29th Dec 2008 07:15
X5 RETAIL GROUP N.V. TO ACQUIRE PYATEROCHKA FRANCHISEE IN ROSTOV
AND
CONSIDERS OTHER FRANCHISEE BUY-OUT OPPORTUNITIES
Amsterdam, 29 December 2008 - X5 Retail Group N.V., Russia's largest retailer in terms of sales (LSE ticker: "FIVE"), today announced that it has signed an agreement to acquire 100% of the business and assets of OOO Agrotorg-Rostov - a Pyaterochka franchisee in the Rostov region - for a total consideration of RUB 400 mln (approximately USD 15 mln), including refinancing of debt owed to B.I.N.BANK and trade accounts payable to suppliers and employees. In order to refinance the debt of OOO Agrotorg-Rostov X5 and B.I.N.BANK have signed a credit agreement in the amount of RUB 282 mln to be repaid in 1.5 years.
As a result of the transaction, X5's will strengthen its geographic presence in the south of Russia, with a better balanced multi-format store portfolio. X5 Retail Group plans to operate 15 of the Pyaterochka soft discount stores acquired in the transaction (about 7 thousand. sq. m. of net selling space), 10 of them owned properties, and will consider potential sale of some real estate assets at a future date. Currently in addition to leased premises OOO Agrotorg-Rostov owns retail premises and an office building in Rostov and the region with the total area of 14 thousand. sq. m.
Lev Khasis, X5 Retail Group CEO, commented:
"We have always considered franchisee buy-outs as part of X5's expansion strategy. In current market conditions, we have increased our focus on these potential opportunities as a consequence of the liquidity situation many players are facing. The buy-out of OOO Agrotorg-Rostov is the first transaction in an inevitable process of Russian retail consolidation, and we are considering other potential buy-outs of franchisee businesses or assets. X5 is acting as a source of strength in Russian retail, ensuring that stores continue to operate and stabilizing payments to suppliers to maintain the flow of deliveries to the consumer."
Mikhail Shishkhanov, the President of B.I.N.BANK pointed out:
"In a difficult economic environment, B.I.N.BANK commits to work with clients that have been affected by volatile financial market conditions. We are pleased with this agreement with X5 that will provide for the refinancing of OOO Agrotorg-Rostov's debt and thus will enable its continuous trading activity."
***
The Rostov region with the total area of some 100.8 thousand square kilometers is situated in the South of the Russian Federation. The total population of the region is about 4.4 million people. The region has a favorable economic and geographical position characterized by abundance of natural resources, well-developed industry and transportation infrastructure. Engineering, metallurgy, power generation, chemical, fuel are the leading industries of the region. Productivity of soil contributes to the essential role of agriculture in the output of the region. In the first 9 months of 2008 the Rostov region demonstrated the growth of industrial production of 11.8% (9M 2008 to 9M 2007), real income growth amounted to 10.3% (9M 2008 to 9M 2007)*. Moreover, the 22nd Winter Olympic Games to be hosted in Sochi in 2014, will contribute to even faster development of the economy of the region in the future.
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*Source: the Federal State Statistics Service of the Russian Federation
Note to Editors:
X5 Retail Group
X5 Retail Group N.V. is Russia's largest retailer in terms of sales. The Company was created as a result of a merger between Pyaterochka (soft discounter chain) and Perekrestok (supermarket chain) on 18 May 2006.
As at 30 September 2008, X5 had 1,027 Company-managed stores located in Moscow, St. Petersburg and other regions of European Russia, Urals and Ukraine, including 794 soft discount stores, 191 supermarkets and 42 hypermarkets.
As of 30 September 2008, X5's franchisees operated 684 stores across Russia.
X5's net sales for the full year 2007 reached USD 5,320 mln, an increase of 53% year-on-year. Gross profit for the period totaled USD 1,404 mln, EBITDA amounted to USD 479 mln. Full year 2007 net income reached USD 144 mln.
Including Karusel on pro-forma basis the Company's net sales for the first nine months of 2008 totaled USD 6,516 mln, gross profit amounted to USD 1,674 mln, EBITDA - to USD 578 mln and net income - to USD 138 mln.
B.I.N.BANK
B.I.N.BANK is a commercial bank, which has been successfully providing banking services starting from November 1, 1993 (Central Bank of Russia General Banking License No. 2562).
The bank developed successfully for the past 15 years. B.I.N.BANK has expanded its retail network, widening the range of corporate and retail banking services, and implemented advanced banking technologies to drive management efficiency.
B.I.N.BANK has about 130 branches, subbranches and representative offices in the major regions of the Russian Federation, including 20 subbranches in Moscow. B.I.N.BANK offers approximately 120 banking products and services. The bank is a Principal Member of VISA and MasterCard payment systems. In December, 2004, the Bank was admitted into the Russian Central Bank Deposit Insurance Program, which provides insurance for customer deposits with state and private Russian banks in case of insolvency.
As at December 1, B.I.N.BANK's equity was RUB 10.2 bln, and net assets amounted to RUB 63.5 bln. The bank's financial position is supported by a high level of liquidity, exceeding the liquidity requirements of the Central Bank of Russia.
For further details please contact
Anna Kareva
IR&PR Director
Tel.: +7 (495) 980-2729, ext. 41 323
e-mail: [email protected]
Svetlana Vitkovskaya
Head of PR Department
Tel.: +7 (495) 662-8888, ext. 31 140
e-mail: [email protected]
Yekaterina Mamaeva
PR Director
B.I.N.BANK
Tel: +7 (495) 755-50-60, ext. 2472
e-mail: [email protected]
Elina Arutunova
Head of Media Relations Department
B.I.N.BANK
Tel: +7 (495) 755-50-60, ext. 2604
e-mail: [email protected]
Forward looking statements:
This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as" anticipate", "target", "expect", "estimate", "intend", "expected", "plan", "goal" believe", or other words of similar meaning.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond X5 Retail Group N.V.'s control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements.
Any forward-looking statements made by or on behalf of X5 Retail Group N.V. speak only as at the date of this announcement. Save as required by any applicable laws or regulations, X5 Retail Group N.V. undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events or circumstances after the date of this document.
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