VTB Selling EADS Stake for $1.4Bln

State-controlled bank VTB has agreed to sell its 5 percent stake in European aerospace company EADS for about $1.43 billion to the state-owned Development Bank, a source close to the Development Bank board said Thursday.

The sale, which was approved Dec. 20 by the board of the Development Bank, formerly called Vneshekonombank, ends an investment that drew fire from investors during VTB's $8 billion stock market float earlier this year.

The price for the stake in Airbus maker European Aeronautics, Defense and Space Co., at 24.23 euros ($35) per share, is at a premium to Monday's closing level of 22.56 euros and values the 41 million shares at around $1.43 billion.

That compares with a valuation for the stake in VTB's accounts of $1.40 billion at the end of 2006 and $1.24 billion at the end of September, suggesting that VTB may be able to book a one-off gain from the sale.

"The stake price is 2 percent above the valuation in the year-end accounts for 2006, and 16 percent above the estimate at Sept. 30, 2007," said Svetlana Kovalskaya, an analyst at Renaissance Capital. "That gives a gain of nearly $200 million, which is significant in relation to the profits we are forecasting."

VTB chief executive Andrei Kostin has said state-owned United Aircraft Corporation will be the final buyer of the stake, which the government bought last year hoping to win a strategic say in EADS.

EADS's core shareholders, France and Germany, rebuffed that approach, but an eventual purchase by the United Aircraft Corporation would create minority cross-shareholdings that may serve as a basis for a future partnership.

EADS owns a 10 percent stake in Irkut, the maker of the Sukhoi fighter jet and one of several companies being folded into the United Aircraft Corporation.

Finance Minister Alexei Kudrin, a member of the Development Bank's supervisory board, has supported its plans to buy stakes in companies abroad.