PPF Ggroup and Igor Yakovlev sign joint venture agreement
PPF Group, a leading international financial group and Russian entrepreneur Igor Yakovlev, have agreed a debt for equity swap enabling PPF Group to acquire a majority stake in Russia’s largest home appliances and electronics retail chain, “Eldorado“. The deal is expected to complete in the 3rd quarter of 2009.
In accordance with the terms of a previous credit agreement with Eldorado, PPF Group is to acquire, for USD 300 million, a controlling stake of, 50% + 1 share, in a joint-venture with Igor Yakovlev. The joint venture will control all tangible and intangible operational assets of the Eldorado retail chain, including the Eldorado brand and its operating trademarks. Additionally, as part of the debt for equity swap, PPF Group, through the joint venture will acquire certain real estate investments, principally comprising Eldorado’s retail premises and other property development projects in Russia from Mr Igor Yakovlev´s portfolio.
The joint venture does not include the operations, assets or liabilities of Eldorado in the Ukraine.
Loan receivables amounting to approximately USD 200 million, collateralized by real estate properties, will remain payable to PPF according to the original credit agreement signed with Eldorado in September 2008.
According to the Shareholders Agreement, PPF Group and Igor Yakovlev will co-manage the joint venture through their representatives on the Board, to which both partners have a right to appoint 2 board directors.
Jiri Smejc, PPF Group’s shareholder said: \"We consider our transaction with Eldorado to be a strategic investment in Russia, a market which we regard as a high priority for the Group. As a co-owner in Eldorado we will initiate further steps to ensure the company’s financial stability and place greater emphasis on its core business activities. Jointly, we will seek to strengthen Eldorado’s leading position in the Russian electronics and domestic appliances market.\"