Italy’s UniCredit has signed a binding agreement to sell its Ukrainian subsidiary Ukrsotsbank to ABH Holdings – part of Russian billionaire Mikhail Fridman’s Alfa Group – in exchange for a 9.9% share of the company.
Agreements foresee specific protection rights for both parties, including the possibility of UniCredit being able to appoint one board member of ABH, and eventually, an IPO of that business.
Furthermore, the parties agreed a put/call option mechanism on UCG’s stake in ABH, after the fifth anniversary of the deal’s closing.
The sale of the Ukrainian subsidiary is expected to result in a €200m one-off charge for UniCredit, to be paid in the fourth quarter of 2015, according to a statement outlining the details of the sale.
UniCredit’s sale of its Ukrsotsbank subsidiary is subject to regulatory approvals, which are expected this year.
Rothschild and UniCredit Corporate & Investment Banking are acting as advisers on the deal.
The sale of the unprofitable Ukrainian unit was part of a business development plan announced by UniCredit towards the end of 2015, where 18,200 job cuts were announced.
Milan-based UniCredit is Italy’s largest bank, but it has been struggling recently, and even last November’s announcement of plans to cut staff and dispose of unprofitable operations was not enough to keep its share price from falling 20%, the Financial Times noted on Monday.