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. Last Updated: 07/27/2016

RESO Sells a Stake to EBRD As It Prepares for Share Float

The European Bank for Reconstruction and Development has acquired a 10 percent stake in RESO Garantia as the country's third-biggest retail insurer prepares for an initial public offering.

The transaction, valued at $150 million, is the EBRD's largest equity deal in Russia.

RESO Garantia announced plans Tuesday to launch an IPO of its ordinary shares on Moscow's RTS and MICEX exchanges. The company said it would not register or offer shares in Britain or the United States.

RESO plans to float about around 6.2 million ordinary shares, representing 20 percent of all shares currently held by RESO Holding. The IPO was originally planned for this month.

Igor Ivanov, RESO deputy general director for marketing, said Wednesday that the EBRD's investment would have no immediate impact on the IPO plans.

He said that although the company was ready to hold the IPO, no date had been set.

Having the EBRD as a shareholder would help the IPO, analysts said.

"The transaction is mutually beneficial. It gives RESO Garantia a portfolio investor that will help with its IPO while EBRD had the opportunity to buy RESO's stocks at bargain price," said Olga Veselova of Troika Dialog.

RESO Garantia is part of RESO Group, a diversified holding with assets in insurance, medical services, leasing, development and asset management. The group is valued at $1.2 billion, according to Interfax rating agency.

RESO's key shareholders are its founders, brothers Sergei and Nikolai Sarkisov.

With over 3 million retail clients and 5,000 employees, it was the country's third-largest insurance group by gross premiums in 2006.