OREANDA-NEWS. July 21, 2011. Hi Capital Corporation took more than 20% position in OJSC Pharmacy Chain 36.6.

Hi Capital is a financial investor, who actively invests in pharmaceutical industry. Pharmacy Chain 36.6 shares purchase is its second big deal in the sector this year.

"We have effected a deal on purchasing of non- blocking share package of Pharmacy Chain 36.6, a leader on the pharmaceutical retail market. The current profitability of the chain is at the low level, but there is a positive growth already shown and we believe that the Company will be able to perform at the average pharmaceutical retail level of profitability in the nearest 2—3 years. – said Alexander Zhdanov, Hi Capital Corporation Partner. – We expect an increasing consolidation in the sector in the nearest future which will allow us to enhance significantly our assets value".

Igor Rudinskiy, CIA International General Manager commented as follows: "We have been successfully doing business with Pharmacy Chain 36.6 in the field of medicines deliveries; moreover we have started to implement new forms of cooperation. The proceeds will be directed to the business development".

Sergey Krivosheev, Chairman of OJSC Pharmacy Chain 36.6 Board of Directors said:

"We are happy to welcome a new Company’s shareholder and believe that this deal will increase Pharmacy Chain 36.6 investment attractiveness. An interest to our activity on the part of a professional investor just confirms this fact. This deal is possible to have come true due to the increase of the Company’s efficiency in 2011 and do not affect our business relationships with CIA International. We are developing our cooperation and partnership with one of the first- rate suppliers on the Russian pharmaceutical market".

Hi Capital was established in 2011 as an exclusive consultant of several funds: private equity, mezzanine financing and real estate fund, designed to work in the CIS market with a dynamic company experiencing difficulties in accessing bank credit. Today Hi Capital is engaged in investment projects in the sphere of production and sales of medicines, construction and renovation of real estate, trade, consumer goods and other projects. Under the management of the fund is a pool of transactions totaling more than USD  150 million Target size of funds managed by Hi Capital for 2013 is USD  400 million, major investors are the funds as the Russian institutional and private investors. It is expected that next year, joined by foreign institutional investors.

36.6 is the largest pharmacy chain in Russia and operates a network of 1,000 stores in 29 regions of the country, owns 52% of the production team “Veropharm”. In 2010, revenues were 20.4 billion rubles, and net loss — 432.6 million rubles. In June, network restructured half of its loan portfolio in the Sberbank (granted a loan of 4.15 billion rubles for five years). The Bank received a call option to buy 5% stake in 36.6 in the year on a fixed or at market price. Now the total debt of 36.6 is 9.335 billion rubles (debt/EBITDA of 4.89).

JSC “SIA International Ltd.” — one of the largest Russian pharmaceutical distributors. General Director — Igor Rudinsky. The main activities of the company — sale of drugs, medical devices and pharmaceutical goods to pharmacies and hospitals in Russia. Of all the drugs used for treatment and health of inhabitants of Russia, about a quarter — about 23% — purchased, held in storage and brought to the consumers of this company, SIA said on its website. At the market, the company employs more than 17 years, has 875 suppliers and manufacturers of medicines from around the world, is the owner and co-owner of three Russian plants. The company supplies drugs to more than 28,000 pharmacies and medical institutions in Russia.