Court persists in hindering the sale of Raiffeisen's Russian affiliate.
Vringe Mit Nachrichten - RBI's Russian Subsidiary Left Struggling After Court Ruling
Raiffeisen Bank International's (RBI) Russian arm, AO Raiffeisenbank, has experienced another setback in a Russian court. The court denied a plea to lift the sales ban, announced by RBI on Wednesday. The ban is a part of a disagreement with Russian investment firm Rasperia.
This prohibition was imposed during a legal spat stemming from Rasperia's actions against Austrian construction conglomerate Strabag. Rasperia, historically affiliated with sanctioned oligarch Oleg Deripaska, sought compensation from Strabag and its Austrian core investors, including Raiffeisen Landesbank Niederösterreich-Wien, the primary shareholder of RBI. However, this entity has no assets in Russia. Instead, the Russian RBI subsidiary, boasting a capital of approximately five billion euros, found itself embroiled in the contentious legal proceedings.
Previously, RBI attempted to acquire the frozen Strabag shares through a complex transaction involving Rasperia in order to withdraw capital from Russia. However, the deal was axed due to suspicions of international sanction violations.
With the sales ban still in place, RBI will challenge the court's ruling. A lawsuit is expected to be filed at the Vienna Commercial Court by June. The aim is to recover the frozen Strabag shares, including dividends, and secure them as compensation.
On the other hand, Rasperia is rumored to have filed a new lawsuit aimed at impeding proceedings from taking place outside of Russia. According to Rasperia's lawyer, Igor Ozerskiy of the K&P Group law firm, this action targets a planned arbitration procedure in the Netherlands. Moreover, Rasperia is demanding a fine of one billion euros if companies violate the imposed ban.
In the broader context, RBI's Russian subsidiary continues to generate profits surpassing one billion euros per year[2][4]. Its equity amounts to around four billion euros. The frozen Strabag shares remain locked due to sanctions linked to Deripaska[2], and RBI's efforts to sell its Russian subsidiary shares have been thwarted by the court ban, further complicating liquidity and risk management.
Enrichment Data:
- Latest Court Ruling on RBI’s Russian Subsidiary Sale Ban:
- The court rejected RBI's attempt to overturn the ban on selling its Russian subsidiary AO Raiffeisenbank. The ruling keeps the sales ban in effect until June 2025[1][3].
- The Dispute and Its Background:
- RBI's Russian subsidiary, with five billion euros in equity, generates more than one billion euros in profits annually[2][4].
- Oleg Deripaska, whose assets were sanctioned, owned 24.1% of Strabag via Rasperia. RBI has billions of euros in cash trapped in Russia due to the subsidiary's profits.
- RBI and Deripaska jointly developed a financial maneuver involving exchanging some of their trapped Russian cash for the frozen Strabag shares held by Rasperia[2].
- The plan was intended to bypass complex sanctions-related asset freezes, but American authorities eventually blocked the proposal, forcing RBI to abandon it[2].
- Impact on Frozen Strabag Shares:
- The frozen Strabag shares remain locked due to sanctions connected to Deripaska and have not been unfrozen or sold.
- RBI's inability to sell its Russian subsidiary shares under the court ban prolongs the immobilization of these assets, intensifying the difficulties in managing liquidity and dealing with financial risks[2].
- Broader Context:
- The Russian government has retaliated to Western sanctions by imposing its own asset freezes, causing hindrances for foreign entities, such as RBI, in withdrawing profits or selling the Russian subsidiary[4].
- RBI's credit ratings maintain stability, although the ongoing legal and market challenges may delay a full exit from Russia[3].
- The court ruling in Russia has prevented Raiffeisen Bank International (RBI) from selling its Russian subsidiary, AO Raiffeisenbank, as the lawsuit filed by Rasperia is hindering the process until June 2025.
- The dispute between RBI and Rasperia, historically affiliated with sanctioned oligarch Oleg Deripaska, has intertwined the Russian subsidiary's business operations with general news and politics, as the ongoing legal battle involves profits surpassing one billion euros annually and a demand for one billion euros in fines if companies violate the imposed ban.
- The financial industry and business world are closely watching this unfolding situation in Russia, as the ban on selling RBI's subsidiary affects the management of liquidity and risks for the conglomerate, while the wider implications for other foreign entities investing or operating in Russia are also under scrutiny.
