X5 Retail Regulatory News (FIVE)

18 Jan 2006 07:11

Pyaterochka Holding N.V.18 January 2006 THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE RUSSIAN FEDERATION, AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OF AMERICA. 18 January 2006 PYATEROCHKA ANNOUNCES ACQUISITION OF 26% STAKE IN CHELYABINSK FRANCHISEE PYATEROCHKA TO ACQUIRE 51% STAKE IN COMBINED CHELYABINSK AND YEKATERINBURG OPERATIONS: "PYATEROCHKA URAL" Pyaterochka Holding NV, Russia's leading retailer, yesterday signed an agreementto acquire a 26% equity stake in its franchise operator in the Chelyabinskregion of Russia, Ural-Agro-Torg, an important step towards the company'sstrategy of building a "cluster" of operations in the Ural region. Pyaterochka's operating subsidiary, Agrostar, has agreed to purchase a 26% stakein Pyaterochka's franchisee in the Chelyabinsk region, Ural-Agro-Torg, for acash payment of 43.5 million Russian rubles (approximately US $1.5 million). Ural-Agro-Torg currently operates 29 stores in the Chelyabinsk region, with netselling area of approximately 14,300 square meters. Ural-Agro-Torg had grosssales of approximately US $40 million in 2005. This transaction is the first step towards the creation of a "cluster" ofoperations in the Ural region. Pyaterochka also signed agreements yesterday outlining steps for furtherconsolidation of its operations in the Chelyabinsk and Yekaterinburg regions.According to these agreements, by 1 June 2006, Pyaterochka and the majorityowner of Ural-Agro-Torg will combine the operations of the Chelyabinsk andYekaterinburg regions to form a new entity, Pyaterochka Ural. Pyaterochkaacquired 100% of the equity of its Yekaterinburg franchisee, Economtorg, in2005. Pyaterochka Ural will be owned 51% by Pyaterochka Holding and 49% by themajority shareholder in Ural-Agro-Torg, the Chelyabinsk franchisee. Themajority shareholder of Ural-Agro-Torg will contribute his 74% stake inUral-Agro-Torg in exchange for a 49% stake in Pyaterochka Ural. Agrostar,Pyaterochka's operating subsidiary, will contribute its 26% stake inUral-Agro-Torg, as well as 100% of the equity in the company's Yekaterinburgoperations, in exchange for a 51% stake in Pyaterochka Ural. Pyaterochka Ural will control all of Pyaterochka's operations in the Chelyabinskand Yekaterinburg regions as of 1 June 2006. Under the terms of the agreement,the top management team of Ural-Agro-Torg will remain in place to manage theday-to-day operations and expansion plans of Pyaterochka Ural in the Chelyabinskand Yekaterinburg regions. The Chelyabinsk and Yekaterinburg regions currently have 50 Pyaterochka stores.Pyaterochka Ural plans to open a wholly-owned distribution center to serve theUral region in 2007 - 2008. Additional agreements were also signed yesterday outlining the steps and termsfor Pyaterochka to increase its stake in Pyaterochka Ural to 74% in 2008 and to100% in 2009. In 2008, Pyaterochka has the right to purchase an additional 23%equity stake in Pyaterochka Ural, raising its equity share in the company to74%, at a price which will be determined on the basis of the 2007 financialresults of Pyaterochka Ural's operations. In 2009, Pyaterochka has the rightto purchase the remaining 26% stake in Pyaterochka Ural, increasing itsownership in Pyaterochka Ural to 100%. The purchase price of this transactionwill be determined on the basis of the 2008 financial results of PyaterochkaUral's operations. - End - Enquiries to: Tanja Djurdjevic Investor Relations Mobile : +7 495 724 6414 Email : ir@e5.ru Notes to Editors: Pyaterochka is the largest grocery retailer in Russia in terms of sales, with achain of 347 company-managed stores located in the Moscow, St. Petersburg andYekaterinburg areas as of 1 January 2006. In addition to the company's own stores, franchisees operate 404Pyaterochka-branded stores in the Russian regions outside of Moscow and St.Petersburg, Kazakhstan and Ukraine as of 1 January 2006. Pyaterochka's stores are conveniently located "soft" discount stores, open sevendays a week from 9am to 10pm, offering a product range of up to 4,500 itemscovering the day-to-day needs of its customers. The information contained herein is not for publication or distribution in theUnited States of America. These materials do not contain or constitute an offerof securities for sale in the United States. The securities of PyaterochkaHolding N.V. have not been and will not be registered under the U.S. SecuritiesAct of 1933, as amended, and may not be offered or sold in the United Statesabsent registration under that Act or an available exemption from it. This announcement does not constitute an advertisement, an offer to sell or thesolicitation of an offer to purchase any securities in the Russian Federation orany other jurisdiction. These materials are directed only at (a) persons who have professionalexperience in matters relating to investments who fall within Article 19(1) ofthe Financial Services and Markets Act 2000 (Financial Promotion) Order 2001(the "Order") or (b) high net worth entities, and other persons to whom it mayotherwise lawfully be communicated, falling within Article 49(1) of the Order(all such persons together being referred to as "relevant persons"). Any personwho is not a relevant person should not act or rely on these materials. Personsdistributing these materials must satisfy themselves that it is lawful to do so. This information is provided by RNS The company news service from the London Stock Exchange