X5 announced plans last December to open as much as 100 Perekrestok stores across Russia in the next seven years.
Photo: Yury Martyanov
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Russia’s Major Retailer to Issue $1Bln Bonds
X5 Retail Group is to issue 25 billion ruble-worth bonds this year to service short-term loans and develop Perekrestok hypermarkets. Analysts say that a portion of the money may be spent on acquisitions. According to unofficial sources, the company is now eyeing 100 stores in its franchise chains in Volgograd, Ufa and Chelyabinsk.
Russia’s major food retailer X5 Retail Grop announced plans on Thursday to issue bonds worth 25 billion rubles. The three issues of bonds are to be in circulation for seven years. The first 9 billion ruble tranche is to be issued in March, the other two 8 billion ruble installments – before the end of 2006, X5’s spokesman Gennady Frolov told Kommersant. Two-thirds of the money raised is to be spent on debt servicing. The remaining one-third will finance the company’s development, chiefly the construction of the Perekrestork hypermarket chain. Last December X5’s head Lev Khasis informed Kommersant of plans to open as much as 100 Perekrestok stores across Russia in the next seven years.
X5 Retail Group (former Pyaterochka Holding) was set up in May 2006 following the merger of two retail giants, Perekrestok and Pyaterochka. The chain united 451 Pyaterochka and 168 Perekrestok stores before the end of 2006. The company’s profits in 2006 were over $3.45 billion, according to early reports.
Analysts believe that X5 may spend a portion of the money to acquire new assets as the company earlier declared plans to buy out some of its franchise stores in regions. A Kommersant source close to the company says X5 is considering stores in Volgograd, Ufa and Chelyabinsk.
www.kommersant.com
All the Article in Russian as of Feb. 02, 2007
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