Russia hires Merrill Lynch to handle asset sale: official

9th November 2010, Comments 0 comments

The Russian government has hired Bank of America Merrill Lynch to handle the sale of a 10-percent stake in state bank VTB, the first major sale in a new privatisation drive, the Russian bank said on Tuesday.

"Merrill Lynch is going to organise the transaction for the sale of 10 percent of the shares in VTB," a bank spokesperson told AFP.

The Vedomosti daily said it was the first time that Russia has hired an outside agent to handle a state asset sale rather than the state asset firm Rosimushchestvo.

"Merrill Lynch fits the criteria that the government has set for this transaction better than anyone else," Dmitry Peskov, the spokesman of Prime Minister Vladimir Putin, told the paper.

Russia last month unveiled a huge five-year privatisation drive worth 60 billion dollars (43.3 billion euros) in a dramatic return to such sales which were largely mothballed in recent years after the chaotic privatisations of the 1990s.

According to press reports, the VTB stake could be acquired by a pool of investors headed by the US investment fund TPG. It does not appear any of the shares will be sold on the open market.

Deputy Prime Minister Igor Shuvalov, the government's pointman for the privatisation drive, has said the VTB sale alone should reap some three billion dollars for the state coffers.

The government has returned to privatisation in a bid to find new sources of income for the budget which has plunged into deficit after the economic crisis following years of surpluses in the era of high oil prices.

Along with Merrill Lynch, the government has approved nine Russian and foreign investment banks to take part in the new privatisation drive, including Deutsche Bank and Goldman Sachs, Vedomosti said.

© 2010 AFP

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