A possible option for Raiffeisen Bank International (RBI) to separate the Russian subsidiary from the rest of the company must be negotiated informally with the Kremlin, according to a leading Moscow trade lawyer. In any event, if the main owner of the demerged parent company were to change as a result, formal approval from the Kremlin would be required, TA Legal Consulting’s managing partner Marat Agabalyan said Monday.
While he assumes a spin-off will be discussed with the Kremlin as an option, any actual change of main owner would require approval from a committee of the Russian president, the expert stressed.
Putin decree of August 2022
Because although Vladimir Putin’s decree of August 2022 talks about a transfer of ownership in Russian legal entities, the situation is different: “In practice, no one would risk circumventing a decision of the Presidential Commission, even if the transfer of ownership takes place at the level of a parent company abroad,” explains the company lawyer.
Agabalyan said that this Kremlin committee was recently involved in the departure of shareholders of the Cypriot parent company of a Russian oil company and has made a formal decision.
What would a spin-off mean for RBI shareholders?
At his bank’s general meeting on Thursday, RBI chief Johannes Strobl cited a sale of Russia’s Raffeisenbank and a spin-off of the bank from the main group as targeted scenarios for his bank. In a spin-off, RBI shareholders would then own two shares: one for RBI ex-Russia and a second for the Russian operations. According to legal requirements, the shares of the second company would also be listed on a stock exchange in the European Union, probably in Vienna.
“Not an easy walk”
“It’s not an easy walk either,” Strobl summarized. Selling requires an unauthorized buyer, approval from five government agencies, and an offer that reflects your values. “The Russian presidential office determines the purchase price, which can be up to 50 percent of the value determined by a Russian appraiser. After that there is an ‘exit tax’ for this purchase price, an emigration tax or something like that,” he explains.
In the case of the spin-off, the topic would be a little different, as the pricing topic wouldn’t come up at this stage, Strobl explains. However, any transfer of ownership requires the approval of Russia’s central bank, Strobl said. Since the shareholder does not withdraw, the Russian presidential administration is not needed in this case, he explained. However, he speculated that a possible “exit tax” could still be due from the RBI shareholder. This question will have to be clarified, the RBI boss said.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
