MOSCOW (Reuters) - Russia’s En+ Group (ENPLq.L) said on Thursday it will buy back 21.4% of its shares from state bank VTB (VTBR.MM) for $1.6 billion, as it seeks to simplify its ownership structure to focus on development after the United States lifted sanctions.
Russian tycoon Oleg Deripaska, seen as a close ally to President Vladimir Putin, had agreed to cede its control over En+, an aluminum and hydropower group, following a deal with Washington, which had targeted the company with sanctions.
The arrangements to avoid the sanctions were lobbied by En+ Chairman Gregory Barker, a former UK energy minister. The company said on Thursday that the acquisition of its shares from VTB would not be at odds with the “Barker Plan”.
“The shares acquired secure future optionality to pursue our strategy to create a global, integrated low-carbon aluminum producer and the opportunity over the longer term to expand our institutional shareholder base,” Barker said in a statement.
En+ said it may use the shares for strategic activity or it may undertake a secondary offering of all or part of the shares some time later.
The shares will be bought at $11.57 each “which represents a significant discount to En+ fundamental valuation”, the company said.
It added that it had no intention to cancel the shares, in order to preserve the ownership structure under the “Barker Plan”, and that there will be no immediate impact on En+’s free float and no dilution of minority investors’ ownership.
En+ plans to raise up to 110.6 billion roubles ($1.8 billion) from Sberbank (SBER.MM) for the deal, which is expected to be closed on or around Feb. 12, it said. En+ also reaffirmed its intention to resume dividend payments this year.
Reporting by Katya Golubkova and Vladimir Soldatkin; editing by Jason Neely