23rd Jul 2008 16:23
X5 TO File ARBITRATION claims AGAINST FEDERAL ANTI-MONOPOLY SERVICE
Amsterdam, 23 July 2008 - X5 Retail Group N.V. ("X5" or the "Company"), Russia's largest retailer in terms of sales (LSE ticker: "FIVE"), will apply to the Arbitration Court of the City of Moscow to invalidate the decision by the Federal Anti-Monopoly Service (the "FAS") to issue an Order in conjunction with its approval of the acquisition of the Karusel hypermarket chain and to declare the FAS' actions illegitimate as they are in breach of the anti-trust legislation.
As the Company announced on 12 May 2008, the approval by FAS of the acquisition of Karusel hypermarket chain by X5 contained a number of requirements in a form of an Order with regard to the conduct by X5 of its business in St. Petersburg, including the Company's dealings with suppliers (the "Order"). In accordance with the Order and within the required timeframe, the Company has developed and submitted to FAS for approval rules relating to its dealings with suppliers in St. Petersburg.
However, having undertaken a thorough analysis of the situation, the Company has concluded that FAS' decision to issue the Order has no legal grounds and contradicts with the applicable Russian legislation. The requirements stipulated in the Order restrain competition as they limit X5's business activities in St. Petersburg by setting a confined list of services that can be offered by the Company, limit the Company's ability to choose counterparties and may potentially put the Company in a wittingly unequal position versus other companies working in the St. Petersburg food retail market. Moreover, as the Order contains some unspecified requirements that FAS plans to define later as well as requirements, fulfilment of which depends on third parties, the Order is not practicable and creates basis for unjustified accusation of the Company for not obeying the Order.
Therefore, X5 will apply to the Arbitration Court of the City of Moscow with a request to invalidate the Order issued by the FAS and to declare the FAS' actions illegitimate as they are in breach of the anti-trust legislation.
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For further details please contact |
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Anna Kareva IR Director Tel.: +7 (495) 502-9751 e-mail: [email protected] |
Elena Cherkalova PR Manager Теl.: +7 (495) 950-5577 e-mail: [email protected] |
Note to Editors:
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 June 2008, X5 had 991 Company-managed stores located in Moscow, St. Petersburg and other regions of European Russia, Urals and Ukraine, including 762 soft discount stores, 190 supermarkets and 39 hypermarkets.
As of 30 June 2008, X5's franchisees operated 710 stores across Russia and in Kazakhstan.
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.
X5 Retail Group N.V.'s net retail sales for the first half 2008 surged 61% in USD terms and reached USD 3,744 mln (excluding Karusel). Including Karusel on pro-forma basis the Company's net retail sales for the first half 2008 totaled USD 4,303 mln.
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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