Ukraine crisis slows Unicredit's sale of local business

by Reuters
Monday, 12 May 2014 16:33 GMT

MILAN, May 12 (Reuters) - UniCredit's talks to sell its operations in Ukraine have slowed because of the political turmoil there and it was difficult to predict the outcome, the Italian bank's chief executive said.

In March, Unicredit said an unidentified suitor had submitted a non-binding offer for the business held through its central and eastern European arm Bank Austria.

Asked by an analyst to give an update on the sale on Monday, Chief Executive Federico Ghizzoni said the bank was in talks with "a couple of institutions."

"The discussions are still under way. The talks have slowed down because of the situation of the country," Ghizzoni said on a conference call, referring to escalating tensions between Ukraine and Russia.

"We have not formally called off the process but it is difficult to make predictions," he said on the call after the bank released first-quarter results.

Bank Austria said in March the Ukrainian business was valued at 0.7 times equity value. Reclassification of the Ukrainian bank as an asset held for sale and its operating loss in 2013 hit profits by around 250 million euros ($347 million), it said.

UniCredit began sounding out investors on the possibility of selling its Ukraine operations last year, before the crisis reached a critical stage. (Reporting by Gianluca Semeraro; Writing by Silvia Aloisi; Editing by Erica Billingham)

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