Spar Hungary announces €100 million bond issue

Spar Hungary Kft will issue bonds worth €100 million to finance investments, chairman of the board Peter Feiner announced on Wednesday. Half of the five-year bonds will be issued in euros and the other half in forints. The euro bonds will carry 3.75% interest, the forint bonds 7%. Spar plans to spend upwards of Ft 10 bln a year over the next 3-5 years to open 15-20 supermarkets and 3-5 hypermarkets each year. It aims to have 35-40 hypermarkets and 200-250 supermarkets in Hungary by the end of the period. The company also plans to spend Ft 5 bln-10 bln to expand its meat processing plant and logistics centre, Feiner said. The lead manager for the bond issue is Investkredit Bank AG, a member of Austria's Volksbank group. Spar Hungary's parent company Austria Spar International will guarantee repayment of the bonds. The bonds will be available for subscription between November 25 and December 1, and they will then be floated on the Vienna and Budapest stock exchanges. The bonds, targeted at institutional and private investors, will have nominal value of Ft 300,000 and €1,000. Spar had 18 Interspar hypermarkets, 113 Spar supermarkets and 22 Kaisers supermarkets in Hungary at the end of last year. It employs 8,600 people. The company had sales revenue of Ft 184.42 bln in 2004, 26.1% more than a year earlier. This year, Spar Hungary expects revenue of Ft 200 bln.