UPDATE 1-Russia’s VTB does not plan to sell its stake in En+ soon -VTB exec

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(Adds details, quotes, background)

SOCHI, Russia, Feb 14 (Reuters) – Russia’s VTB, which increased its stake in En+ Group to 22 percent in January, as part of a move to help En+ avert U.S. sanctions, does not plan to sell its stake in the near future, First Deputy Chief Executive Yuri Soloviev said.

Aluminium and power producer En+ and aluminium giant Rusal , in which En+ owns a stake, were removed from Washington’s blacklist in January after tycoon Oleg Deripaska agreed to reduce his stake in En+ to 45 percent from 70 percent.

En+ Board Chairman Greg Barker said this month that VTB may sell its stake in the future, with banking sources telling Reuters that the sale was expected to be gradual.

Soloviev said that En+, despite being exempt from the sanctions, remains undervalued by the market, so VTB does not plan to sell its stake before the company’s fundamental value recovers.

One of the banking sources told Reuters this month that VTB would use proceeds from the sale to reduce En+’s debt to VTB, the same as En+’s dividend payments would be used to reduce En+’s debt to the bank, too.

Soloviev confirmed that dividends which VTB is getting from its stake in En+ will be used to reduce En+’s debt to VTB.

“If dividends are received… the debt would be reduced automatically,” Soloviev said. En+ declined comments. (Reporting by Polina Nikolskaya and Polina Devitt Writing by Katya Golubkova; Editing by Susan Fenton and Alexandra Hudson)

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