November 19, 2012 / 1:00 PM / in 5 years

UPDATE 1-Russia's Onexim to consider RenCap non-core assets sale

(Adds further details from interview)

* Onexim to dispose of RenCap non-core assets -CEO

* Will hold on to minority stake in RUSAL

By Polina Devitt

MOSCOW, Nov 19 (Reuters) - Russian tycoon Mikhail Prokhorov’s Onexim Group may sell Renaissance Capital’s non-core assets as part of its plan to return the emerging markets investment bank to profit, the group’s chief executive said.

Onexim’s CEO Dmitry Razumov told Reuters the group will not consider selling the loss-making bank it last week agreed to buy from founder Steven Jennings, until it is consistently making money.

RenCap is the last of the Moscow-based investment banks to lose its independence after its birth during Russia’s turbulent market reforms of the 1990s.

“We... are ready to share our resources for the company’s business development. Our current aim is to make Renaissance Capital profitable again,” Razumov said in emailed answers to questions from Reuters.

Renaissance Capital had lost ground to the aggressive investment banking units of state-controlled Sberbank and VTB, which have been able to deploy their balance sheets and sovereign backing to win business.

Onexim’s owner Prokhorov, who ran on a liberal platform and lost to Vladimir Putin in this year’s Russian presidential election, has a fortune estimated by Forbes magazine at $13 billion, including a stake in aluminium giant RUSAL, gold miner Polyus Gold and the U.S. Brooklyn Nets basketball team.

Onexim has no plans to sell its 17 percent stake in RUSAL despite disagreements with CEO and main owner Oleg Deripaska, who refuses to sell its one-quarter stake in nickel miner Norilsk Nickel to cut its $10.7 billion debt burden.

“We do not plan to sell our stake in RUSAL,” said Razumov, who stood down last week from the board of RUSAL and was replaced by his deputy Christophe Charlier.

“As an investor, we are interested in receiving investment income, but it would be hard to do so with the current value of this asset. We don’t rule out anything in the future.”


Onexim’s deal to acquire the half of RenCap it did not already own came less than a week after Moody’s downgraded the credit rating of holding company Renaissance Financial Holdings Ltd. Sources said the ratings cut triggered a liquidity crunch at Renaissance Capital.

“Renaissance Capital will now be able to develop more effectively, because none of its resources will be tied up with other assets,” said Razumov, adding that RenCap had already cut operating costs by 48 percent this year.

Deputy CEO John Hyman will step up to become CEO of RenCap, replacing New Zealander Jennings, whose Renaissance Group will retain its asset management operations, real estate development interests and African operations.

“We aim to ensure continuity of the team,” Razumov said.

Razumov said RenCap may sell its non-core Ukrainian Agrarian Investments and Russia Forest Products, and will further seek to optimise its costs.

“Assets like Renaissance Capital and Renaissance Credit are able to generate significant investment income for us, as long as they are developed correctly,” Razumov said. (Reporting by Polina Devitt; Additional reporting by Katya Golubkova; Editing by Douglas Busvine and Mike Nesbit)

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