Eastnine to sell a 36% stake in Zarina and Love Republic to a Russian company – Kommersant
[ad_1]
Swedish Eastnine AB has signed an agreement on the sale of about 36% of the fashion retailer Melon Fashion Group (MFG; manages clothing stores Sela, Zarina, Love Republic) to Russia’s GEM Invest LLC. According to press release on the Eastnine website, the share purchase price is approximately 15.6 billion rubles. (about €149 million). The transaction is expected to be completed within two weeks.
“Eastnine, together with other European shareholders of MFG, entered into an agreement under which the entire investment will eventually be sold to the Russian company GEM Invest LLC. The transaction will take place in several stages, approved by the Federal Antimonopoly Service of Russia and the government commission for the control of foreign investment in the Russian Federation. The company noted that Eastnine’s investment in MFG as of June 30, 2023 was approximately €162 million.
Eastnine said in a statement that the deal is complicated by “significant uncertainties and risks.” Among them, the company indicated the risk of further sanctions and actions by the authorities. “Because the purchase price is paid in rubles, Eastnine, upon completion, will have currency risk against the Russian ruble until the exchange is made,” the company added.
Melon Fashion Group was founded in 2005 on the basis of the Pervomaiskaya Zarya garment factory in St. Petersburg. According to its own data, at the end of 2022, the group included more than 850 stores in 180 cities of Russia, as well as Kazakhstan, Armenia and Belarus. According to SPARK-Interfax, the revenue of Melon Fashion Group JSC in 2021 increased by 49% year-on-year, to 37.3 billion rubles, net profit doubled, to 3.2 billion rubles.
In October, AFK Sistema agreed to buy a 47.7% stake in Melon Fashion Group from Swedish Eastnine, East Capital Holding AB and a group of private investors. The amount of the transaction was to be 15.8 billion rubles. However, in March the Swedish company reported on termination of the agreement with AFK Sistema. According to two Kommersant sources in the retail market, the reason for the gap was the impossibility of Sistema consolidating a larger stake in the retailer.
More details – in the material “Kommersant” “”System” carried out clothes”.
[ad_2]
Source link
