STAR BOLSTERING POSITIONS BY NEW AGREEMENT WITH EBRD

ArmInfo
2009-11-25 16:27:00

ArmInfo. STAR Company, the biggest retailer in Armenia, is going
to open another two supermarkets in Yerevan on USD 5.5 million loan
facility from the European Bank for Reconstruction and Development
(EBRD), STAR Executive Director Vahan Kerobyan said in a press
conference on Wednesday on occasion of the facility agreement with
the EBRD.

V. Kerobyan said STAR will receive the loan in December 2009. USD 3.5
million of total USD 5.5 million will be provided in terms of the loan
to be repaid within 7 years with a two-year grace period. Another
USD 1.434 million will be invested in equity capital with a right
of repurchase in a year, and USD 566,000 as a capital provision
through conversion of the corporate bonds acquired by the EBRD a
year ago into shares. "Thus, we will receive USD 4.934 million of
the total loan in cash," he said. V. Kerobyan mentioned that last
year STAR issued convertible corporate bonds in the amount of USD
3.161 million which were acquired by the EBRD. The shareholders of
STAR Company with the statutory capital of USD 12 million are Henrik
Zakharyan, private businessman (71.7%) and EBRD (28.3%). The credit
facility agreement signed on November 24 will increase EBRD’s share
in the company that will be back to the current level in a year after
exercising the option.

V. Kerobyan said that the facility agreement is another step by STAR
towards network restructuring project launched in the middle of
the year. "Starting July we have been working to enhance activity
of STAR as regards spending, first of all. Now, we are focusing on
fulfillment of the best requests by our customers. We have a number
of projects aimed to extend the assortment of products, to develop
more aggressive pricing and improve quality of services," Kerobyan
said. Thanks to the credit facility, the company is going to replenish
circulating assets that will promote profitability of the network, and
allow opening another two supermarkets in Yerevan (Kentron and Arabkir
communities), as well as fulfill the liabilities to suppliers of goods.

For his part, Valeriy Razlog, the head of the EBRD office in Yerevan,
said the EBRD strives to support all its partner-companies including
those who have faced market challenges of the financial and economic
crisis. The bank supports its partners proceeding from certain
factors. In the case of STAR, V. Razlog said that EBRD approved the
loan to STAR considering several positive factors: developed retail
business, highly qualified management and good plan of business
restructuring. STAR network of supermarkets founded in 1998 comprises
13 supermarkets (12 in Yerevan, 1 – Hrazdan).