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. Last Updated: 07/27/2016

VTB Prices Shares Near the Top Value

VTB's supervisory board late Thursday approved the final pricing of its initial public offering at 13.6 kopeks per share, a 2.16 percent discount on the upper price range, Interfax reported.

The decision, made during a meeting with underwriters, cleared the way for shares to start trading Friday in Moscow and London.

VTB earlier set the indicative price range for its IPO at 11.3 kopeks to 13.9 kopeks per share and $8.77 to $10.79 per Global Depositary Receipt.

The state-owned bank hopes to raise $6.84 billion to $8.42 billion with the placement of 1.56 trillion new shares.

Market sources said Thursday that the IPO was heavily oversubscribed, indicating that the bank's board would approve the upper price range for its share flotation.

The country's second-largest bank closed its book for foreign investors at noon Wednesday with shares fivefold oversubscribed, sources close to the bank said, Vedomosti reported.

Retail investors made 119,000 offers worth more than $1.5 billion before VTB closed its book to them Tuesday.

Anton Rakhmanov, who manages the Unifund brokerage, cautioned that an over-evaluation by subscribers could paint a false picture about VTB's capitalization. "Most of the subscription figures out there could be attributed to speculators and hedge funds trying to raise the stakes by bidding for more than they have funds for," he said.

The indicative price range implies that VTB has a market capitalization of $22.85 billion to $28.1 billion before the IPO. The offering will dilute the government's stake in VTB to 75 percent.

VTB, the former Soviet foreign trade bank, has said it wants to invest in expanding its retail operations and investment banking acquisitions.