Eurotorg Announces the Intention to Publish Registration Document and Expected Intention to Float on London Stock Exchange

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Eurotorg Holding Plc (the “Company”, and together with its consolidated subsidiaries, “Eurotorg” or the “Group”), the largest grocery retailer in Belarus, announces that it intends to publish a Registration Document today, and that it expects to announce its intention to float on the London Stock Exchange on or around 11 October.

Eurotorg CEO Andrei Zubkou said:

“Eurotorg is the undisputed leader in the Belarusian grocery retail market, and a pioneer in the nationwide roll-out of modern retail formats and online grocery shopping. This announcement follows on from our successful debut Eurobond issuance in October 2017, when we effectively opened international capital markets for Belarussian corporate issuers.

“Eurotorg today is at an exciting point in its development. We are the market leader in Belarus by any possible measure of comparison – be it market share, number of stores, selling space, geographical coverage, brand awareness or customer loyalty. And we are continuing to grow apace, pursuing our strategic focus on smaller towns and villages where people previously had no access to modern format grocery retail, all while maintaining healthy levels of profitability. Our asset-light capex programme gives us the flexibility we need to move quickly and seize opportunities where we see them – we opened 127 new grocery stores in the first half of this year alone. This new strategy has allowed us to increase our ROIC, which stood at 29% as of the end of 1H 2018.

“Modern format grocery retail has taken root in Belarus but retains plenty of potential for further growth, given current market penetration of 46% – similar to where Poland was more than a decade ago. We are also excited by the potential of the online grocery retail market, which is forecast to grow at 35% CAGR for the next five years and where we enjoy 98% market share. We believe that now is the time for Eurotorg’s exciting growth story to become better known among international investment audiences.

“Belarus is increasingly open to international investors, and placed 38th out of 190 countries in the World Bank’s Ease of Doing Business rankings in 2018, ahead of countries including Italy, Belgium and Turkey. The macro environment is stable, thanks to prudent monetary and fiscal policy and a focus on liberalisation. Inflation is at multiple-year lows, while GDP growth reached 4.5% in the first half of 2018. We believe that the Belarusian economy is on a path for growth, and that this favourable macroeconomic environment will support Eurotorg’s performance going forward.”

Expected offering highlights

• The Offering is expected to consist of Global Depositary Receipts (the “GDRs”) representing interests in ordinary shares (the “Shares”).

• The Company is expected to apply for listing and trading of the GDRs by way of admission to the standard segment of the Official List of the UK Financial Conduct Authority and trading on the London Stock Exchange.

• The Offering is expected to raise approximately USD 200 mn in primary proceeds to the Company, and also to include a secondary component of GDRs offered by the Company’s core shareholders: Uladzimir Vasilko, Sergey Litvin, Aleksander Litvin and Andrei Zubkou.

• The Company intends to use the net proceeds to partially repay the Group’s foreign-currency debt, in line with its strategic objective of reducing its foreign-currency debt exposure. Pro-forma the anticipated proceeds of the Offering, the Company expects that the Group’s ratio of net debt to LTM Adjusted EBITDA as of 30 June 2018 will decline to below 2.0x.

• The core shareholders are expected to retain a majority shareholding in the Company following the completion of the Offering.

• The Offering is expected to consist of (i) a placement to qualified institutional buyers in the United States under Rule 144А and (ii) a placement to institutional investors outside the United States under Regulation S.

• Credit Suisse and J.P. Morgan are acting as Joint Global Coordinators. Bank of America Merrill Lynch, Renaissance Capital, Sova Capital, UBS and WOOD & Company are acting as Joint Bookrunners.