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Wed 17 Aug 2011 09:21 AM

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Russia's top lender courts wealth funds for $5bn sale

Sberbank hopes to line up sovereign Arab funds as core investors in stake sale

Russia's top lender courts wealth funds for $5bn sale
Sberbank chief executive German Gref is understood to be meeting with Arab funds ahead of the stake sale

Russia's top lender Sberbank hopes to line up Asian and Arab
wealth funds next week as core investors in its 7.6 percent stake sale, two
banking sources said Tuesday.

A team set to meet the funds will be headed by chief
executive German Gref, with Alexei Ulyukayev, a first deputy chairman at
Russia's central bank and a member of Sberbank's supervisory board, joining the
trip.

"Gref plans to meet sovereign wealth funds from the
Middle East and Asia who are interested in acting as core investors," one
source said, adding Sberbank also plans meetings in Beijing and Singapore.

Gref said in July he planned to meet Chinese investors this
or next month, after media reports that the country's $300bn sovereign wealth
fund China Investment Corp may join in the stake sale.

The source confirmed Gref's plans to meet Chinese investors,
saying funds from Abu Dhabi might also be interested.

Sources told Reuters in June that Sberbank planned to sell
the stake by mid-September, before global market turmoil wiped around $1bn off
its value. The stake is now worth $5.2bn.

Officials indicated they would not sell the 7.6 percent
stake cheaply, raising concerns that the privatisation may be postponed after
Sberbank's share price dropped more than 15 percent since the beginning of
August.

Ulyukayev told Interfax news agency late on Monday that the
central bank, which owns a majority in Sberbank, had not changed its plans to
sell the stake.

"There is no intention to change the sale plans, we are
still looking at the middle of September. But if the markets are too fragile,
the timing might be adjusted a little. The plan is to sell this year," one
of the sources said.

Sberbank declined to comment. The central bank was not available
for comment.

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