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Clifford Chance advises Russian grocery retailer Magnit on US$350 million international offering of ordinary equity

20 January 2012

Clifford Chance advises Russian grocery retailer Magnit on US$350 million international offering of ordinary equity

Clifford Chance's Moscow and London offices recently advised Morgan Stanley International and VTB Capital, as joint global coordinators and joint bookrunners, in connection with the approximately US$350 million accelerated bookbuilt placing of ordinary shares of Russian grocery retailer Open Joint Stock Company Magnit to Russian and international institutional investors, and a related open subscription offering of newly issued ordinary shares by Magnit to existing shareholders. 

Based in Krasnodar, in the Southern region of Russia, Magnit is one of the largest food retailers in Russia (by number of stores and revenues) with approximately 4,600 convenience stores, more than 75 hypermarkets and almost 100 cosmetics stores located in more than 1,300 locations in the Russian Federation as of 30 September 2011.  Magnit's global depositary receipts (GDRs) were admitted to the official list of the Financial Services Authority and to trading on the London Stock Exchange's regulated market in April 2008, in a transaction in which Clifford Chance advised the company.

The closing of the sale of new ordinary shares in the global offering took place on 15 December 2011.  Magnit intends to use the net proceeds it receives from the issuance of its new ordinary shares (including from the accelerated bookbuilt placing) to finance its capital expenditure programme aimed at the further expansion of its chain of hypermarkets as well as the expansion of its convenience store operations and further development of its logistics capabilities. 

Chris Walton, US Securities partner involved in the transaction said:

"Our work on this transaction concluded a challenging but successful year for the Russian equity capital markets team, following our involvement in the IPOs of NOMOS, Phosagro and Polymetal earlier in the year. We are pleased that our Russian ECM practice in London and Moscow has continued to execute large and important transactions, in spite of the difficult conditions in the market."

The Clifford Chance team was led by Vladimir Zotov (Counsel - Moscow) and included Ramil Fayziev (Associate - Moscow), with U.S. securities advice provided by Chris Walton (Partner – London) and Nikolai Mikhailov (US counsel – London) and English law advice provided by Adrian Cartwright (Partner – London) and Mark Bell (Senior associate - London).