Russia Ingosstrakh addresses Czech investor fears

...first moving to dilute the Czech firm's stake fourfold.

Ingosstrakh will invite PPF Investment to buy shares in its upcoming secondary offering in order to prevent the dilution of PPF's stake from 38.5 percent to around 10 percent, said Chairman Vyacheslav Shcherbakov.

"All shareholders, in accordance with the law, will be invited to take part in the share offering," Shcherbakov told Reuters late on Monday.

At an extraordinary shareholders meeting on Oct. 8, when Shcherbakov was elected chairman, Ingosstrakh decided to quadruple its authorised capital from 2.5 billion roubles to 10 billion roubles ($403.2 million).

In order to maintain their stakes, all shareholders will therefore need to quadruple their investments in the company.

Russian media reported the decision had been pushed through by another Ingosstrakh shareholder, metals billionaire Oleg Deripaska, who controls 60 percent of Ingosstrakh -- 10 percent directly and another 50 percent through his business holding, Basic Element.

PPF Investment stated earlier this month that the meeting was untransparent and that it was not given the option of buying into the increased capital of Ingosstrakh in order to maintain its stake.

PPF was not immediately available to comment Tuesday, but Russian media have reported that it is planning legal action over the incident.

Shcherbakov brushed off the accusations: "The (shareholders) meeting happened without breaking the law, and all shareholders were given the chance to participate," he said.

Basic Element spokesman Sergei Rybak noted on Tuesday that PPF had only last week admitted to owning a stake in Ingosstrakh, well after the shareholders' meeting was held.

Now that it has acknowledged its investment in the company, Rybak said PPF will have a chance to increase its investment in the company just like all the other shareholders.

PPF Investments, a private investment arm of Czech financier Petr Kellner, owns its stake in Ingosstrakh through its PPF Beta vehicle. (Additional reporting by Dmitry Zhdannikov in Moscow)

[LONDON/Reuters/Finance.cz]