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. Last Updated: 07/27/2016

Yevroset Plans $500M Share Offering in 2008

Mobile phone retailer Yevroset confirmed Tuesday that it aimed to sell around 20 percent of its shares in a Moscow initial public offering planned for 2008.

Yevroset, which has been planning an IPO since 2003, will be seeking from $400 million to $500 million in the float, company spokesman Ochir Mandzhikov said Tuesday.

The company may also later seek a London listing for its shares.

"Money raised through the IPO will be spent on expansion projects, such as building standard trading outlets and also for debt restructuring," Mandzhikov said in e-mailed comments.

Yevroset CEO Yevgeny Chichvarkin said at the Russian Economic Forum in London on Tuesday that the company would seek to increase sales by 20 percent this year because of demand for handsets, including lending.

The country's retail market has increased to $360 billion this year from $84 billion in 2000 and will grow to $500 billion in 2010, Chichvarkin said during the conference.

"The market is growing like mad,'' Chichvarkin said.

But analysts pointed out that the saturated mobile phone market could make it hard for Yevroset to increase sales, a necessary condition for a successful IPO next year.

"Yevroset is in odd situation at the moment because it needs to raise company capitalization to $2 billion to make it attractive to investors," said Yelena Bazhenova, an analyst for MDM Bank. "With mobile market penetration at 115 percent, Yevroset will have to explore new sources of growth in order to meet that target."

Yevroset has grown over the years to become the country's biggest mobile phone retailer, selling 12.1 million mobile handsets by the first quarter of 2007.

To buttress its profit base and make the company more attractive to investors, Yevroset has also turned its hand to other lines of business.

Yevroset signed an agreement with Sky Express Airlines last week that will allow the airline's customers to pay for tickets reserved online in any Yevroset retail outlet.

n Russkiye Fondy investment group said it was completing negotiations to acquire 40 percent of mobile phone retail chain Tsifrograd, Kommersant reported Tuesday.

The investment group plans to merge mobile phone retail chains Tsifrograd and, Russkiye Fondy spokesman Vladimir Volpert told the newspaper. Russkiye Fondy acquired a 50 percent stake in in December.