Renaissance and the Onexim Group of Mikhail Prokhorov, who made his fortune in metals giant Norilsk Nickel and banking, will buy new equity amounting to 50% of Renaissance for US$500m, with the old shareholders retaining a one-share voting majority.
‘The partnership creates an investment bank with a strong and very liquid balance sheet well placed to aggressively pursue growth opportunities arising from the ongoing turmoil in global financial markets,’ Stephen Jennings, Renaissance Capital chairman and one of Russia’s most established investment bankers, said in a statement.
Renaissance Capital spokesman Quinn Martin said the talks had been underway for months.
Signs emerged last week that market turmoil could spur a round of broker consolidation in Moscow when asset management company Leader, part of Gazprom’s financial empire, said it would buy local broker KIT Finance after the latter failed to meet some obligations on a repurchase agreement.
Brokers slammed shut counterparty lines last week in a confidence crisis that sent the stock market plunging in its worst losses since the Russian currency collapsed in 1998.
A financial source said the deal concerned only Renaissance’s investment banking business, not its private equity, asset management or consumer finance operations.