Russian state lender Vnesheconombank (VEB) has begun to gradually sell off its stake in European Aeronautic, Defence & Space Co (EADS), business daily Vedomosti reported on Friday, citing sources.
Russian state-controlled bank VTB (RTS: VTBR) bought a stake in EADS in the summer of 2006 for 1 billion euros, and at the end of 2007 it sold the stake to VEB for about the same amount. It was initially assumed that the stake would eventually go to United Aircraft Corporation (UAC), tentatively in the second half of 2008, but this never happened. In recent years VEB has repeatedly said it was unwilling to part with the EADS shares until their price exceeds the purchase price, so as not to take a loss.
National daily Kommersant reported in July that selling VEB's stake in EADS was being considered as an option for raising money to provide subsidies to Sukhoi Civil Aircraft Company (SCAC), which was in financial trouble. But the paper's sources said VEB did not yet want to sell the shares.
However, by the end of July VEB had already sold nearly half its stake, disclosure information cited by Vedomosti shows. On July 26, the bank reported in the Netherlands, where EADS is registered, that it had reduced its stake to 2.88 percent from 5.02 percent. The sold stake was worth 763 million euros on July 25. The shares are being sold on the market, the paper reported its sources as saying.
Having reduced its stake below 3 percent, VEB is no longer required to report further changes in the stake. The process of selling the shares may have been completed since then, Vedomosti reported a source at UAC as saying.
A federal government official said there are now two options for assisting SCAC with the proceeds from the sale of the EADS shares: investing the money in the equity of either UAC, in which VEB now holds a 9.1 percent stake, or in OJSC Sukhoi, which owns 75 percent of SCAC.
All rights reserved by Rossiyskaya Gazeta.