Euroopt owners are looking for buyers of Eurobonds worth $350 mln

Eurotorg, which owns the largest chain of stores in Belarus, Euroopt, plans to issue the first corporate Eurobonds in the country's history. This is reported by the Financial Times, citing an informed source.

According to the publication, Eurotorg plans to issue Eurobonds for $350 million for a period of 5 years. JP Morgan and Russian banks Sberbank and Renaissance Capital have been announced as joint organizers of the deal.

Investor meetings will start on October 10 in Europe and the US , two banking sources told REUTERS.

The international rating agencies Standard&Poor's and Fitch have already assigned credit ratings to the new issue of Eurobonds.

Fitch has assigned a provisional credit rating to Eurotorg's bonds at 'B-'. According to the agency, the issue of Eurobonds is planned to be carried out in the format of Loan Participation Notes (LPN). The securities will be issued by an intermediary. For these purposes, the Bonitron Designated Activity Company was registered in Ireland in August. “The activities of this legal entity will be limited to the issuance of bonds and the provision of a loan to Eurotorg,” Fitch said in a statement.

S&P also assigned a provisional credit rating of 'B-'. According to the agency, the preliminary rating reflects the risks associated with Eurotorg. In particular, most of the company's borrowings are denominated in foreign currency, while income is denominated in Belarusian rubles. In addition, the ratings of Eurotorg are limited by "very high country risks and the weak efficiency of the Belarusian economy." At the same time, according to the agency's analysts, Eurotorg's solvency is positively affected by the company's leading position - Euroopt's market share is greater than the positions of its five competitors combined. The refinancing will allow the retailer to extend maturities and provide a cushion of liquidity in the face of heightened risk of unexpected currency fluctuations, the agency said.

In the spring, Eurotorg announced that the company had agreed with the largest creditors - Sberbank of RUSSIA and Russian Alfa-Bank - to refinance its obligations. The banks provided the company with “comfortable loan repayment schedules until 2022-23.” “In accordance with our plans, by January 1, 2018, the debt to banks will amount to about $580 million,” said Andrey Zubkov, general DIRECTOR of Eurotorg.

According to the balance sheet of Eurotorg, the company's revenue in 2016 amounted to 3.6 billion rubles without VAT, an increase of 18% compared to 2015. However, the profitability of the largest retail chain, which is controlled by Sergey Litvin and Vladimir Vasilko, decreased from 36.5 million to 22.6 million rubles in 2016.

A source in financial circles told TUT.BY that after “Belarus placed $1.4 billion worth of sovereign Eurobonds in the summer, it is quite logical that “corporates” will also try their luck. He noted that Eurotorg "has long been hatching plans to enter foreign capital markets, but so far has not reached the final goal." “There were talks about an IPO, and an entry into IFC capital was announced ... Now there is hope that everything will grow together,” the source said.

Eurotorg declined to comment.