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EBRD funding to spread German family-owned hypermarket model in Russia
Bank syndicates 66 percent of its €134 million 10-year loan for Globus’s Russian arm
The EBRD is lending €134.5 million to OOO Hyperglobus, the Russian arm of Germany’s Globus hypermarket chain, to fund its expansion in medium-sized towns in central Russia which have so far had little or no experience of modern high-quality food retail formats.
The Bank is taking up to €45.6 million of the total onto its own books under an EBRD A/B loan structure. The remaining €88.9 million is being syndicated to a group of international banks as a B loan. Participating banks are HypoVereinsbank, Member of UniCredit Group, and Raiffeisen Zentralbank Österreich AG. The maturity of both the EBRD’s A loan and B loan is 10 years.
The EBRD has long been active in funding Russia’s food retail sector, one of the fastest growing segments of a resurgent economy, but this is the first time that it is raising finance for a foreign food retailer in this country. The loan will help to build up to five hypermarkets in towns situated within a radius of 35 to 400 kilometres of Moscow.
This transaction will bring high levels of choice, hygiene, service and efficiency to consumers outside major centres in the regions of Russia, said Alain Pilloux, EBRD Business Group Director for Agribusiness.
By introducing modern retail best practice and encouraging competition the investment will help keeping prices at affordable levels for consumers. Local producers will benefit from the opportunity to sell to a strong market player with high efficiency in purchasing, logistics, technology and distribution, Mr. Pilloux added.
Hyperglobus is fully owned by Globus Holding GmbH & Co., a medium-sized family company established in 1828 which is now one of Germany’s 10 largest retailers. In Russia, the chain is already operating three stores in small towns situated up to 50 kilometres from the capital, but its strategy is to expand in the regions.
To date the EBRD has committed over €1.2 billion in 56 agribusiness projects in Russia.
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