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EBRD leads international bank syndicate to finance Russian supermarket chain
A high-quality food retail supermarket chain, "Perekrestok" (or Crossroads), will soon open its doors to the Russian public as a result of a US$ 42 million loan extended to the Russian Alfa Consortium by the European Bank for Reconstruction and Development (EBRD), of which US$ 17.5 million has been syndicated to four international banks.
Guy de Selliers, Deputy Vice President of the EBRD, said: "The EBRD is fully committed to providing limited-recourse financing to Russian projects focused exclusively on the domestic market. We believe that this project will contribute to the development of an important element of the Russian economic infrastructure, namely food and consumer goods distribution and merchandising. In addition, we were impressed by the willingness of the Alfa Consortium to work with the EBRD and the other co-financiers in an open and transparent manner."
The borrower is ZAO Perekrestok, owned by Alfa Eco, part of the Alfa Consortium of companies, one of the largest new industrial-financial conglomerates in Russia. Perekrestok already operates five supermarkets in the Mitino, Solntsevo, Marjino and Butovo districts of Moscow which address the existing weaknesses of the city's retail food distribution infrastructure. Mikhail Fridman, Chairman of the Alfa Consortium, commented: "The EBRD's loan to Perekrestok is an important step for the Alfa Consortium as it reflects our increasing ability to access international sources of capital which will have a positive impact on our future growth."
The EBRD's loan will enable Perekrestok to open six additional supermarkets in the districts of Zhulebino, Tjoply Stan, Otradnoje, Novo-Kosino and Pechatniki over the course of the next 18 months. The stores, supplied from a central distribution warehouse, are to be located close to large residential communities, and will provide a comprehensive customer-oriented service as well as a large selection of both Russian and imported goods at affordable prices for Moscow's lower- and middle-income population.
"By syndicating a significant portion of the loan, the EBRD has established an important precedent for Russian domestic transactions," said Noreen Doyle, EBRD's Deputy Vice President for Credit and Commercial Co-Financing. "The four banks are providing finance on terms similar to the EBRD, reflecting both the credit quality of the sponsor and borrower as well as an improved perception by the international financial community of transactions in Russia in general."
The syndicate banks are Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), Coöperatieve Centrale Raiffeisen-Boerenleenbank (Rabobank), Bank Austria and Bank Przemyslowo-Handlowy, IV Branch (BPH) in Krakow.
The Alfa Consortium is active in a number of different fields. Apart from Alfa Eco, which is the main trading arm, the Consortium includes Alfa Bank, one of the ten largest banks in Russia on the basis of its assets, and Alfa Capital, one of the largest Russian investment funds.
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