Gallery Ordered to Pull Down Billboards
Moscow has set to billboard dismantling of greatest extent. The City Hall told Gallery, which is the second on Russia’s billboard market, to pull down 2,550 billboards on the Moscow Ring Road. The billboards are the key asset of Westdia Media, which worth Gallery estimated at $60 million during last year’s buyout.
The dismantling of Gallery billboards on the Moscow Ring Road has been reported by a few market players of Moscow. The letter that Westdia Media General Director Dmitri Gritsenko sent to Vladimir Makarov, head of Moscow government’s committee for advertizing, says that Westdia Media acquired the right to install billboards at the tender in 2006, it has the five-year lease contract that expires June 22, 2011 and the permit given by the committee that expires in 2012.
On December 2, Gritsenko goes on, the company received notification that it must immediately dismantle billboards by December 4 “under the ruling of Moscow mayor.”
Makarov couldn’t explain yesterday why Luzhkov had ordered the dismantling. But he said that the billboards would be pulled down till this year-end and Gallery would get no compensation.
Overall, the dismantling will extend to 2,550 billboards (1.2m õ 1.8m). They are owned by Westdia Media that Gallery and one of its holders, Baring Vostok Capital Partners (BVCP), bought out in 2006 for $60 million. Under the estimate of ESPAR-Analytic, the billboards used to generate $7 million to $8 million a year.
Gallery owns a network of roughly 43,000 billboards in Russia and Ukraine. The nine-month revenues stood at $99.461 million (+100 percent), adjusted EBITDA reached $28.442 million (+101 percent). Baring Vostok Capital Partners owns 45.7 percent in Gallery, 21.3 percent belongs to Morgan Stanley Bank, EBRD has 7.5 percent and the founders own 25.5 percent.
www.kommersant.com
All the Article in Russian as of Dec. 14, 2007
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