SOFAZ gets nearly 3 pct of VTB Bank's stock

By Nazrin Gadimova

The state oil fund of Azerbaijan, SOFAZ, has acquired 2.95 percent of shares in VTB, Russia's second-largest bank. The $500 million deal took place under the secondary offering of the stock.

In addition to SOFAZ, the shareholders of VTB are Norges Bank Investment Management (4.28 percent), Qatar Holding LLC (through Credit Suisse AG), with 2.95 percent, and Onexim Holdings Limited (2.43 percent).

The Azerbaijani oil fund signed an agreement on subscribing for shares of the VTB additional issue on April 26, 2013.

Earlier, the supervisory board of VTB Bank announced its decision to raise additional funds to the capital worth up to 102.5 billion rubles ($3.23 billion) by issuing 2.5 trillion additional shares by public subscription at 0.041 rubles per additional share.

SOFAZ was established in 1999 when its assets amounted to $271 million. As of April 1, 2013, the assets of the State Oil Fund amounted to over $34.3 billion.

Under its policy, the funds may be used for strategically important infrastructure projects, as well as for the solution of important national issues. From 2001 to 2009, special attention was focused on the development of both the oil sector and the infrastructure of the non-oil sector of the country. At present, SOFAZ funds a number of strategic projects in the fields of irrigation and transport.

The main purposes of the fund are the accumulation of funds and placement of the fund's assets abroad to minimize the negative impact on the economy and prevent the 'Dutch disease', to ensure savings for future generations and to maintain the current socio-economic standards of the country.

Projected total cost (the average amount) of the investment portfolio of SOFAZ for 2013 was set at 25.2 billion manats, while at the end of 2012 it was projected at 23 billion manats.

The official exchange rate as of June 6 is 0.7846 AZN (manats) per USD.