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Bank of New York becomes nominal holder of VTB's 14.6% stake

The Bank of New York has become a nominal holder of 14.625% of shares floated by Russian state-controlled foreign trade bank Vneshtorgbank (VTB) during an initial public offering (IPO), VTB said Monday.

VTB, Russia's second largest bank in terms of assets and equity, floated 1,513 billion newly issued ordinary shares in the global offering, representing 22.5% of its enlarged share capital and implying a post offering market capitalization of $35.5 billion, the bank earlier said.

The offering price was set at 13.6 kopeks ($0.53) per share or $10.56 per Global Depositary Receipt (GDR), with each GDR representing 2,000 shares. During the IPO, VTB raised 57.685 billion rubles (about $2.2 billion) and $5.749 billion, the bank said. VTB, which floated 65% of its global offering in London and 35% in Russia, intends to use the proceeds to support the ongoing expansion of its business, including the expansion of its retail banking operations in Russia, the bank said.

Following the global offering, the Russian government's stake in VTB has dropped from 99.9% to 77.47%, the bank said. The Bank of New York, which acted as a depositary for VTB's GDRs, has recently been embroiled in a row with Russian customs authorities. The Federal Customs Service on May 17 accused the bank of laundering untaxed profits of Russian exporters in 1996-99 and said it had filed a $22.5 billion damage lawsuit with the Moscow Arbitration Court.

Experts doubt that customs authorities will recover the entire sum they are claiming, but lawyers acting for the service said their claim was legitimate as the bank had admitted that $7.5 billion had been laundered at the time, and under US law the plaintiff can demand compensation three times greater than the original loss. The bank, which pleaded guilty of violating US laws on control over financial flows in 2005 and was ordered to pay a $38 million fine, dismissed the new claim. (