Eurotorg, the largest grocery retailer in Belarus with a market share of 19 per cent in 2017, has formally announced its intention to launch an initial public offering (IPO) on the London Stock Exchange (LSE). The retailer is offering a combination of primary and secondary proceeds. It expects to raise approximately 200 million US dollars in primary proceeds, and the total offering is

expected to top 300 million US dollars.

“Today’s announcement of our intention to proceed to IPO represents another milestone in the history of Eurotorg,” said CEO Andrei Zubkou.

Eurotorg operates 627 stores in 225 towns and cities across Belarus. In 2018, the group launched a chain of pharmacies, which are currently being opened at select locations adjacent to existing grocery stores or transport hubs, leveraging the strong access to customers; 38 pharmacies, under the Magia brand, were opened in the first half of the year.

Complementing Eurotorg’s store-based retail operations are its market-leading online grocery retail sites, E-dostavka.by and Gipermall.by. The company believes that online operations have significant further growth potential and expects them to grow at an accelerated pace compared to its store-based operations.

In total, Eurotorg grew revenue in the first half of 2018 by 9.6 per cent year-on-year in US dollar terms, to 1.1 billion US dollars. The retailer intends to use the net proceeds of the IPO to partially repay its foreign-currency debt, in line with its strategic objective of reducing its foreign-currency debt exposure.

The Belarusian grocery retail market still has a plenty of room for growth. The sector was worth approximately 11.4 billion US dollars in 2017. Penetration of modern retail formats stands at just 46 per cent, considerably below most other emerging markets and broadly corresponding to levels of modern retail penetration in Russia in 2007 and Poland in 2006.