Page 18 - bne_Tech_05_2019

Investment
May 2019 www.intellinews.com I Page 18
Russian Ozon e-commerce major raises another loan for expansion
One of Russia's oldest online market places Ozon raised a RUB10bn ($155mn) convertible loan from its two largest shareholders AFK Sistema multi- industry investment conglomerate and Baring Vostok fund, Vedomosti daily reported citing all the participants of the deal.
The funds raised would be used to "support the strategy of aggressive market expansion that was stated by the company in 2018." Ozon has been posting stable results, but revenue growth in the last quarters was clipped by unresolved logistics and infrastructure issues.
In the end of 2018 the company said it will address the issue intending to raise several hundreds of million dollars in equity in 2019 to support new investments in logistics and IT. With giant capital injections in 2011 ($100mn), 2014 ($150mn) and 2018 (up to $92mn), Ozon is one of the most well- funded Russian e-commerce companies.
The online retailer now plans to build a new order processing centre in the Moscow region with a total surface of over 0.1mn square meters, as well as ex-
panding logistics infrastructure in Russian regions.
Previous estimates put the needs of Ozon for additional funding at $200mn. The recent $155mn loan granted by the shareholders confirms
their commitment in seeing Ozon through the infrastructure challenge. Previously Sistema and Baring Vostok Capital Partners (BVCP) said they intend to increase their respective shares to 40% and develop the retailer for an IPO.
In March one of Russia’s "big four" mobile operators Mobile TeleSystems (MTS) completed the sale of 18.7% stake in Ozon Holdings to AFK Sistema for RUB7.9bn ($120mn). As a result of the deal the share of Sistema in Ozon will reach 19.3%, with another 16.3% held by Sistema's venture fund Sistema_VC.
"The deal suggests a RUB42bn valuation for 100% Ozon. The price is at the lower end of valuations for the recent deals, in which Sistema and Baring Vostok increased their stakes in Ozon," Maria Sukhanova of BCS Global Markets estimated in February when the deal was first announced.