AFK Sistema refused to buy the owner of Zarina and Love Republic
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AFK Sistema and the Swedish company Eastnine (the main owner of Melon Fashion Group, which manages Zarina, befree, Love Republic and Sela) terminated the deal to sell a 47.7% stake in the retailer to a Russian company. About it informs Eastnine press office.
“The agreement on the sale of Eastnine’s stake in MFG PJSC AFK Sistema has been terminated. Eastnine will continue to seek a way out of its investment and is in dialogue with potential buyers,” the statement said.
The reason for the termination of the agreement was the failure to comply with its terms. It is noted that Eastnine expected to close the deal in the first quarter of 2023, but by this time not all obligations had been fulfilled. The parties came to the conclusion that it was “impossible to fulfill these conditions,” the statement said.
The press service of AFK Sistema also noted that the agreement was terminated by mutual decision.
In October 2022, AFK Sistema and Eastnine signed a binding agreement to acquire from the Swedish companies Eastnine and East Capital Holding, as well as a group of private investors, a 47.7% stake in Melon Fashion Group JSC. The deal amounted to 15.8 billion rubles. Then it was expected that it would be closed until the end of 2022.
Later in a Russian company declared about readiness to redeem up to 100% of the authorized capital of Melon Fashion Group JSC. AFK Sistema offered to buy back the shares at the deal price announced on 19 October. In total, the company was ready to spend about 33 billion rubles. to buy a retailer.
Melon Fashion Group is one of the largest clothing retailers in Russia. She owns the trademarks Zarina, befree, Love Republic and Sela. At the end of 2021, the company operated 845 stores in 181 cities in Russia and the CIS (in Kazakhstan, Armenia and Belarus). Last year’s revenue amounted to 37.3 billion rubles. (against 25 billion rubles in 2020), net profit – 3.2 billion rubles.
In addition to Eastnine and East Capital, Melon Fashion Group is owned by Chairman of the Board of Directors David Kellermann (40%) and CEO Mikhail Urzhumtsev (6%). The remaining stake belongs to a group of private investors.
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