VILNIUS - A subsidiary of Citigroup has agreed to inject an additional 10 million euros in Iki, Lithuania's second largest grocery store, bringing its total investment in the retail chain to 50 million euros.
Iki announced that Citigroup Venture Capital International, a private equity investment unit of Citigroup, would buy both outstanding and newly issued stock in Palink, the operator of Iki supermarkets, Ikiukas convenience stores and Leader Price discount stores in Lithuania and Latvia.
The deal is one of the largest private equity investments in the Baltic countries and one of the largest in the retail sector in Central and Eastern Europe, according to the statement from Iki.
The Ortiz brothers, who are from Belgium, will retain a controlling stake in Palink after the stock purchase.
Amber Trust, an equity fund managed by Danske Capital Finland and Firebird, has reportedly co-invested 7.5 million euros in Iki along with Citigroup.
Palink will use the money to further expand its retail operations in Lithuania and Latvia. In April, it signed an agreement with the French Casino Group to create a chain of Leader Price discount stores in the Baltics. The first Leader Price store opened in Lithuania in May. The chain has since expanded to 53 stores in Lithuania and Latvia.
Iki, which in the past has been less transparent than its competitors, earlier this month reported sales of 279 million euros for the first nine months of the year. Compared with the second quarter, sales were up 4.4 percent.
"Sales have been increasing every quarter, despite strengthening competition," Aidas Mackevicius, CEO of Palink, said in a statement, adding that rising energy prices and heavier borrowing have had an negative impact on potential sales growth.
The chain entered the Latvian market in the summer of this year when it opened its first Iki in Riga. The company intends to open six more such supermarkets and 11 Leader Price discount stores in Latvia by the end of this year.
Previously Palink owned four stores in Latvia, but none of them operated under the Iki brand name. It took over the stores 's three in Jelgava and one in Riga 's from a local company.
In the long-term Palink wants to establish two chains in Latvia 's the Iki supermarkets and Leader Price discount stores.
Currently, Palink owns 145 stores in the two Baltic countries and employs a workforce of around 6,000.