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EBRD lends $50 million to Russian retail chain Azbuka Vkusa
Loan to finance expansion and branded ‘ready-meals’
The European Bank for Reconstruction and Development has agreed to lend the privately-owned Azbuka Vkusa, one of Russia’s leading supermarket chains, with a $50 million 9-year loan to finance the expansion of retail operations and the establishment of a state-of the art ready-meals production facility.
The Bank will syndicate up-to $20 million to commercial banks, keeping $30 million for its own account under an EBRD A/B loan structure.
The project represents an opportunity for the EBRD to support a locally-owned and operated food retailer seeking to promote high quality standards of services and goods through the Russian and CIS markets while offering a highly diversified product mix, said Gilles Mettetal, EBRD’s Director for Agribusiness.
The EBRD believes that the development of the retail sector plays a major role throughout the food chain and that its funding for a company committed to high quality standards will therefore have a visible demonstration effect on the rest of the market, Gilles Mettetal added.
Maxim Koshcheenko, CEO and co-owner of Azbuka Vkusa, said: «We are glad to benefit from EBRD’s experience in emerging markets. EBRD financing will play a substantial role in supporting a new strategic phase in our development, as well as will further leverage our operational excellence and premium offering to the CIS market».
Russia’s fast-growing but fragmented retail market is rated eighth in the world in terms of capacity with food retail sales (modern grocery distribution) of $145 billion in 2006. The top three players accounted for less than 6 per cent of the market in 2006 versus an average of almost 60 percent in Europe.
* Azbuka Vkusa supermarket chain was founded in 1997. The company operates in the premium retail format focusing on a high quality service and an exquisite assortment of fresh food, delicatessen, semi-ready and ready meals. Azbuka Vkusa operates 24 supermarkets in Moscow and Moscow region and employs more than 4,000 people. The chain works with more than 500 local and international suppliers in Russia and abroad. Website: www.azbukavkusa.ru
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