Daily Vedomosti has reported that the City of Moscow plans to buy 75% of the new RUB 20bn share issue (at RUB 952 per share) of Bank of Moscow, expected to be approved on June 15. This would lift the ownership of the City of Moscow to 48%, and its control (including shares held by Capital Insurance Group) to over 60%. Following the new issue, the bank plans to seek a matching investment from VEB.
The level of the new share issue was announced previously and it was known to have had shareholder support. What is new here is that the City of Moscow will be lifting its ownership level, whereas we had previously assumed that Bank President Andrei Borodin and deputy board chairman Lev Alaluev would seek to lift their combined stake of 23.07% to a blocking stake of 25% via the issue. The news is expected to have a neutral impact.