BELARUS NEWS AND ANALYSIS

DATE:

27/11/2007

Belarusbank to sell up to 10% of shares and start IPO preparations in 2008

LONDON. Nov. 27. (Interfax) - Major Belarusian bank ACB Belarusbank will start selling a share packet, which could reach up to 10% of the bank's share capital, and preparing for an IPO in 2008, the chairperson of the bank's executive board, Nadezhda Yermakova, told Interfax in London.

"Next year, we will start selling a packet of up to 10% of shares and preparations for an IPO," Yermakova said. "We have agreed upon this with the chairman of the National Bank's supervisory board and Belarusbank's executive board," she said.

According to Yermakova, potential investors will examine the bank throughout 2008 and, in this regard, a deal will not be finalized earlier than 2009. The development program for the Belarusian banking system foresees the state maintaining stakes in the four largest banks, including Belarusbank, until 2011. "However, we found it necessary to move this period forward," Yermakova said. "The next phase will be Belarusbank's IPO, which could take place in 2010," she added.

In addition, Yermakova said that Belarusbank had already received actual share purchase offers from three investment banks. "We are looking into these offers, however, a definite investor will be selected on a competitive basis," she added.

The approximate market value of a 10% stake in Belarusbank exceeds its balance sheet value by five to 10 times and, therefore, would come to between $500 million and $1 billion.

Yermakova added that the sale of a 10% share packet would not bear any risks in regards to the bank's manageability and would, instead, increase its capitalization, which is especially relevant for maintaining high economic growth in Belarus. Belarusbank plans to place its debut Eurobonds issue in the first half of 2008, which will come to $200 million, she said. These funds will be put towards investment projects in machine building, railway transport, industry, building materials production and the power sector.

"The cost of these resources will be quite high," Yermakova said, owing to increasing costs on the international financial market. "Inexpensive monetary resources are unforeseeable in the coming years and there are no other options. We will lower them through our interest margin," she said.

Belarusbank is currently in negotiations with various investment banks, including Nomura, ABN Amro, Credit Suisse and BNP Paribas, to organize the Eurobonds issue. "We will choose a party with the most inexpensive resources," Yermakova said. In addition, Belarusbank plans to raise a subordinated loan in 2008, repayable in a period between five to 10 years, she added. The loan would come to $50 million-$100 million.

Belarusbank also plans to raise a syndicated loan coming to more than $100 million next year. The bank intends to increase the term of repayment to two-three years, Yermakova said. During the opening of the Belarusbank Opens Investment and Business Opportunities in Belarus conference in London, Yermakova announced that the bank was also analyzing the possibility of forming investment-banking subsidiaries for Belarusian companies and banks, which plan to raise external resources. In addition, Belarusbank plans to form a joint venture in the forfeiting and factoring sector, as well as joint ventures with foreign partners in international leasing.

Yermakova said that Belarusbank's entry onto foreign markets was driven by the need to support Belarus' high economic growth. In the future, the bank will publish auditing reports according to international standards.

She also said that next year Belarusbank would sign an agreement to receive ratings from the international agency Standard & Poor's, in additional to current ratings provided by Fitch and Moody's. By 2010, Belarusbank plans to increase assets to $10 billion from its current $7 billion.

State-owned Belarusbank was ranked 21st by asset value among CIS banks and first among 27 Belarus banks in 2006 in the Interfax-1000: CIS Banks Review, compiled by the Interfax Center for Economic Analysis (CEA).

Source:

http://www.interfax.com/3/340124/news.aspx