MILAN (Reuters) - UniCredit (CRDI.MI) said on Monday it will book a 200 million euro ($218 million) charge after clinching a deal to sell its Ukraine business to ABH Holdings (ABHH) in exchange for a minority stake in the Luxembourg-based investment group.
Italian bank UniCredit, a market leader in central and eastern Europe (CEE), has long flagged the sale of JSC Ukrsotsbank but the process had been held up by the crisis in Ukraine.
In August, Italy’s biggest bank by assets started three months of exclusive talks with ABHH, which is part of the empire of Russia’s Alfa Group.
“The signing of the agreement is currently expected to lead to an extraordinary charge in ... 4Q15 P&L of about 200 million euros,” the bank said in a statement.
The deal, which is expected to be completed this year, will have a neutral impact on the bank’s CET 1 capital ratios, UniCredit said, noting that a negative currency impact of 652 million euros had already been booked.
As part of the agreement, UniCredit will receive new shares issued by ABHH, giving it 9.9 percent of the investment company.
In a separate statement, ABHH chairman Petr Aven said the deal allowed the investment company to create a leading retail and wholesale banking player in Ukraine.
“We look forward to utilizing (UniCredit’s) vast European experience to support ABHH’s international growth,” Aven said.
Under the deal UniCredit will be able to appoint one board member at the Alfa Group unit and will have the right to trigger an IPO of ABHH or sell its stake to ABHH after five years.
ABHH shareholders include Russian billionaire Mikhail Fridman and his business partner German Khan, among others.
Ukraine was UniCredit’s only loss making country in the CEE region in 2014 and UniCredit CEO Federico Ghizzoni had committed to selling it as part of a series of disposals.
UniCredit was advised by Rothschild and UniCredit Corporate and Investment Banking.
($1 = 0.9191 euros)
Reporting by Stephen Jewkes; editing by Francesca Landini and David Clarke