Oleg Boyko, the Russian billionaire who controls eastern Europe’s largest gaming company, said his businesses plan 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, Boyko, 43, said in an April 29 interview in Moscow. 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, according to Boyko, 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 Boyko, who is ranked Russia’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, according to Boyko, who owns about three-quarters of the company. It’s also studying Japan and aims to expand in the Czech Republic, Romania, Columbia and Ukraine, the billionaire said.

IPO Plans

Germany, where Ritzio has 160 gaming clubs, and Italy also are targeted for acquisitions. In both nations, the three main operators control less than 5 percent of the market, Boyko said.
President Vladimir Putin is forcing Russian casinos out of Moscow and St. Petersburg to curb gambling. Russian gaming sales more than quadrupled to 185 billion rubles ($7.8 billion) in the six years through 2006, according to Industrialists and Entrepreneurs Union figures. 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,” Julia Gordeyeva, an analyst at ING Bank in Moscow, said in a telephone interview.
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 between $300 million and $400 million in a sale if it’s held next year, Boyko said.

“Competitive Advantages”

The company’s international unit sold $280 million of notes last year to help fund expansion outside Russia. “We have a lot of competitive advantages such as international expertise and reputation, access to financial resources and high level of management,” Boyko said.  Bokyo co-founded Evraz Group SA, now Russia’s second-largest steelmaker, in 1999 and was the company’s 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, with individual investors holding the rest.
Ritzio’s revenue rose 41 percent to $1.6 billion in 2007, generating more than half of Finstar’s $2 billion total sales. Those figures may increase this year to $1.75 billion and $3 billion, respectively, according to company forecasts. Finstar aims to build up its retail and property interests to more than half of revenue to reduce its dependence on gambling, the billionaire said, without giving a timescale.

Supermarkets, Cosmetics

The holding company will use new funds to open supermarkets and hypermarkets in Russia, Belarus and Ukraine, and expand a personal-care store chain in Kazakhstan and the Uvelux jewelry chain in Russia, according to the executive.
Finstar also plans to develop Rive Gauche, the largest cosmetics retailer in the St. Petersburg region, and may open stores in eastern European countries outside Russia, Boyko said.
The company’s real estate unit has 24 shopping malls under construction and aims to triple its projects’ space to 2 million square meters (21.5 million square feet) by 2011. “There seems to be a lot of malls in construction, but not all developers will meet deadlines because of the liquidity crisis,” Boyko said. “We don’t have problems with that, and may take over some of the projects.”
Boyko, who said he earned his first 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.