France-headquartered Societe Generale is offloading its insurance subsidiaries in Russia as part of an “effective and orderly” exit from the country.
Subject to regulatory and anti-trust approval, the investment bank’s Russian insurance subsidiaries, as well as Societe Generale’s entire shareholding in Rosbank, will be sold to Interros Capital for an undisclosed sum.
“With this [sale and purchase] agreement, concluded after several weeks of intensive work, the group would exit in an effective and orderly manner from Russia, ensuring continuity for its employees and clients,” said Societe Generale, which added that the divested activities’ net book value stands at around €2 billion.
The buyer, which was founded by Vladimir Potanin in 1990, is among the biggest private investment companies in Russia. It was a previous shareholder of Rosbank.
Meanwhile Societe Generale noted: “The impact of the disposal of Rosbank and the group’s Russian insurance activities on the group’s CET1 (Common Equity Tier 1) ratio is expected to be around 20 basis points based on the net value of the disposed assets as of December 31, 2021.
“It would mainly result from the impact of the write-off of the net book value of the disposed assets, largely offset by, on the one hand, the deconsolidation of the local exposure to Russia (approximately €15.4 billion of exposure at default as of December 31, 2021) and on the other, a payment in favour of Societe Generale including notably the repayment by the purchaser of the subordinated debt granted by Societe Generale to its subsidiary.”
According to Interros, the terms of the transaction were agreed with Russia’s Government Commission on Monitoring Foreign Investment.
