OREANDA-NEWS. On July 01, 2008 the European Bank for Reconstruction and Development has raised a long-term loan of USD 200 million to support the planned regional roll-out of new stores by the privately-held Russian stores chain O’KEY, as well as to enable the group to restructure its debt portfolio and strengthen its balance sheet, reported the press-centre of EBRD. 

The structure of the EBRD’s A/B loan secured for the borrower a seven-year maturity with a final 30 percent bullet repayment. The maturity is the same both for the A loan, which the Bank will keep on its own books, and for the syndicated B loan. Such a tenor is a major achievement in present market conditions.

What is vital for a group like O’KEY is to be able to implement its investment plans quickly in order to increase market share in key areas of Russia and by providing support for the group in less favourable market conditions the EBRD is fulfilling its role both as a reliable partner and as a source of long-term funding, said Alain Pilloux, EBRD’s Business group Director for Russia.

To date, EBRD has invested nearly USD 2 billion in over 50 agribusiness projects in Russia and the importance of modern retail projects such as O’KEY’s is that they impose high standards on the producers who want to supply them, Mr. Pilloux said, adding the Bank welcomed the emergence of a supplier base in Russia’s regions and would be actively prepared to support it.

The project, whose total cost is USD 815 million, will enable O’KEY to implement its regional expansion strategy over the next three years, thus contributing to Russia’s economic diversification. This is a key strategic goal for EBRD.

The borrower is O'KEY Group, a Russian group of companies which owns O’KEY’s stores. O’KEY Group, established in 2002, currently employs 8,200 staff across Russia where it operates 28 stores: 19 O’KEY hypermarkets and nine O’KEY Express supermarkets. O’Key sources more then 75 percent of its food-products locally. The O’Key group reported a strong financial performance in 2007 – with revenues growing 90 percent to \\\\$1,2 billion.