Making good on a deal reached with Russian billionaire Igor Yakovlev last February, PPF Group recently announced it has completed a transaction which gives them a controlling stake of Eldorado, the Russian electronics and appliance giant. The deal results in Eldorado being managed as a joint venture with both PPF and Yakovlev appointing two members to the Board of Directors. Eldorado’s Ukraine operations are excluded from the joint venture agreement.
PPF Group acquired 50% plus one share of Eldorado for USD 300 million, through a debt/equity swap with Yakovlev. The firm has also secured USD 500 million in additional funding which will be dedicated to the future expansion of Eldorado. For his part, Mr. Yakovlev added some of his own real estate holdings to the deal, most of which were retail locations Eldorado currently occupies.
Eldorado was established in 1994 as a retailer of household appliances and consumer electronics. It is now the largest such retailer in Russian with 1100 stores and 460 mobile shops operating under the Eldorado and ETO brands.
It currently boasts of controlling 28% of the consumer electronics market for all of Russia and Ukraine, and even claims an 80% market share in some cities. In addition to smaller outlets, Eldorado does have some hypermarkets carrying major appliances such as refrigerators, washing machines, etc.
In addition, Eldorado’s web portal was ranked the number one online home electronics and appliance retailer for the first two months of 2009. The site has seen an increase in traffic of about 60% compared to the same period last year.
PPF Group (www.ppf.cz)
PPF group was established in 1991 in the Czech Republic and has since grown into one of the largest investment groups in CEE.
Based in Amsterdam, PPF Group is a financial services company active in private and commercial banking in Central & Eastern Europe, Russia, the CIS, and Asia. Additionally PPF makes private equity and real estate investments. Strategic investments are carried out by the group’s holding company PPF Group N.V., also based in Amsterdam. In addition to the company’s full ownership of Home Credit B.V., it’s also part owner of JV Generali PPF Holding, PPF banka a.s., and PPF a.s.