Ukrsotsbank to double share capital

Ukrsotsbank CEO Boris Tymonkin said yesterday the bank plans to boost its share capital by 94.5% or USD 150 mln, subject to approval at an AGM on April 20. No other details were provided.

Olena Zuikova: We expect the bank will sell shares at par of UAH 0.1 (vs. current market of UAH 0.2), which means the size of the prospective capital injection will equal 18% of the bank’s end-2011 equity. With no clarity on the purpose of the deal so far (either to support a merger with UniCredit Bank Ukraine or simply to enhance capital buffers), the effect for minorities is hard to estimate. Meanwhile, we recommend holding the stock – the bank will be obliged to buyback shares from minority shareholders who vote against the capital increase at the AGM at UAH 0.204/share (closing price as of Mar. 16), according to Ukrainian legislation that went into effect last year. This should prevent the price from falling below the current level.