Exclusive: Russia's VTB Capital closes in on Roberto Cavalli- sources
By Pamela Barbaglia and Alexander Winning
LONDON/MOSCOW (Reuters) - VTB Capital, the investment arm of sanctioned Russian lender VTB Bank (VTBR.MM: Quote), has made a cash payment to secure a deal to buy most of Italian fashion house Roberto Cavalli before the end of November, two sources familiar with the situation said.
VTB Capital will buy a 70 percent stake in the Florentine company known for its colorful animal prints, which is valued at 400 million euros ($506.16 million), one of the sources said, adding that the cash payment was for up to 20 million euros.
The sources said VTB Capital, run by Italian banker Riccardo Orcel, brother of UBS's UBSN.VX head of investment banking Andrea Orcel, was raising funds from a consortium of international investors to seal the deal quickly, before any further sanctions over Russia's role in Ukraine.
They said the cash payment strengthened the chances of the deal's success because VTB Capital would lose its money if it pulled out.
But the transaction could still fail in the event of another round of international sanctions over Ukraine, or if trading with Moscow worsens, one of the sources said.
Another source, who could not be named because the talks are private, said the deal was already legally binding.
Representatives at VTB and Cavalli declined to comment.