The European Bank for Reconstruction and Development has acquired a stake of over 25% in a group running Belarus’ largest chain of supermarkets specializing in children’s goods, West Ost Union Commercial Industrial Group JLLC.
This is the first time the EBRD is taking a stake in the country’s retail sector and it represents the Bank’s third equity investment in Belarus in the last 10 years. The EBRD views retail commerce as vital to the development of a successful market economy.
West Ost Union (WOU), founded in 2006, runs a growing retail chain of 12 modern supermarkets spread throughout the country under the trademark Buslik, which means little stork in Belarussian.
WOU supermarkets operate in the capital Minsk, key cities such as Gomel, Brest and Mogilev, as well as other smaller regional centers. The EBRD investment will provide the company with working capital, and also marks an important step in the realization of the group’s expansion plans. WOU wants to have a chain of up to 25 stores by 2013.
Buslik’s regional expansion into regions will benefit consumers through a network of stores offering a wide mix of goods, both local and imported, at competitive prices and targeting middle-income families, said EBRD Senior Banker Irena Stanwell at the signing. The company management's strong track record and commitment to good corporate governance principles played a key role in the EBRD decision to make this investment, Stanwell added.
“This financing is very important because it will support our expansion plans. We are aiming to keep our strong customer service focus and react to changes such as the entry of strategic players into the market,” said Sergey Misiachenko, WOU’s director-general, stressing that the group wanted to strengthen its position as a leader in the retail sector.
The Buslik stores aim to provide everything children need from the time they are born to just before they become teenagers. This includes baby food, clothes, footwear, toys and nappies.
The EBRD’s 25.5% stake will entitle the Bank to representation on the group’s board of directors. Financial details of the transaction were not disclosed. (press release)