Bank “Trust” put up for sale the group “Baltic Leasing”

Bank “Trust” put up for auction the group “Baltic Leasing”. The group is one of the ten largest in the industry in terms of new business and portfolio size, it is one of the largest players in the technological equipment segment. However, the price at which the bank is ready to sell the leasing business may be too high for most interested parties.

Bank of non-core assets “Trust” put up for sale 99.48% of the shares of JSC “Baltic Leasing”. The lot was put up for an open auction on the Fabrikant electronic trading platform at an initial price of 20.4 billion rubles. Applications are accepted until August 10.

Experts are optimistic about the group. “Baltic Leasing has a diversified portfolio with an emphasis on liquid assets with a low concentration on lessees,” said Zoya Sovetkina, director of bank ratings at the Expert RA agency. From a business standpoint, the business model is attractive to potential investors, she said. In addition, the company owns “deficient and greatly appreciated property.”

However, the interlocutor of Kommersant in the financial market clarifies, “the problem of Baltic Leasing is that they were funded from the banking group and it will be difficult for them to immediately start attracting financing on the market themselves.” According to IFRS reporting, as of January 1, 2023, bank loans amounted to 58.7 billion rubles, or almost 63% of the amount of funds raised. In particular, in October 2021, FC Otkritie Bank provided Baltic Leasing LLC with a credit line for 15 billion rubles.

Nevertheless, as Kommersant found out, both state and private participants in the leasing market have already shown interest in the group.

Two interlocutors of Kommersant in the financial market claim that Sberbank is interested in buying Baltic Leasing. According to one of Kommersant’s interlocutors, other large financial structures are also interested in the purchase – Sovcombank, Rosbank, the Insight investment group, the Sinara group. In recent years, there has been a trend towards the development of the leasing business by banking groups to cover all the needs of their client base, Zoya Sovetkina notes.

So far, none of the named companies and banks has officially confirmed their interest in participating in the auction. The Insight group is still interested in making M&A transactions in the leasing market, however, it does not plan to take part in this tender, the company noted. Earlier, the group’s CEO Avet Mirakyan noted that there were no factors in the deal with Baltic Leasing that determine a significant discount to the asset’s valuation: the company’s desire to leave the Russian market and the need for regulatory approval of the deal (see below). “Kommersant” dated March 24).

Sovcombank declined to comment on issues related to corporate clients. VTB also did not comment. The rest of the banks and leasing companies interviewed by Kommersant did not respond to inquiries.

One of Kommersant’s sources in the leasing market noted that “the business is good, but the price is too high.”

He believes that “Baltic Leasing” is worth about 15 billion rubles. At a higher price, the deal is only interesting in installments and “with the possibility of payment after the company starts earning within the new business model.” However, this option does not suit Trust, the interlocutor of Kommersant notes.

One of the investment bankers noted that the initial price “is close to the upper limit of the market (more than five net profits for the last year), and it is unlikely that the final price will be much higher than the initial one.” At the same time, the deal will not require coordination with the Bank of Russia, so applicants can go for it with leverage, the interlocutor of Kommersant clarifies. In his opinion, there may be many applicants, but in this case it is rather a matter of not a very large number of creditors who can provide such leverage.

Polina Trifonova, Olga Sherunkova