The founder of Russian lender TCS Group sold $150 million of its global depository receipts (GDRs) on Thursday, the second time this week that a Russian billionaire has cashed in on investment amid favorable market conditions.
Russian businessmen Roman Abramovich and Oleg Tinkov offloaded some of their respective stakes in their companies through accelerated bookbuilding deals (ABB), which investment bankers said demonstrates continued global interest in certain Russian assets despite sanctions and a challenging business environment in the country.
Abramovich and his partners sold $551 million of shares in mining giant Norilsk Nickel on Wednesday. The shares represent a 1.7 stake in the company and were mostly bought by British-based investors.
On Thursday, TCS founder Tinkov reduced his stake in the group to 43.8 percent from 48.3 percent by the sale of GDRs.
Tinkov said he decided to offload some of his shares after buying them in 2018 at times of elevated market volatility.
“Now, when the price of our shares has stabilized once again, I’ve sold a part of my stake back to the market. This, I hope, would contribute to a further increase in the shares’ liquidity,” Tinkov said.
TCS global depositary receipts (GDRs) dropped 5.4 percent to $18.52 on the London stock exchange by the end of the day on Thursday, having traded from $15.18 to $20.45 so far this year.
Despite a wide range of economic sanctions against Moscow and the prospect of more such measures, these transactions send a positive signal to exporters and commodities producers on the quality of Russian assets, three Russian investment bankers told Reuters.
“This is a very good signal for the market,” one said. “In the current conditions there is absolutely no reason for them (owners) to hold on to 70 percent stakes.”
Dmitry Bolyasnikov, executive director of equity capital markets at VTB Capital, which arranged the Norilsk Nickel deal, said it showed significant demand for high-quality Russian assets.
The United States and other Western countries have imposed a series of sanctions on Russian officials, companies and banks since Moscow’s annexation of Crimea from Ukraine in 2014.
This has changed the landscape of business in Russia significantly and forced investors and company owners to adapt.
When asked why a 1.7 percent stake in Norilsk Nickel was sold, Alexander Abramov, co-owner of Abramovich’s Cyprus-based company Crispian that sold the stake, said: “The price is good, look at the stock ticker. The emerging markets index is at the top right now, it’s the right time to sell.”
Although bankers said the string of ABBs could provide momentum for similar deals at other companies, they said they could not predict how long interest in such deals would last.
“The question of whether this movement is a one-off or will be a catalyst remains open,” another investment banker said.