OREANDA-NEWS. September 24, 2007. X5 Retail Group N.V. (the “Group”), Russia's largest food retailer in terms of sales announces that it does not now expect to undertake a Secondary Offering this year.

The X5 Group Supervisory Board supported management’s view on the Secondary Offering. The Board will request the EGM of the Group’s shareholders to delegate to the Supervisory Board the right to decide on the issue of up to US$ 1 billion in new equity during 2008.

Lev Khasis, Group CEO, commented:

“X5 Group intends to pursue a diversified financing strategy and a secondary equity offering remains an option in the future. Nevertheless, there is no compelling reason for us to launch a Secondary Offering now, as we have the resources available to finance previously reported expansion plans approved by the Supervisory Board. The strong dynamics in EBITDA and net income growth gives additional confidence in the Group’s ability to fund organic growth and potential M&As without resorting to a Secondary Offering in a near term future.”

Also today X5 Group announces the appointment of a second independent member of the Supervisory Board, Mr Carlos Criado-Perez.  Mr Criado-Perez is the Executive President of Spanish retail chain Dinosol Supermercados and has previously been Chief Executive Officer of U.K. supermarket chain Safeway plc (1999-2004) and Chief Operating Officer of Wal-Mart International (1998-1999).

Lev Khasis commented:

“The appointment of a second independent director of the Group’s Supervisory Board will no doubt reinforce the investor community confidence in our compliance with best international standards of corporate governance. Also, as the primary focus of our further activities is the consolidation of the segmented Russian retail market, we hope that attracting such a highly qualified professional of international level will allow us to successfully accomplish our aggressive expansion plans in the Russian market.”

As of 30 June 2007, franchisees operated 591 Pyaterochka branded stores across Russia and Kazakhstan. Perekrestok had 10 stores operated by franchisees in the Moscow area.  

Pyaterochka and Perekrestok have merged their operations as of 18 May 2006 to create the leading company in the Russian food retail market by sales.  

The Group’s Net sales for the 1H 2007 were US$ 2,348 million, up +49% vs. 1H 2006. Pyaterochka chain provided US$ 1,306 million of net sales; the Perekrestok chain contributed US$ 1,042 million of net sales.