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Eastern Europe
October 12, 2018 www.intellinews.com I Page 18
Supermarket chain Eurotorg confirms plans for Belarus’s first ever IPO
bne IntelliNews
Belarus’s leading supermarket chain Eurotorg (aka Evroopt) confirmed earlier reports that it plans to IPO in London in the near future, in what will be the small republic’s first ever IPO, the company said in a press release issued on October 11.
The company announced it had submitted regis- tration documents to the London Stock Exchange (LSE) on October 4, but has now followed through with a formal announcement of its intention to of- fer shares for sale.
Eurotorg also announced it was appointing four independent directors to its board to boost its cor- porate governance.
“Today’s announcement of our intention to pro- ceed to IPO represents another milestone in the history of Eurotorg,” the company’s CEO Andrei Zubkou said in the press release.
“In addition, the appointments we are announcing today represent a significant step in strengthening our corporate governance. The three individuals who have agreed to join the board as independent non-executive directors have outstanding interna- tional credentials as directors and senior execu- tives, as well as profound knowledge of the retail industry and of growing global tech and digital businesses, as we continue to develop our market- leading profitable e-commerce operations. We look forward to benefiting from their experience as we seek to create value for all our stakeholders.”
Supermarket chain Eurotorg is the biggest in Belarus.
The company’s shares will be offered as Global Depositary Receipts (GDRs) representing the underlying ordinary shares of the company regis- tered in Belarus and will be listed on the LSE.
“The company expects to raise approximately $200mn in primary proceeds to the company. The total offering size is expected to be more than $300mn,” Eurotorg added in its press release. “The company intends to use the net proceeds to partially repay the group’s foreign currency debt, in line with its strategic objective of reducing its foreign currency debt exposure.”
Eurotorg is the largest food retailer in Belarus with around a 20% market share and recently reported strong first half of 2018 results where net profit was up by 16.6% year-on-year to BYN68.7mn ($34.5mn) and the net profit margin ticked up slightly to 3.2%. However, the company has been struggling under a debt burden which it has been at pains to reduce.
Eurotorg, which was facing a very high possibility of default on its debt obligations to local banks, placed $350mn five-year Eurobonds in October 2017. Fitch Ratings has assigned Eurotorg a Long- Term Issuer Default Rating (IDR) of 'B-(EXP)' with a stable outlook. At the same time, Fitch assigned an expected rating of 'B-(EXP)'/'RR4' to Eurotorg's proposed notes.
Successful measures to reduce debt, combined with solid Ebitda growth, helped to improve the