, said that it would not be easy for Fridman and Aven to sell the shares, since they do not own them directly, but through a Luxembourg holding. The shares of the bank holding belonging to Fridman and Aven are frozen, since their owners are under EU sanctions, and in order to sell them, you will need to obtain special permission from the European Commission, the source said.
The sale of Alfa Bank should ease pressure on the bank in Russia, as the Kremlin’s retaliatory sanctions against “unfriendly” countries have created governance difficulties and impacted the bank’s ability to secure government funding, sources told the FT. “Friedman and Aven avoid sanctions, Kosogov gets the bank, and the bank has one single Russian shareholder,” one of the sources of the publication explained the plan of the deal. At the same time, the founders of Alfa-Bank did not receive any guarantees that the sale of the bank would convince the EU authorities to lift sanctions from them, the FT notes.
In a statement issued in February ahead of the EU’s tenth round of sanctions, ABH Holdings said it urgently needed to get rid of Alfa Bank “to avoid further regulatory, political and reputational consequences,” writes the FT. The statement said that owning the bank had become “toxic” to its beneficiaries, who were “seeking to maintain their status as international investors.” Shares in the Luxembourg company are also owned by the Italian bank UniCredit and the oncology fund, which is led by a former top manager of Alfa-Bank, the newspaper notes.
The European Union included Fridman and Aven in the sanctions list shortly after the start of the Russian “special operation” * in Ukraine, on February 28. The billionaires called the sanctions “unreasonable” and challenged them in court. Alfa-Bank itself came under EU sanctions in the tenth package.
Andrey Kosogov from 1992 to 1998 served as CEO of Alfa Capital Management Company, and from 1998 to 2005 he was the first deputy chairman of the board of Alfa-Bank and head of the investment block. After the start of the “special operation”, he managed not to fall under any sanctions, except for Ukrainian ones. In 2022, Kosogov took 76th place in the ranking of the richest Russian businessmen. His fortune was estimated at $1.2 billion.