South Africa-based Standard Bank Group has entered into a strategic partnership with Troika Dialog Group, an investment bank in Russia, in terms of which the bank intends, subject to regulatory approvals, becoming a 33% shareholder in the group.
The deal will initially comprise a $200 million convertible loan extended by Standard Bank’s international operations to the Troika Dialog Group. Subject to the required regulatory approval process, this loan, together with the acquisition by Troika Dialog of Standard Bank’s existing operation in Russia, ZAO Standard Bank, is convertible into a 33% equity stake in the merged entity.
According to Standard Bank, the combined operation will have a capital base in excess of $850m and will be strongly positioned to compete in the Russian financial services sector and to pursue banking consolidation opportunities in Russia.
The transaction is subject to the approval of the Central Bank of the Russian Federation and the Russian antitrust authorities and the South African Registrar of Banks.
In order to give effect to the strategic partnership, Standard Bank and Troika Dialog plan to enter a relationship agreement which will govern the ongoing shareholder relationship and commercial cooperation between the two groups. Standard Bank would also have the right to nominate two nonexecutive members of the Troika Dialog board of directors which will total six.
