Czech group, PPF, has completely bought out Russian household appliances and electronics retailer, Eldorado, with no price officially disclosed, but Russian daily, Kommersant citing a figure of $625 million, referring to sources.
PPF Group and Igor Yakovlev, the Russian entrepreneur, announce that they settled the deal through which PPF Grouphas completed the full control overEldorado, the retail chain distributing household appliances and consumer electronics. The parties agreed that Igor Yakovlev, the founder of the business, sells its remaining stake of50% minus 1 share and PPF Group buys this stake. PPF Group acquired a controlling stake of 50% plus 1 share in Eldorado already in 2009.
Key PPF shareholder Jiri Smejc, says the attraction of buying out Yakovlev’s stake stems from increasing exposure to Russian consumers, and leveraging its existing position in the Russian market.
“The consolidation of ownership in Eldorado has been one of our strategic priorities from the very beginning and today it creates the platform for PPF to be a significant player in the Russian retail market.”
The company added that the buyout had already been approved by Russia’s Federal Antimonopoly Service.PPF Group became a creditor of Eldorado in September 2008, when it allowed the Russian retailer $500 million to pay its outstanding debts to Russian banks and recover supplies. A 51% stake in Eldorado became collateral then, with the Czech Group also getting the opportunity to buy a majority stake in the future.
Later in 2009 PPF together with the Italian insurance Group Generali agreed to convert a part of Eldorado’s debt, $300 million of the $500 million, into a controlling stake in Eldorado, as well as taking a stake in Yakovlev’s personal development projects – Advantage Group and Real Estate Development, according to Kommersant. In December 2010 the Czech Group bought out 10% of Eldorado from Generali for €46 million, consolidating a 50% +1 share stake in the Russian retailer.