Page 122 - RusRPTJun19

offer to minority shareholders, which was part of the deal, Lenta reported to the London Stock Exchange. The acquisition by Severgroup was carried through despite minority shareholders questioning the deal and urging to study a competing offer from rival retailer Magnit, which proposed a slightly higher share price and could bring retail industry expertise that Severgroup doesn't have. Under a binding agreement announced on April 1, Lenta's main shareholders TPG and the European Bank for Reconstruction and Development (EBRD) were to sell their 34.44% and 7.47% stakes in Lenta respectively, to Severgroup for $3.60 per GDR. The total amount of the deal stood at $729mn and the retailer is valued at $1.75mn.
Russian shoe manufacturer and retailer Obuv Rossii (Shoes of Russia) more than doubled its IFRS net profit in 1Q19, posting bottom line growth of 161% to RUB217mn (up by 126% to $3mn in US dollar terms). The company's Ebitda was up by 77% y/y, with both net profit and earnings beating consensus expectations for the reporting quarter. BCS Global Markets attributed net income beat to "increased gross profit (+31.6% y/y), decline in SG&A costs [costs of goods sold] as a % of revenue to 38.8% - driven by good performance from relocated stores, rent cost cutting and growth of LfL [like-for- like] cash loans growth by 26.3% and increase of interest income.” The company's retail turnover in 1Q19 rose by 13.1% y/y driven by 23.8% growth in DOS [Directly Operated Stores] selling space and 2.1% increase in LfL sales. Cash loan revenue was up 20.5% y/y. Company's gross margin improved to 61.2% from 52.6% for the same quarter of last year. Ebitda margin gained 8.7pp y/y to 24%.
French household appliances, building materials and DIY chain Leroy Merlin will develop Maksipro, a new retail chain in Russia specialising on construction materials, Kommersant daily reported on May 27 citing the press- service of the company. Now Leroy Merlin will expand with a new format, which will target corporate buyers and SMEs, and besides selling construction materials will provide show rooms, instruments and utilities rentals, spaces for co-working, meetings, and training. At least two of the Maksipro hypermarkets will replace former K-rauta stores of Finish Kesko in the Moscow region.
An investment fund owned by Russian tycoon Mikhail Fridman announced in May it has secured majority control of struggling Spanish discount supermarket chain Dia via a public share offer. LetterOne was already the largest shareholder with a 29% stake in Dia before the offer, which closed Monday, that brought it an additional 29.4% of ownership in the chain, which operates supermarkets in Brazil, Argentina and Portugal in addition to Spain. Shareholders rejected in March a turnaround plan by Dia's managers that would have seen them stump up more cash, thus paving the way for Luxembourg-based LetterOne, which has promised to inject 500mn euros ($560mn) into the firm. LetterOne also said it had reached agreement with 16 out of 17 of Dia's creditors on a viable capital structure for Dia, which has around 1.5bn euros in debt. The buyout price of 0.67 euros per share represented major losses for long-term investors as Dia shares were trading at above 4.00 euros until the beginning of last year. Dia faced pressure on its margins from rivals German discount chain Lidl and Spain's Mercadona, with a tactic of offering super sales on a handful of items to lure in clients backfiring when stocks would quickly sell out leaving many customers frustrated. Hyperinflation in Argentina, where it has 16% of its stores, also hurt performance. The company posted a net loss of nearly 145mn euros in the first three months of this year, after losing 353mn euros in 2018.
9.2.6 Agriculture corporate news
Miratorg, one of Russia's largest agricultural holdings and leader in
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