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O1 Group in talks to divest Budushchee pension funds

O1 Group, controlled by Russian businessman Boris Mints, plans to transfer control of financial group Budushchee to Cyprus-based Riverstretch Trading & Investments.

Nonstate pension fund NPF Budushchee, which is one of four pension funds controlled by Budushchee Group, said takeover negotiations are ongoing. The planned transaction would constitute part of the settlement of O1 Group's debt on a loan received from PAO Credit Bank of Moscow.

Riverstretch was chosen as the new owner due to its experience with handling distressed assets, NPF Budushchee said, noting that the quality of its assets deteriorated significantly after its investments in Otkritie Financial Corp. Bank and PAO Promsvyazbank were negatively affected by the 2017 bailouts of the lenders. Riverstretch and Budushchee Group are also working on a detailed strategy to improve the quality of assets held by the fund and increase profitability, NPF Budushchee noted.

Riverstretch Trading & Investments is affiliated with Russian investment company Region, which in turn is a minority shareholder at Credit Bank of Moscow, Kommersant reported Aug. 30. The Cypriot company will most likely act as a temporary owner of Budushchee pension funds, and they could be merged with pension funds Neftegarant NPF, Neftegarant NPO and Soglasie OPS, linked to Region and Credit Bank of Moscow's majority shareholder Rossium, the newspaper noted.

Meanwhile, Vedomosti said in the same-day report that the Moscow District Arbitration Court froze Rosgosstrakh Insurance Co. (PJSC) shares owned by NPF Budushchee. The asset freeze was requested by Promsvyazbank, which is trying to challenge a number of transactions with Budushchee that took place before its December 20017 bailout. The value of the shares under the asset freeze amounts to around 7 billion rubles, the newspaper noted.

As of Sept. 3, US$1 was equivalent to 68.08 Russian rubles.