Russian retailer X5 today (13 April) confirmed that its supervisory board has approved plans to raise US$1bn through a secondary public offering of ordinary shares.

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X5, Russia’s largest retailer in terms of sales, said the capital raised would be used to fund the retailer’s aggressive expansion plans.


“The secondary offering of our shares is one of the instruments we are planning to use during this year to raise additional capital to finance the potential acquisition of Karusel hypermarket chain exercisable from 1 January 2008 and our aggressive organic growth,” CEO Lev Khasis said.


“We are delighted with the strong support of our objectives and investment plans from our major shareholders and supervisory board members who unanimously approved the business and financial strategy proposed by the management,” Khasis added.


X5 operates the Pyaterochka and Perekrestock chains. The acquisition of Karusel would facilitate the group’s speedy expansion in the booming Russian hypermarket sector. With 19 hypermarkets, Karusel plans to open 25 stores this year and up to 50 by 2009. X5 itself hopes to open 70 new hypermarkets in the next five to seven years

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Russian retail analysts have speculated that the capital raised might also be used to purchase other acquisition targets, including supermarket chain Kopeika and hypermarket operator Ramstore.


“They are looking for growth opportunities beyond Karusel and have expressed interest in Kopeika and Ramstore,” Natasha Zagvozdina, an analyst with Renaissance Capital in Moscow, told just-food earlier this week.