Russia's Sistema buys $256 mln stake in Melon Fashion Group after scrapped IPO
19/10/2022 09:12
*
This content was produced in Russia where the law
restricts
coverage of Russian military operations in Ukraine.
MOSCOW, Oct 19 (Reuters) - Russian
telecoms-to-healthcare conglomerate Sistema AFKS.MM agreed a
$256-million deal for a stake in Melon Fashion Group on
Wednesday, months after the retail outlet scrapped plans for an
initial public offering (IPO) due to the conflict in Ukraine.
Based in St. Petersburg on a site that housed a sewing
factory in Soviet times, Melon owns four mainly women's fashion
brands - Zarina, Befree, Love Republic and Sela - and had 846
stores across Russia, Armenia, Kazakhstan and Belarus at the end
of 2021.
Plans for an IPO sometime this year were shelved after
Russia launched what it calls its "special military operation"
in Ukraine.
In a statement, Sistema said it would acquire 47.7% of Melon
from Swedish investment group Eastnine and East Capital Holding
and some private investors for a total of 15.8 billion roubles
($256 million).
For Eastnine, the sale represents a rare successful exit for
a Western firm offloading its Russian assets. It will secure
around 193 million euros ($189 million) for its 36% stake,
Eastnine said in a statement.
At the end of 2021, it valued its shares at 122 million
euros ($120 million), and in March warned the conflict in
Ukraine would see that drop.
Several Western companies and investors have sold their
Russian operations for token sums as part of an exodus of
Western companies.
Sistema President Tagir Sitdekov said Melon Fashion Group
"is growing fast and demonstrating operational excellence", and
said Sistema had the right experience to continue developing the
company.
The deal is expected to complete by the end of 2022, Sistema
and Eastnine said in separate statements.
It is subject to regulatory approvals by Russia's
competition authorities, and will require the greenlight of a
Kremlin commission established earlier this year to govern the
disposal of Russian assets by Western firms.
($1 = 61.70 roubles)
($1 = 1.02 euros)
(Reporting by Jake Cordell, additional reporting by Alexander
Marrow; Editing by Emelia Sithole-Matarise)