Lenta Ltd., the Russian retailer backed by U.S. buyout firm TPG Capital, plans to raise money for store expansion as part of a share offering worth as much as $300 million.
About $150 million of new stock will be sold by the St. Petersburg-based company. Separately, the retailer’s co-owner, the European Bank for Reconstruction & Development, plans to sell $100 million to $150 million of shares, Lenta said.
The grocer is seeking to capitalize on improving market conditions after global investors reduced their appetite for Russia this year. As large food retailers continue to boost sales and expand market share amid a recession, Lenta’s $225 million offering in March and Magnit PJSC’s $143 million offering in February have been among Russia’s largest this year.
“The market environment has stabilized,” said Vadim Bit-Avragim, a money manager at Kapital Asset Management LLC in Moscow, which doesn’t hold Lenta shares. “If Lenta invests the cash from its equity sale into growth, that’s good news.”
Lenta has posted the fastest sales growth among publicly-traded Russian retailers this year. It said Tuesday that it plans to open at least 40 new hypermarkets next year, up from a previous target of 32.
Credit Suisse Group AG, JPMorgan Chase & Co. and VTB Capital are managing the sale.