Eldorado’s Vice President says DSG International might refuse to buy a share for fear of Russian market’s political and economic risks

DSG International (formerly known as Dixons) Board of Directors decided to waive the option they had of buying a share in Eldorado, a retail chain dealing in consumer electronics and home appliances.

'We’ve learned a lot about the company and the market it’s operating on. Our Board came to a conclusion that it’s not truly expedient to invest in it at the moment,’ DSG International General Director John Clare said. DSG International reports abandoning the option is not going to affect them financially; however, the company’s stock price dropped by nearly 5% on the very day of abandonment.

Eldorado decided to become the option-giver in April 2005 when DSG was given a chance to buy 10% of the company’s shares before 2008. The British company could then enlarge its share holding if they wanted to, with the final amount of shares possibly coming to 100%.

'We respect the decision made by DSG International, even though we can’t seem to find any problems with either our way of doing business or our strategy. We are not trying hard to find new partners right now,’ Eldorado’s Vice President Bert Van der Velde said to a BBC radio reporter.

Mr. Van der Velde says DSG International might have refused to buy a share in the company’s authorized capital for fear of political and economic risks on the Russian market, as Foreign Office has recently warned the British business community about the risks related to investing in Russia.

'Living in Russia, we tend to see things differently and sometimes overlook the risks foreign media speak about. I am a foreigner who works in Russia and for a Russian company, and I don’t see these risks. They may be apparent to someone from afar and, if the British hear about these risks all the time, this cannot help affecting the decisions the British enterprises make,’ he observed.


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