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RUSSIA

Gambling Billionaire Seeks $1.5Bln

Oleg Boiko, who controls Eastern Europe's largest gaming company, said his businesses planned to raise $1.5 billion this year to fund expansion in gambling, retail and real estate.

Ritzio Entertainment Group will seek $500 million to buy gaming chains in Europe and Latin America, while the Finstar holding company will look for $1 billion of new funds to bolster its store chains and property unit, Boiko said in a recent interview. The money will be raised through loans, bond sales and investment by individuals, he said.

Ritzio wants to open gaming halls outside Russia, where the government is confining gambling to four regions beyond the nation's main cities in July 2009. The company will sell shares in London when markets permit, said Boiko, whose Finstar is adding to its property and retail units as a 10th straight year of economic growth fuels Russian incomes.

"Foreign gaming outlets are showing quite high sales growth and also high profitability," said Boiko, who is ranked the country's 65th-richest man by Forbes magazine, with an estimated wealth of $1.5 billion. "In Russia there is more money, incomes are rising very fast and there is low competition, especially in food retailing industry."

Cyprus-based Ritzio last month added slot-machine halls in Serbia, its 15th country, and may open in Spain and some former Soviet states, such as Moldova and Kyrgyzstan, said Boiko, who owns around three-quarters of the company. It is also studying Japan and aims to expand in the Czech Republic, Romania, Columbia and Ukraine.

Germany, where Ritzio has 160 gaming clubs, and Italy also are targeted for acquisitions. In both countries, the three main operators control less than 5 percent of the market, Boiko said.

Russian gaming sales more than quadrupled to 185 billion rubles ($7.95 billion) in the six years through 2006, according to the Russian Union of Industrialists and Entrepreneurs. Ritzio has more than 1,000 outlets from casinos to bars, 400 of which are in Russia.

"All gaming companies are looking at Western and Eastern Europe because they are not sure what will happen to the gaming business in Russia and what returns they may get from operations in one of the four zones," said Julia Gordeyeva, an analyst at ING Bank.

Ritzio, whose chains include Vulcan, Million and X-Time, plans an initial public offering "as soon as the market's condition allows" and will seek $300 million to $400 million in a sale if it is held next year, Boiko said.

The company's international unit sold $280 million of notes last year to help fund expansion outside Russia.

Boiko, who said he started earning money by teaching karate in high school, opened his first Olbi Diplomat stores in Moscow in the early 1990s, selling goods to diplomats and foreigners for foreign currency. He co-founded Evraz Group, now the country's second-largest steelmaker, in 1999 and was its chairman until selling his holdings in 2004.

After graduating from the Moscow Aviation Institute with a degree in radio electronics, he began expanding Ritzio with partners in 2002 after buying a stake in the Vulcan chain. The billionaire owns almost all of Finstar and controls more than 75 percent of Ritzio.

(The Moscow Times 12.v.08)

 
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