X5 Retail Group, Russia's largest supermarket chain, has bought 100% of discounter chain Kopeika for 51.5 billion rubles ($1.66 bln) from Nikolai Tsvetkov, a core owner of Uralsib financial group, X5 said on Monday.
"X5 Retail Group has signed an agreement to acquire the Kopeika retail chain. The overall volume of the deal amounted to 51.5 billion rubles (debt inclusive)," the company said in a statement.
The deal is to be closed in the second half of December 2010.
Kopeika's debt does not exceed 16.5 billion rubles.
The deal will be financed with funds which Russia's top bank Sberbank will grant to X5, including 30 billion rubles from a new five-year revolving credit facility with a $1 billion limit in ruble terms and the repayment deadline in December 2015. The remaining funds will be raised from the existing credit lines opened for X5.
The new credit line does not require an asset pledge and will be granted on terms comparable with the terms of crediting offered by leading Western banks to X5.
After the deal is over, the retailer's net debt/EBITDA ratio will be slightly higher than 3 and will match the company's target indices, X5 said.
X5 also plans to refinance Kopeika's bank debt on better terms by reaching new agreements with creditors and using its available credit lines, it said.
"We consider that we will be able to considerably increase sales from each square meter of trading space (in Kopeika stores) by improving the range of goods, prices and other factors in the next few years," X5 said.
After the deal, the number of X5 discount stores in Moscow and the Moscow region will increase by 75%, while the market share will amount to about 13%. X5's trading space will increase by 25% to 1.4 million square meters, pro-forma combined retail trade turnover will grow by 20% to 360 billion rubles and pro forma EBITDA will rise by 16% to 27.7 billion rubles.
X5 will re-brand Kopeika discount stores into Pyaterochka within two years, it said.
MOSCOW, December 6 (RIA Novosti)
