Czech PPF buys 50% stake in Russian Eldorado
Czech Republic’s PPF Group has purchased 50% of shares in Russia’s largest home electronics retailer Eldorado.
Russian Business Daily Vedomosti
reported the deal is worth around $400-800 million, although market
players assessed the company’s value at $4-5 billion based on 2007
results.
Two PPF managers, speaking on
condition of anonymity, said this was not a standard purchase, but a
commercial deal where PPF Group N.V. provides credit to Eldorado
receiving a stake in the company as security on the loan. Home
Credit and Finance Bank, Eldorado’s main consumer credit partner,
is part of PPF Group.
The problems first arose in February
following a tax claim for 15 billon rubles ($625 million) against
the electronics retailer. The company said in March it planned to
appeal the tax claim. Eldorado was also hit by other financial
difficulties after banks, including Gazprombank and Sberbank,
recalled $400 million worth of loans affecting the company’s
supply chain.
Yakovlev, the company’s president
and a major shareholder, earlier said that the retailer would have
to sell some of its assets if it lost the case. Eldorado’s total
debts stand at $1 billion.
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