PPF - Eldorado transaction concluded
Through a debt for equity swap, PPF Group has acquired a controlling stake (50% plus one share) in Eldorado, Russia´s largest electronics and domestic appliances retailer for USD 300 million, As part of the joint venture, PPF Group has also acquired a significant number of real estate properties, comprising principally the retail business premises and certain Russian real estate development projects from Mr Igor Yakovlev’s own portfolio. In addition to the initial capital injection, PPF Group has secured an additional USD 500 million in refinancing for the joint venture‘s future growth.
The joint venture between the parties does not include the operations, assets or liabilities of Eldorado in the Ukraine.
According to the Shareholders Agreement, PPF Group and Igor Yakovlev will manage the joint venture through their representatives on the Board of Directors, to which both partners have a right to appoint 2 members each, with PPF Group holding the casting vote.
Jiri Smejc, PPF Group shareholder said: “This transaction will strengthen Eldorado´s capital position, enabling the retailer to successfully address current macroeconomic turbulence and consumer market changes in Russia. The capital increase and additional refinancing we have secured as part of this transaction have reinforced our commitment to Eldorado´s business development including an increase in service quality. Through our partnership with Igor Yakovlev, PPF Group is committed to sharing its vast experience in corporate restructuring and business development within the Russian retail market. We aim to make Eldorado even stronger amongst its local competitors, both in business and financial terms, in order to reconfirm its leadership in the Russian retail market“.
Igor Yakovlev, Eldorado’s founder, emphasises this: “With PPF Group, the network will gain a strong partner and an investor with a vast commercial experience. Historically Eldorado and PPF are long-term partners in the Russian market. I am confident that PPF’s expertise, its effective and flexible corporate culture, as well as the stable management team, will boost Eldorado‘s further successful development in the Russian market so that eventually it will become the number one choice consumers.“