PRESS: Russia’s Svyaznoy owner Malis said to swap Explay for Fly

MOSCOW, Dec 22 (PRIME) -- Russian businessman Oleg Malis, owning handset retailer Svyaznoy, will exchange portable electronics maker Explay for a 20–30% stake in U.K. smartphone producer Fly, business daily Vedomosti reported Tuesday, referring to several sources.

One of the sources said that Malis or Svyaznoy can get the stake in Fly, which is owned by the U.K.’s Meridian Group.

The deal is still being formalized, but Malis is supposed to receive a stake in Fly indirectly, via a new firm, which will be handed over shares of the smartphone maker, one of the sources said. Malis will pay for his interest with Explay, which is a part of the Svyaznoy group, the people familiar with the matter said.

According to handset retailer Euroset, Fly occupied 6–10% of the Russian smartphone market in natural terms and 3–4% in monetary terms in January–November. The whole Russian market of smartphones in January–September was estimated by Euroset at 4.2 million devices and 37 billion rubles.

In April, Explay’s market share was at 6%, but then it started decreasing, according to Euroset. One of the sources explained the dynamics by a lack of working capital. The company duly closed a 1.5 billion ruble loan at the beginning of 2015, but failed to get another one due to the change of owners of Svyaznoy.

Meridian Group does not disclose its financial or operating results. According to The Economic Times, its revenue was at U.S. $130 million–$140 million in 2010. Explay’s revenue soared 34% in 2014 to 12.9 billion rubles.

(71.2553 rubles – U.S. $1)

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