VTB Bank has launched its retail funding actions within the State Retail Chain Support Program. On 27 October 2008, "Magnit" Group received the first tranche amounting to RUR 300 million.
Totally, the Magnit chain of retail stores is expected to get about RUR 2.5 billion to be channeled into its working capital.
"I'd like to highlight VTB prompt decision-making and highly professional approach to implementing this project which, I hope, will be a good start for our mutually reinforcing strategic partnership," said Khachatur Pambukhchan, Financial Director of Magnet Group.
Aiming to develop business with this industry, VTB has presently a pipeline of about RUR 18 billion financing requests from the leading retail companies, including X5 Retail Group, The Seventh Continent, DIXY, Lenta, Holiday, Kopeika, and Patterson. Interest rate under the loans to be made to these companies will average 18 per cent.
OJSC "Magnit" is a holding company for the "Magnit" chain of retail stores located in Krasnodar and is a leading food distributor in Russia. As of 30 June 2008, the "Magnit" chain included 2,312 stores and 9 hypermarkets in more than 760 towns of Russia.
About two thirds of the Company's stores are operating in towns with population under 500 thousand. Most of the stores are located in the South, Central and Privolzhsky Federal Constituencies. Some of the "Magnit" stores were also opened in the North-West and the Ural Federal Constituencies.
OJSC "Magnit" has set up its own logistics system, which as of 30 June 2008 consisted of 8 distribution centers, automated stock replenishment system and its own fleet of 1,030 vehicles.
According to the Company's audited consolidated financial statements prepared under the IFRS, its net sales in H1 2008 amounted to USD 2,470 million and the EBITDA - to USD 158 million.