LSRG.L Regulatory News (LSRG)

2 Apr 2008 07:44

Open Joint-Stock Company LSR Group02 April 2008 NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN For immediate release LSR Group finalizes the acquisition of approximately 87% of Betfor ReinforcedConcrete Factory, a leader in the construction and building materials market of the Ural region St. Petersburg, 2 April 2008 - 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 theGroup has received depositary confirmation of the transfer to LSR ofapproximately 87% of OJSC Betfor Reinforced Concrete Factory located inYekaterinburg. The deal is worth Euros 57 million and was approved by LSR'sBoard of Directors in March 2008. This is the first company acquired under the agreement with the Urals-basedNOVA-GROUP holding company about the acquisition of a series of its buildingmaterials and real estate assets in Yekaterinburg. Currently, LSR Group isconducting due diligence on a number of other NOVA-GROUP assets with a view topotentially acquiring them. However, it has not committed itself to buying anysuch assets yet and does not consider it appropriate to disclose details of suchpotential acquisitions at present. NOTES TO EDITORS: OJSC Betfor Reinforced Concrete Factory is the largest prefabricatedconstruction company in Yekaterinburg. It manufactures prefab constructionpanels (with a capacity of 200,000 sq.m a year). In addition, the Company hasmanufacturing facilities to turn out reinforced concrete products (120,000 cub.ma year), aerated concrete (120,000 cub.m a year), concrete and dry mixes (50,000cub.m a year). In 2007, Betfor's market share of the panel construction segment inYekaterinburg was 78.6%. Betfor has been the No.1 prefab construction companyfor several years now. The company is also one of the market leaders in building materials production.Thus, according to its own estimates, its share of the Yekaterinburg and theSverdlovsk region market is 30.2% for aerated concrete, 37.4% for reinforcedconcrete products, and 5.1% for ready-mix concrete and mortar. Yekaterinburg is the main city of the RF Urals Federal District. It is a majoradministrative, industrial, transport, trade, research and cultural centre.Yekaterinburg is the centre of the Sverdlovsk Oblast. The population ofYekaterinburg is around 1.3 million people. By its volume of construction theregion ranks fourth after Moscow (including the Moscow region), St. Petersburgand Kazan. The construction market in Yekaterinburg has been rapidly growingover recent years: e.g. a total of 900,000 sq.m of housing were completed in2007, nearly 170,000 sq.m (23% growth rate) more than in 2006 (732,700 sq.m). In2006, the growth of housing construction compared to the 2005 volume (approx.640,000 sq.m) was 14%. According to the reports of DTZ, as at end of 2007 thecost per sq.m of economy and business class residential property in the primarymarket was US$ 2,150-US$ 2,500 while the average monthly wages were 16,000roubles (by this indicator Yekaterinburg holds third place in Russia). In 2007,Standard & Poors assigned a BB rating to Yekaterinburg, with a stable outlook. OJSC LSR Group is a diversified construction company founded in 1993 andoperating in a number of complementary market segments. Its core business areasare building materials, construction and real estate development. The Groupincludes enterprises for extraction and processing of aggregates, productionand transportation of building materials, and housing construction - from massmarket large-panel housing to elite property built after designs made by leadingdomestic and foreign architects. LSR Group has operations and offices in a number of cities in the LeningradOblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia,Ukraine and Germany. LSR Group employs over 15,000 people. In 2005 and 2006 the revenues of LSR Group(according to IFRS statements) were RUB 13,085.5 million and RUB 21,110.8million respectively. For the six months of 2007 the Group's revenues amountedto RUB 16,062.0 million compared to RUB 9,336.4 million for the same period lastyear. In July 2007, Moody's Investors Service assigned a B1 rating to LSR Group;outlook - stable. In November 2007, OJSC LSR Group implemented an IPO. InDecember 2007, LSR Group was bestowed a National Award in the field of businessas 'The Company of the Year' in the 'Construction' category. NOVA-GROUP Construction Holding Company is a dynamically developing group ofcompanies having, similarly to LSR Group, two core businesses: 1. Production ofBuilding Materials; 2. Real Estate Development and Construction. Groupcompanies produce crushed stone, concrete, reinforced concrete products, aeratedconcrete, windows, as well as engage in real estate development, architecturaland engineering design work, construction and subsequent property management.NOVA-GROUP brands are well-known in the market of Yekaterinburg and theSverdlovsk region. For more details please contact: Press Service, LSR GroupTel.: +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