LNTA.L Regulatory News (LNTA)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE RUSSIAN FEDERATION (UNLESS OTHERWISE PERMITTED UNDER RUSSIAN SECURITIES LAWS) OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. 

These materials are not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia). These materials are not an offer or solicitation to purchase or subscribe for securities in the United States. Securities may not be offered or sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. Lenta Ltd. does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States.

This document is an advertisement and is not a prospectus for the purposes of the Prospectus Directive. A prospectus prepared pursuant to the Prospectus Directive is intended to be published, which, when published, can be obtained from Lenta Ltd. at its registered office. Investors should not subscribe for any securities referred to in this document except on the basis of information contained in the prospectus. The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in any relevant Member State) and includes any relevant implementing measure in the relevant Member State.

Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented the Prospectus Directive is addressed solely to qualified investors (within the meaning of the Prospectus Directive) in that Member State.

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii) and (iii) above together being referred to as "relevant persons"). Any securities described herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

LENTA SUCCESSFULLY COMPLETED A PRIMARY CAPITAL INCREASE OF $150 MILLION;EBRD PLACED 17.6 MILLION GDRs, REDUCING ITS STAKE IN LENTA TO 7.4%

St. Petersburg, Russia; 21 October 2015 - Lenta Ltd (LSE: LNTA / LNTR; MOEX: LNTA, "Lenta" or the "Company"), one of the largest retail chains in Russia, is pleased to announce the successful completion of an equity placing of$150 million (the "Placing").

Results of the Placing

· Lenta has successfully completed an equity placing of 21,126,760 new GDRs via an accelerated bookbuild raising gross proceeds of $150 million.

· Additionally, the European Bank for Reconstruction and Development ("EBRD") has placed 17,623,240 GDRs. Following this sale and pro-forma Company's capital increase EBRD will continue to hold a 7.4 per cent stake in Lenta and keeps the right to propose a candidate for a seat on the Company's Board of Directors

· The shares were sold at a price of $7.10 per GDR.

· Pro-forma its capital increase and EBRD sell-down, Lenta's free float has increased to 57.5%

· The Company has applied to the FCA, in its capacity as competent authority under the FSMA, for the GDRs to be admitted to the Official List of the FCA and to the LSE to admit the GDRs for trading under the symbol LNTA on its market for listed securities, on which the Company's existing GDRs are admitted to trading, through its IOB. Subject to the transfer restrictions described under the following chapters of the Prospectus: "Selling and Transfer Restrictions", "Plan of Distribution" and "Settlement and Delivery" and "Risk Factors - Risks Relating to the GDRs and the Trading Market - The GDRs may be delisted from MICEX", the GDRs will be fungible with the existing GDRs.

· The Company expects that unconditional trading in the GDRs through the IOB will commence on or about 26 October 2015 (the "Closing Date").

· Settlement of the Placing is expected to take place on 26 October 2015.

· Credit Suisse Securities (Europe) Limited, J.P. Morgan Securities plc and VTB Capital PLC are acting as Joint Global Coordinators and Joint Bookrunners in connection with the Placing.

Lock-Ups

There will be a lock-up period of 90 days for the Company, Luna Inc. (the investment vehicle of TPG Capital) and EBRD in relation to their respective shareholdings in the Company following the Placing.

Updated guidance:

Following successful completion of the Placing, Lenta is positioned to increase certain of its previously announced growth targets and therefore to update its 2016 guidance as follows:

· Lenta to open at least 40 new hypermarkets in 2016 versus previous guidance of at least 32, significantly more hypermarkets than it has ever opened in a single calendar year

· Sufficient additional specific opportunities for own-store construction in 2016 have been identified, accordingly this increase in 2016 guidance is based solely on expected organic growth

· Looking ahead, Lenta expects to pursue a similar or higher rate of organic growth of new hypermarket openings in 2017 and beyond.

Lenta has previously updated its guidance for 2015 which was not contingent on the results of the Placing and remains unchanged. For 2015, Lenta has increased its store opening guidance to at least 30 hypermarkets and 10-15 supermarkets (unchanged from previous supermarket guidance). The previously communicated sales growth and capital expenditure guidance for 2015 remain unchanged.

Lenta expects that as a result of the further acceleration of growth enabled by the capital increase, the Company will significantly exceed its previously communicated goal of doubling selling space over the three years to December 2016.

Lenta's Chief Executive Officer, Jan Dunning said:

"We are pleased to announce the successful completion of our $150 million equity placing. The proceeds of the capital increase will provide us with further financial flexibility to grow even more quickly and capitalize on the plentiful growth opportunities in Russian food retail. We are increasing our store opening guidance to at least 40 hypermarkets in 2016 and similar or higher numbers of hyper market openings in 2017 and beyond.

With this further acceleration in new store openings we expect to significantly exceed our target of doubling net selling space over the three years to December 2016.

I would also like to take this opportunity to express our gratitude to the EBRD who has been our longstanding partner and supporter as well as to welcome our further broadened shareholder base. Our free float has now increased to over 57% and we expect this will further benefit the liquidity of our stock "

EBRD Managing Director for Industry, Commerce and Agribusiness, Alain Pilloux said:

"The success of this offering demonstrates the continued interest in Lenta on the part of both the international and domestic investor community, based on the company's proven ability to deliver outstanding performance even in challenging economic conditions.

The EBRD continues to be strongly committed to Lenta and is comfortable with its remaining stake in the company following today's partial sale, which was part of a normal portfolio management operation. The Bank looks forward to its continued involvement in the company's Board of Directors"

***For further information, please visit www.lentainvestor.com, or contact:

Lenta

Anna Meleshina, Director of Public Relations and Government Affairs

+7 812 363 28 53

Anna.Meleshina@lenta.com

Albert Avetikov, Director of Investor Relations

+7 812 363 28 44

Albert.Avetikov@lenta.com

About Lenta

Lenta is one of the largest retail chains in Russia and the country's second largest hypermarket chain (in terms of 2014 sales). The Company was founded in 1993 in St. Petersburg. Lenta operates 122 hypermarkets in 631 cities across Russia and 27 supermarkets in the Moscow region, with a total of approximately 787,804 sq.m. of selling space. The average Lenta hypermarket store has selling space of approximately 6,200 sq.m. The Company operates six hypermarket distribution centres.

The Company's price-led hypermarket formats are differentiated in terms of their promotion and pricing strategies as well as their local product assortment. The Company employed approximately 30,6552 people as of 30 June 2015.

The Company's management team combines a mix of local knowledge and international expertise coupled with extensive operational experience in Russia. Lenta's largest shareholders include TPG Capital and the European Bank for Reconstruction and Development, both of which are committed to maintaining high standards of corporate governance. Lenta is listed on the London Stock Exchange and on the Moscow Exchange and trades under the ticker: 'LNTA'.

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Credit Suisse, J.P. Morgan and VTB Capital are acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this press release) as their client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to their client.

Information contained herein is not an offer, or an invitation to make offers, to sell, purchase, exchange or otherwise transfer securities in the Russian Federation to or for the benefit of any Russian person or entity, except to the extent permitted under Russian securities laws. This document is not an advertisement in connection with the "placement" or "public circulation" (as both terms are defined under Russian securities law) of any securities and securities are not intended for "placement" or "public circulation" in the Russian Federation, in each case unless otherwise permitted under Russian securities laws. Neither securities nor a prospectus relating to such securities has been or will be registered with the Central Bank of Russia.

The Placing has not been approved or licensed by the Central Bank of the United Arab Emirates ("UAE"), the Securities and Commodities Authority of the UAE and/or any other relevant licensing authority in the UAE including any licensing authority incorporated under the laws and regulations of any of the free zones established and operating in the territory of the UAE, in particular the Dubai Financial Services Authority ("DFSA"), a regulatory authority of the Dubai International Financial Centre ("DIFC"). The Placing does not constitute a public offer of securities in the UAE, DIFC and/or any other free zone in accordance with the Commercial Companies Law, Federal Law No 2 of 2015, DFSA Markets Law DIFC Law No. 1 of 2012, Markets Rules and NASDAQ Dubai Rules, accordingly, or otherwise. The global depositary receipts may not be offered to the public in the UAE and/or any of the free zones.

This document does not, and is not intended to, constitute an invitation for an offer of any investment or financial product in the State of Qatar (including the Qatar Financial Centre) and accordingly should not be construed as such. By receiving this document the person or entity to whom it has been provided understands, acknowledges and agrees that (i) neither this document nor any product referred to in it has been registered, considered, approved or authorised by the Qatar Central Bank, the Qatar Financial Markets Authority, the Qatar Financial Centre Regulatory Authority or any other authority or agency in the State of Qatar; (ii) neither Lenta nor EBRD has been authorised or licensed by any such authority to market or sell any products or interests referred to in this document within the State of Qatar; and (iii) all applications in relation to this document should be received, any agreement concluded and any allotments made, from outside Qatar. No marketing of any financial products or services has or will be made from within the State of Qatar. The interests have not been offered, sold or delivered and will not be offered, sold or delivered at any time directly or indirectly in the State of Qatar. This document shall not form the basis of, or be relied on in connection with, any contract in Qatar. Neither Lenta or EBRD nor persons representing them are, by distributing this document, advising individuals resident in the State of Qatar as to the appropriateness of investing in these financial products. Nothing contained in this document is intended to constitute investment, legal, tax, accounting or other professional advice in, or in respect of, the State of Qatar.

This document may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements.

Any forward-looking statements made by or on behalf of Lenta speak only as at the date of this announcement. Subject to its legal and regulatory obligations, neither the Company, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward looking statements contained in this document to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

In no circumstances shall the provision of this document imply that no negative change may occur in the business of the Company after the date of provision of this document, or any date of amendment and/or addition thereto