The main beneficiary of “Magnit” Sergei Galitsky, who now owns 35.3% of the shares of the retailer, intends to sell securities for $ 700 million.
According to the London Stock Exchange at the close on November 14, where the retailer trades, $ 700 million corresponds to a 5.8% stake in the company. The company’s capitalization is now estimated at $ 11,995 billion. The state of the Galician Forbes estimates $ 5.1 billion.
According to the network, offshore company Lavreno Limited will purchase shares under the Halyk repo transaction and after a certain period of time will sell them. After that, Magnit will issue new shares in the open subscription.
As a result, the company plans to allocate the funds to finance the expansion of the trading network (60% of funds) and the vertical integration program (40% of funds). According to the network’s own forecast, next year Magnit will open more than 2,000 “home stores”, 21 hypermarkets and “Magnit Family” store, as well as 670 stores of drogeries.
At the opening of new “shops near the house” the company plans to direct about 25% of the volume of raised funds and about 15% to stores of drogeri. Another 20% of the funds will be spent on updating existing stores. The strategy of vertical integration implies investments of up to 80 billion rubles over the next three years, they will be directed to the development of agricultural and production clusters in Krasnodar, Tver and Togliatti.
The decision of the billionaire to part with his package was soon followed by the publication of the quarterly report of the retailer, disappointing investors. Then the company reported that the profit fell by 53.3%, to 6.9 billion rubles, EBITDA – by 27.9%, to 20.65 billion rubles. After that, the shares of the network collapsed by almost 12%, to 8442 rubles per share, while the state of Halytsky decreased by $ 606 million, to $ 6.121 billion.
The billionaire has been reducing its share in Magnit for several years: in February 2015, Galitsky through Lavreno Limited sold 1 million of its shares to the company, and in April 2016 reduced its stake in Magnit from 38.7% to 35.3% to finance personal projects.
Article in Russian: Forbes