Owner Says Troika To Stay Independent

Ruben Vardanyan, main owner and chairman of Troika Dialog, said Wednesday that the bank would "stay independent" and not merge with a state lender, although a source close to management said the company had held talks with Africa's largest bank.

The comments followed a report in Vedomosti saying Troika was in talks to sell a 30 percent stake to South Africa's Standard Bank through a new share issue. Vardanyan, speaking in Davos, Switzerland, declined to comment on the report.

Standard Bank is conducting due diligence of the Russian company and has valued the stake at $150 million to $200 million, an unidentified investment banker told Vedomosti. Troika needs the money to refinance debt.

Gor Nakhapetyan, Troika's managing director, declined to comment. A source close to Troika's top managers confirmed that talks had been held.

"This way of development looks reasonable, and we can't rule out anything," the source close to Troika, who asked not to be named, told Reuters, adding that talks could produce an outcome no earlier than the end of February.

The Vedomosti report did not say whether Troika would be sold entirely. In addition to the investment banking business, Troika pioneered the retail mutual fund market and has a large asset management business.

Standard Bank, Africa's biggest bank by assets, declined to comment on the report but reiterated its interest in Russia, where it already runs a corporate and investment banking business.

"Russia is an important strategic market for us ... and as with all key markets, we continuously assess our position including considering acquisition or growth opportunities," Erik Larsen, a Standard Bank spokesman, said in an e-mailed response.

Standard Bank, 20 percent owned by China's biggest lender, Industrial and Commercial Bank of China, has been expanding in emerging markets such as Argentina and Nigeria.

South African banks have escaped the worst of the global banking crisis thanks in part to exchange controls, and some analysts say that now could be a good time to put cash to work by buying relatively cheap assets abroad.

Russian investment banks have been severely hit by a market collapse as the global economic crisis freezes demand for investment banking products such as IPOs and debt issues, which had been extremely profitable during the economic boom.

Renaissance Capital, Troika's biggest peer, sold a 50 percent stake in itself to Mikhail Prokhorov in September for $500 million.

KIT Finance, which sparked a crisis of confidence among Russian brokers by failing to meet obligations on a share repurchase deal, was effectively bailed out by the state in a takeover by Russian Railways and Alrosa.

At the time, Troika's core owner, Ruben Vardanyan, denied that he was in talks to sell his bank.

(Reuters, Bloomberg)