Russia's M.Video to spend $350 million on store openings, development
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A customer walks past a display of coffee machines on sale in a store of Russia's biggest electrical and white goods retailer M.video in Moscow, Russia, April 15, 2016. REUTERS/Maxim Zmeyev/File Photo
MOSCOW (Reuters) -Russian consumer electronics retailer M.Video-Eldorado said on Friday it would spend an extra $350 million on store openings, expanding into new cities and growing online sales in the first half of 2025 as it implements its three-year strategy.
Sanctioned state-owned defence sector lender Promsvyazbank is in talks to buy M.Video, the Kommersant and Vedomosti newspapers reported in January, citing sources who said a sale could help M.Video solve growing debt problems and draw a major listed company closer to the Russian state.
Felix Lib, general director of M.Video-Eldorado Group, said the company would undergo changes at all levels of corporate governance, in the board of directors and top management. Information about the new shareholders would be disclosed later, M.Video said.
"The first payments from the new shareholders amounting to 11.5 billion roubles have already been received by the company," Lib said in a statement.
Total investments in March-April to implement the group's long-term development strategy will amount to 30 billion roubles ($350.88 million), he said.
The planned investment is more than M.Video's current market capitalisation of around 21 billion roubles. The company's Moscow-listed shares leapt more than 7% on the announcement.
M.Video, which sells consumer electronics and home appliances at around 1,240 stores across Russia, has been growing its online presence in earnest since the COVID-19 pandemic.
Together with Promsvyazbank, M.Video is in the race to develop online marketplaces in Russia, along with specialist e-commerce companies such as Wildberries and Ozon, internet giant Yandex, and deep-pocketed banks including dominant lender Sberbank.
($1 = 85.5000 roubles)
(Reporting by Olga Popova and Alexander Marrow; Editing by Mark Trevelyan)
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