LSRG.L Regulatory News (LSRG)

17 Dec 2007 14:20

Open Joint-Stock Company LSR Group17 December 2007 THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR into AUSTRALIA, CANADA, JAPAN, The Russian federation OR THE UNITED STATES For immediate release LSR GROUP ENTERS THE EKATERINBURG MARKET St. Petersburg, 17 December 2007 - LSR Group ("LSR" or the "Group")one of theleading real estate developers and building materials producers in St Petersburgand the Leningrad region (LSE: LSRG, MICEX, RTS: LSRG), announced today that aspart of Group's strategy of geographical diversification, it acquired 100% ofthe share capital of "Investproekt" LLC - an entity which owns two land plots inEkaterinburg with a total area of 50 Ha. The transaction totaled Euro 50million and was financed with borrowings as well as proceeds from the recent IPOof the Group. Commenting on the acquisition, Mr. Levit, CEO and member of the Board ofDirectors of LSR Group, said: 'Ekaterinburg is the third most important strategic market for us afterSt.Petersburg (and the St.Petersburg region) and Moscow (and the Moscow region). The acquisition of the two plots in Ekaterinburg was completed in a shortperiod of time and represents the first step in building an integrateddevelopment and building materials presence of the LSR Group in the Uralsregion' Ekaterinburg has a population of 1.3 million and is the forth largest market interms of annual construction volume after Moscow (and the Moscow region),St.Petersburg and Kazan. During the last few years, the Ekaterinburgconstruction market has been growing at a fast pace - the total area of newconstruction in 2006 was 732,700 sq.m., up 90,000 sq.m. from 2005 and 1.5 timesfrom 2004. According to the Ekaterinburg Administration, about 770,000 sq.m. ofnew construction will be commissioned in 2007. The plots acquired by LSR Group are situated in a residential area of the cityand, according to market participants, about 600,000 sq.m. of residential realestate can be built on them. Today the price of one square meter of mass marketand business class residential real estate on the primary market ofEkaterinburg is approximately USD 1,800 - 2,500. The acquisition was approved at a meeting of LSR Group's Board of Directors. Itwill be consolidated in the financial results of LSR Group in December 2007 andwill be reflected accordingly in the 2007 annual accounts of the Group as wellas the Group's land bank valuation to be performed by an independent valuationcompany as at 31 December 2007. Notes to Editors Founded in 1993, LSR is one of the leading real estate development, constructionand building materials companies in St. Petersburg and the Leningrad region,combining two complementary market leading businesses. The Group is one of the leaders in the development of elite residential realestate projects in St Petersburg and a significant developer of mass-market realestate there. The Group also has a market leading position in the production ofbuilding materials and aggregates in St Petersburg and the surrounding Leningradregion. The Group is one of the largest producers of ceramic bricks in Russia and one ofthe largest producers of aerated concrete in Russia. In 2006 it was, andremains, the market leader in St. Petersburg and the Leningrad region in each ofsand, crushed granite, bricks, reinforced concrete, ready-mix concrete andaerated concrete segments. LSR manages and operates its businesses through two divisions: • Real Estate Development, Commercial Real Estate and Construction, whichrepresented approximately 35 per cent of consolidated revenues in 2006; and • Building Materials, Aggregates and Construction Services, which represented approximately 64 per cent of consolidated revenues in 2006. LSR Group employs nearly 15,000 people. In 2004, 2005 and 2006 the revenues ofLSR Group were RUB 7,530.9 mln, RUB 13,085.5 mln, and RUB 21,110.8 mlnrespectively. For the six months of 2007 the Group's revenues amounted to RUB16,062.0 mln compared to RUB 9,336.4 mln for the same period last year. In July2007, Moody's Investors Service assigned a B1 rating to LSR Group; outlook -stable. In December, 2007 LSR Group has been awarded a National Business Award as theCompany of the Year in 'Construction' category. For more details please contact: Press Service, LSR Group+7 (812) 314-1044press@lsrgroup.ruwww.lsrgroup.ru Legal disclaimer: NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,AUSTRALIA, CANADA OR JAPAN ... Some of the information in these materials may contain projections or otherforward-looking statements regarding future events or the future financialperformance of the Company. You can identify forward looking statements by termssuch as "expect", "believe", "anticipate", "estimate", "intend", "will","could," "may" or "might" the negative of such terms or other similarexpressions. The Company wishes to caution you that these statements are onlypredictions and that actual events or results may differ materially. TheCompany does not intend to update these statements to reflect events andcircumstances occurring after the date hereof or to reflect the occurrence ofunanticipated events. Many factors could cause the actual results to differmaterially from those contained in projections or forward-looking statements ofthe Company, including, among others, general economic conditions, thecompetitive environment, risks associated with operating in Russia, rapidtechnological and market change in the industries the Company operates in, aswell as many other risks specifically related to the Company and its operations. Neither these materials nor any copy of it may be taken or transmitted into theUnited States, Australia, Canada or Japan. These materials do not constitute orform part of any offer or invitation to sell, or any solicitation of any offerto purchase nor shall it (or any part of it) or the fact of its distribution,form the basis of, or be relied on in connection with, any contract therefor.The offer and the distribution of these materials and other information inconnection with the listing and offer in certain jurisdictions may be restrictedby law and persons into whose possession any document or other informationreferred to herein comes should inform themselves about and observe any suchrestriction. Any failure to comply with these restrictions may constitute aviolation of the securities laws of any such jurisdiction. These materials are not an offer for sale of any securities in the UnitedStates. Securities may not be offered or sold in the United States absentregistration or an exemption from registration under the U.S. Securities Act of1933. The Company has not registered and does not intend to register anyportion of any offering in the United States or to conduct a public offering ofany securities in the United States. This communication is directed only at (i) persons who are outside the UnitedKingdom or (ii) persons who have professional experience in matters relating toinvestments falling within Article 19(1) of the Financial Services and MarketsAct 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worthentities, and other persons to whom it may lawfully be communicated, fallingwithin Article 49(2) of the Order (all such persons together being referred toas "relevant persons"). Any investment activity to which this communicationrelates will only be available to and will only be engaged with, relevantpersons. Any person who is not a relevant person should not act or rely on thisdocument or any of its contents. This communication is distributed in any member state of the European EconomicArea which applies Directive 2000/71/EC (this Directive together with anyimplementing measures in any member state, the "Prospectus Directive") only tothose persons who are investment professionals for the purposes of theProspectus Directive in such member state, and such other persons as thisdocument may be addressed on legal grounds, and no person that is not a relevantperson may act or rely on this document or any of its contents. This information is provided by RNS The company news service from the London Stock Exchange