OAO Magnit (MGNT), Russia's second-largest supermarket chain, said it will sell 11.3 million shares to fund expansion in its home market.
That would raise 13.1 billion rubles ($531 million) at yesterday's closing price of 1,163.60 rubles on the Micex Stock Exchange. Magnit said last month it would hire Deutsche Bank AG (DBK) and Morgan Stanley (MS:US) to underwrite the sale. The board approved the sale yesterday, the Krasnodar, Russia-based company said today in an e-mailed statement.
Magnit may spend more than $500 million this year building shops, adding discount outlets and developing a superstore chain, Oleg Goncharov, head of investor relations, said in November. Russia's 10th straight year of economic growth is spreading prosperity to smaller cities, increasing the number of people who can afford to shop at branded chains instead of open- air food markets.
The shares may be listed in Russia, on a foreign exchange or both, the food retailer has said. Goncharov declined to comment today on when the sale would take place.
Magnit first sold shares to the public in April 2006 for 667 rubles apiece. The shares have almost doubled since.
Moscow-based X5 Retail Group NV (FIVE) is Russia's largest grocery-store chain.
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