Moscow, Oct 29 - Russian food retailer Magnit said on Wednesday it had secured a 2.5 billion rouble ($91 million) credit line from state-controlled bank VTB as part of Moscow's rescue package for key economic sectors.
"Of that, 0.3 billion roubles have already reached the company," Magnit said in a statement.
Russia has launched a wide-ranging rescue plan for the economy and financial markets, worth more than $200 billion. VTB and Sberbank have been entrusted with helping retailers refinance short-term debts.
Industry sources told Reuters on Monday that Magnit and other food retailers have asked state banks for a total of 50 billion roubles in loans.
VTB said on Wednesday it was examining more than 18 billion roubles in applications from leading retailers in addition to the credit line it opened for Magnit.
Magnit also said in a separate statement for investors that it planned to attract a $250 million, three-year loan from a pool of foreign banks involving BNP Paribas, Commerzbank, ING, Royal Bank of Scotland and Banque Societe Generale Vostok.
The deal, which has yet to be approved at an extraordinary shareholder meeting on Nov. 5, will pay a margin of 4 percent over LIBOR.
The two deals add to a nearly $200 million facility Magnit had agreed on with Sberbank to refinance short-term debts.
Magnit, which prides itself on low prices, had a total of 2,405 shops in more than 800 Russian towns by end-September, making it Russia's largest retailer by number of shops.
STRONG RESULTS
"As far as liquidity is concerned we have sufficient margins plus the government support for retail chains. All that will help us retain the high development pace," Sergei Galitskiy, Magnit's chief executive and main shareholder, was quoted as saying in Magnit's results announcement on Wednesday.
The company's net income surged 98 percent year-on-year in the first nine months of 2008 to $118.9 million, while revenues jumped 51 percent to $3.88 billion.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 97.1 percent to $265.3 million, and the EBITDA margin improved to 6.8 percent from 5.2 percent.
Galitskiy, who controls 51 percent of the company, earlier told Reuters in an interview core profit at Magnit would rise by up to 80 percent in 2008 and that he saw further sales growth despite the financial crisis.
The value of Russia's food market grew 32 percent last year to $191 billion, or $1,330 per capita, as more affluent Russians look for higher-quality goods in Western-style stores.
However retailers, like other Russian companies, have been hit by the global credit crunch which has left many struggling to refinance maturing foreign debts.