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. Last Updated: 07/27/2016

VTB Ready to Lend to Potanin

VedomostiAndrei Kostin
YEREVAN, Armenia -- VTB may partly finance the purchase of a 25 percent stake in Norilsk Nickel by tycoon Vladimir Potanin for $15.7 billion, VTB's chief executive said Saturday.

"We do not have $15 billion, but we can give them a loan," Andrei Kostin told reporters.

He refused to disclose the amount that the state-controlled VTB was ready to lend Potanin.

A source close to the deal later confirmed that the loan agreement was in the works.

Mikhail Prokhorov, Potanin's former business partner, has agreed to sell Potanin his 25 percent plus one share in Norilsk, the world's largest nickel and palladium miner, for $15.7 billion as the two billionaires split their assets.

But Prokhorov has given his former partner only 45 days to close the deal. Otherwise, he has agreed to sell the stake to RusAl, which is majority owned by billionaire Oleg Deripaska.

The Times newspaper reported last month, quoting sources, that Potanin was trying to raise the cash from London investment banks, hedge funds and mining companies but said he had struggled to generate interest in a weak credit environment.

An offer of support from a state-controlled bank may give Potanin an edge over Deripaska, although it is not yet clear where Potanin might raise the rest of the money. Potanin's Interros group was not available for comment over the weekend.

Kostin also said Saturday that VTB planned to sell its 5 percent stake in Airbus parent company EADS with the aim that the shares eventually be acquired by the state aircraft corporation.

He said the deal might be completed by the end of the year but did not specify the price.

VTB, the country's second-largest bank, aims to sell the stake to Vneshekonombank, the country's bank for foreign trade, but "in the final step it may be transferred to the United Aircraft Corporation." The corporation is a state umbrella for the country's aircraft makers.

VTB surprised the industry last year with the announcement that it had acquired 5 percent of the European Aeronautic Defense and Space Co.

The government -- which is rebuilding its domestic aviation industry under the direction of United Aircraft Corporation -- had hoped to raise its stake and secure a place on the board of EADS, which owns 10 percent of plane maker Irkut.

EADS has said, however, that the Moscow bank would not be welcomed as a decision-making industrial shareholder.

Reuters, AP