The Federal Antimonopoly Service has approved Sberbank plans to acquire 25% + 1 voting shares of childrens toy retailer, Detsky Mir.
AFK Sistema is the owner of Detsky Mir (Childrens world). Sistema President Leonid Melamed says the company is looking to attract a strategic investor to develop the Detsky Mir retail network. Sberbank has confirmed that the possibility of it becoming that strategic investor is under discussion.
Julia Belous from AFK Sistema says the coming November shareholders meeting will see proposals to restructure the company capital and debts under consideration.
"The company plan to raise its capital and repay its debts by issuing additional common shares. Sberbank is involved in discussion as a potential investor on the basis of additional share purchase”
Alexei Krivoshapko General Director Prosperity Capital Management says Detsky Mir could be worth $ 120-150 million excluding debt. The retail chain’s debt amounted to $224 million on July 1, with the revenue of $261 million and negative $4 million OIBDA.
Experts believe that the deal will bring the retail chain back to profit and will help to reduce its debt burden. However, Alexandra Lozovaya analyst at InvestCafe says Sberbank may look to sell on the stake.
“The deal is rather logical for the Detsky Mir as their main issue is to over come the net loss and repay all debts. On the contrary, Sberbank take a serious move to mixed upon his assets with a new non-core asset of retail Detsky Mir. The only possible solution is to resell retail chain asset to a core investor with the bank help”