About 5% of VTB shareholders to have fractional shares after reverse stock split - first deputy CEO

MOSCOW. June 11 (Interfax) - The number of minority shareholders of VTB who will be left with fractional shares as a result of the state bank's reverse stock split will amount to about 5% of total shareholders, VTB first deputy CEO Dmitry Pyanov told Interfax.

VTB shareholders voted at their annual meeting on June to increase the par value of shares from 1 kopeck to 50 rubles.

VTB has historically had shares with a low par value of just 1 kopeck and its charter capital consists of almost 27 trillion shares. The issue of increasing the par value was raised at the annual general meeting in 2019, when VTB head Andrei Kostin acknowledged that the low par value was not very convenient and said it might be increased. However, sanctions, the bank's listing on the London Stock Exchange and a new share issue interfered with a reverse split in the past.

After the consolidation of its shares, VTB will have 5.37 billion common shares with par value of 50 rubles each. The date of conversion will be the eighth working day after the date of the state registration of changes in the decision on the issue of the securities.

VTB is now discussing the repurchase of fractional shares from minority shareholders. Pyanov said the number of shareholders who will have such shares is negligible, at about 5% of the total number of VTB shareholders.

"Fractional shares have the same set of rights and give their holders the same possibilities as whole ones. Their only difference is they are sold exclusively on the over-the-counter market. However, the price is so negligible that sale price of fractional shares could turn out to be lower than the commission for making the transaction. Therefore, we are now working out a comfortable solution for those shareholders who, for some reason, want to sell the fractional part of their stake," Pyanov said.

Pyanov said earlier that the repurchased fractional shares will be consolidated and sold back to the market "in a non-distorting amount," with sales timed so as to not affect the share price.