May 15, 2019 / 3:17 PM / in 5 days

VTB in talks to buy stake in Russian rail freight firm-sources

MOSCOW, May 15 (Reuters) - Russia’s second-largest bank VTB is in talks to buy a stake in Rustranscom (RTC), the country’s biggest transporter of grain by rail, four industry sources told Reuters.

Two sources said the state lender was negotiating to buy a controlling stake in RTC, but did not say how much the company was being valued at in the deal.

Two other sources said the bank was in talks for a stake in RTC, without specifying whether it was seeking a minority or majority stake.

A deal would further boost VTB’s presence in the country’s grains sector, where it already owns two grains terminals and is eyeing a stake in a third according to a news report.

Russia is the world’s largest wheat exporter, and VTB has said it was working with the government to develop the country’s potential for grain exports.

VTB and RTC did not reply to requests for comment.

Rustranscom had been planning to list its shares on the London Stock Exchange but postponed the IPO last month in favour of a private equity transaction. It did not disclose the identity of the potential investor at the time.

VTB Capital, VTB’s investment branch, was among the joint global co-ordinators and joint bookrunners for the planned IPO and had valued the company at $1.363-1.605 billion, a VTB report seen by Reuters showed.

RTC, owned by co-founders Konstantin Sintsov and Konstantin Zasov, operates 68,000 rail cars and is the market leader in rail transportation of grain in Russia and Kazakhstan, as well as for timber and mineral fertilisers in Russia.

VTB already owns two large marine grain terminals in the southern Russian city of Novorossiisk. It also has been in talks to buy a 50% stake in the Taman grain terminal from Ukrainian agricultural firm Kernel, a Russian daily has said.

Reporting by Gleb Stolyarov, Olga Popova and Tatiana Voronova, additional reporting by Gabrielle Tétrault-Farber Editing by Deepa Babington

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