Russia's VTB studying potential demand from Gulf investors

VTB, Russia's second biggest lender, said it was studying the potential demand for its shares from investors, including those in the Gulf, as the government plans a massive privatisation drive.

Russia will open its most ambitious privatisation programme since the 1990s to foreign investors as it plans to earn at least $29 billion through asset sales including a 25 per cent stake in state-run VTB.

"VTB ... is working with a wide range of potential investors and studying a demand actively. As a part of our work with investors from the Arabian Gulf we talked about possible options for investments into VTB but no direct agreements have been achieved," VTB's press-service said by email.

Sheikh Ahmad al-Abdullah al-Sabah, Kuwait Minister of Oil and Information, has told Russia Today television channel that VTB has proposed to the oil-rich Gulf country to buy a stake in the bank.

"VTB has made us a commercial offer for the state of Kuwait to become the bank's shareholder," RT quoted the minister as saying in a Russian language press-release on Wednesday.

Kuwait Investment Authority (Kia), a sovereign wealth fund, which manages state assets in the world's fourth-biggest oil exporter, was once a minor shareholder at Citigroup but sold its stake for a profit of $1.1bn in December 2009.

"I will propose to them (KIA's top management) to discuss investment opportunities with the bank's top management in detail and if it occurs that those investment opportunities are in line with the (KIA's) strategy than the corporation will make a decision accordingly," the minister said.

VTB, which plans to earn as much as 50 billion roubles ($1.68bn) in 2010 after a $2bn loss in 2009, has said it is seeking cornerstone investors to whom the government could divest some of its stake in the bank.