© Reuters. FILE PHOTO: The logo of Raiffeisen Bank International (RBI) is seen at its headquarters in Vienna, Austria, March 14, 2023. REUTERS/Leonhard Foeger/File photo
By Tom Sims
FRANKFURT (Reuters) -Raiffeisen Bank International, one of the banks in Europe most exposed to Russia, plans to take a nearly 28% stake in Austrian construction group Strabag via a deal with sanctioned Russian businessman Oleg Deripaska.
The deal comes as RBI studies an exit of its Russia business and Strabag looks for ways to reduce Deripaska’s stake. If successful, the transaction could help to achieve these goals.
Russia has tightened exit requirements since thousands of Western companies started leaving soon after Moscow began what it calls a “special military operation” in Ukraine in February 2022. Executives say navigating these rules is becoming harder.
The transaction is subject to approval of Russian authorities and a review by both companies for possible sanctions breaches.
Under the deal announced on Tuesday, the Austrian bank is to acquire 28.5 million shares in Strabag through its Russian subsidiary for 1.510 billion euros ($1.66 billion), a move that would reduce the equity of Raiffeisen’s Russian subsidiary.
The Strabag stake is being sold by Russia-based Rasperia Trading Limited, a company belonging to Deripaska.
“With this transaction, RBI further reduces its exposure to Russia,” RBI said.
Strabag said a divestment by Deripaska would be in the company’s interest but that “a detailed sanctions review of the transaction” was needed.
A representative for Deripaska, who is subject to Western sanctions imposed due to his perceived Kremlin links, had no immediate comment.
Russia’s central bank and finance ministry, which heads the government commission on foreign asset sales, did not immediately respond to requests for comment.
Shares of RBI were up 8.3% in Vienna on Wednesday, while Strabag gained 7.3%.
RBI had been studying a spin-off or sale of its business in the country but had warned that an exit might take some time and was “highly complex”.
RBI said it would continue to work on a sale, or a spin-off as a fallback.
The European Central Bank at the same time has been keeping up pressure on the region’s banks to loosen ties with Russia.
RBI’s Russian subsidiary will ultimately transfer the Strabag stake to RBI, which it said it would hold as a long-term investment.
($1 = 0.9112 euros)