RUSSIA: US private equity buys into Lenta

By just-food.com | 9 October 2009

US-based private equity groups VTB Capital and TPG Capital have acquired a 35.4% stake in Russian hypermarket group Lenta.

The private equity firms were able to purchase the stake from Lenta founder Oleg Zherebtsov, despite competition from "a number of investors", VTB said today (9 October).

Reports had surfaced as early as last year that Lenta had attracted the attention of various invesment funds as well as trade buyers including Wal-Mart and Carrefour.

Lenta currently operates 36 hypermarkets in Russia. In a statement on the deal, VTB indicated that it hoped to work with Lenta's existing shareholders to develop a strategy for expanding, "especially in the regions".

The investment fund also indicated that it expects to grow shareholder returns by improving operational management and financial control systems.

"We... expect mutually beneficial co-operation aimed at improvement of the operational indicators of the business by bringing in top international experience," Tim Demchenko, global head of private equity and special situations at VTB Capital, said.

According to Russian reports, the stake was sold for between US$110-115m. However, when contacted by just-food, a spokesperson for the investment groups declined to comment on the purchase price.

Sectors: Emerging markets, Retail

Companies: Wal-Mart, Carrefour