VTB thinks about issuing “non-infecting” shares with sanctions

VTB is considering the option of carrying out an additional issue of special ordinary shares, Dmitry Pyanov, a member of the VTB board, said at the bank's shareholders' forum. The scenario of their issue can be used to resolve the issue of repurchase of two types of VTB preferred shares, which are owned by the state.

According to Pyanov, the issue is "actively being worked out," but the usual scenario for an additional share placement creates sanctions risks for VTB.

Since 2014, VTB has been under sectoral sanctions from the United States and the European Union. Citizens and companies from EU countries are prohibited from buying or selling new shares, bonds or "similar financial instruments" with a maturity of more than 30 days issued by a bank, for the United States the restriction is 14 days. The credit institution tried to challenge the European restrictions in COURT, but to no avail. Last year, the bank called the additional issue “technically impossible”.

What does VTB offer?

"Our common shares all have a specific ISIN, a security code (ISIN, International Securities Identification Number - an alphanumeric code that uniquely identifies a security. -), these shares were issued before the 2014 sanctions regime, and it is very important to us" do not infect” with this transaction the code of an ordinary share, clearly dividing the ordinary shares of the pre-sanction period and the post-sanction period, ”Pyanov explained the problem. He stressed that Russian sub-sanctioned companies have not yet used this issue option and VTB is consulting with foreign lawyers on this issue.