Food retailer Magnit set for $500 mln SPO in autumn

Russian grocery store chain Magnit is considering holding a secondary public offering (SPO) in fall 2011 to raise at least $500 million to finance its investment program, Kommersant business daily reported on Monday.
Magnit, which has the largest number of retail outlets in Russia, has unveiled the most ambitious retail business investment program in the country.
The grocer intends to invest $1.8 billion to open 800 convenience stores, about 200 drug stores under the Magnit Cosmetic brand and 50 hypermarkets in 2011, the paper said.
Magnit’s aggressive development strategy has prompted the company to resort to new borrowing as the grocer registered a negative free cash flow of $790.5 million last year.
As a result, the company’s net debt/EBITDA ratio reached 1.4 at the end of 2010 as com…

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