LSRG.L Regulatory News (LSRG)

9 Nov 2007 09:54

OJSC LSR Group09 November 2007 THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, THE RUSSIAN FEDERATION OR THE UNITED STATES This press release is not a prospectus but an advertisement. Investors should not subscribe for any transferable securities referred to in this announcement except on the basis of information in the prospectus to be published by LSR Group in connection with an offering of its ordinary shares ("Shares") and global depositary receipts ("GDRs") and the admission of GDRs representing LSR Group's shares to the Official List of the UK Financial Services Authority. Copies of any prospectus may be obtained at the offices of LSR Group. LSR GROUP ANNOUNCES OFFER PRICING AT US$ 72.50 PER SHARE AND US$ 14.50 PER GDR LSR Group ("LSR" or the "Group"), one of the leading real estate developers andbuilding materials producers in St Petersburg and the Leningrad region, todayannounces the price of its Global Offering (the "Offering") of Shares which havebeen listed on the Russian Trading System (RTS) and the Moscow InterbankCurrency Exchange (MICEX) and the global depository receipts ("GDRs"), with fiveGDRs representing one Share. Summary of Offering • The Offering has been priced at US$72.5 per Share and US$14.5 per GDR. • Strong, high quality institutional demand was received across all regions in which the shares and GDRs were offered. • A total of 10,643,618 existing Shares or 12.5% of LSR's outstanding shares (excluding the over-allotment option), including Shares in the form of GDRs were allocated to international institutional investors, including to qualified institutional buyers in the United States under Rule 144A, corresponding to a total offer size of approximately US$772 million. • A subscribing shareholder (being one of the selling shareholders) will use the majority of the proceeds of this Offering to subscribe for newly-issued shares in the capital increase ("Capital Increase") to be conducted by LSR Group immediately following completion of the Offering by way of closed subscription for 8,514,896 newly issued shares at the offer price per Share less certain fees and expenses associated with the Offering. The Capital Increase is expected to yield net proceeds of up to approximately US$588 million to fund the Group's growth strategy. Implied market capitalisation of LSR Group upon completion of Capital Increase and at placement price is $6.8 bn. • In connection with the Offering, the Selling Shareholders have granted the Joint Bookrunners an over-allotment option to purchase up to an additional 851,489 Shares in the form of GDRs at the offer price per GDR, exercisable within 30 days from the date of this announcement. • Conditional dealings will commence on the London Stock Exchange today. Admission of GDRs to the Official List of the UK Listing Authority (" Admission"), and unconditional dealings of the GDRs on the London Stock Exchange under the symbol "LSRG LI", is expected to take place on or about 15 November 2007. • Credit Suisse and Deutsche Bank acted as Joint Global Coordinators for the Offering. ABN AMRO Rothschild, Credit Suisse and Deutsche Bank acted as Joint Bookrunners and URALSIB Financial Corporation as Co-Lead Manager Commenting on today's announcement, Igor Levit, CEO of LSR, said: "We welcome our new shareholders to the Group today. We believe the success ofour offering is due in large part to the proven ability of our strategy todeliver growth and value, in both our building materials and developmentbusinesses. We will now move forward with the implementation of our strategicplans, including investments in new production facilities" - Ends - Enquiries: LSR Group Tel: +7 (812) 3141044Julia Sokolova Citigate Dewe Rogerson Tel: +44 20 7638 9571David WestoverMarina ZakharovaScott Fulton 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,which represented approximately 35 per cent of consolidated revenues in 2006;and • Building Materials, Aggregates and Construction Services, whichrepresented approximately 64 per cent of consolidated revenues in 2006. The Group's portfolio of real estate development projects includes 34 completedprojects and 39 properties at various stages of development and a number ofpotential projects currently under consideration. As of 30 June,2007, the Grouphad a development portfolio with a potential net sellable and leasable area ofapproximately 7.8 million square meters located primarily in St Petersburg andthe Leningrad region, much of which is in prime locations. The Group's Building Materials, Aggregates and Construction Services Divisionproduces and sells a variety of building materials, including precast reinforcedconcrete products, ready-mix concrete, bricks and aerated concrete blocks. Thedivision also extracts and processes aggregates such as sand and crushedgranite. The construction services segment of this division provides tower craneservices and operates a fleet of vehicles for the transport of constructionmaterials. The Group has building materials production facilities and quarries from whichit extracts aggregates and clay in St. Petersburg and the Leningrad region.Although historically LSR's centre of operations has been in St. Petersburg andthe surrounding Leningrad region, it has recently started to expand into otherregions of Russia, including Moscow and the Moscow region. It has buildingmaterials production facilities in Moscow producing reinforced concrete productsand ready-mix concrete, and production facilities in each of Estonia and Latviathat produce aerated concrete. For the years ended 31 December 2004, 2005 and 2006 and for the six months ended30 June 2006 and 2007, the Group had revenues of RUB 7,530.9 million, RUB13,085.5 million, RUB 21,110.8 million, RUB 9,336.4 million and RUB 16,062.0million respectively, and as of 30 June 2007 it had total assets of RUB 50,955.4million. Moody's Investors Service assigned a B1 rating to LSR Group in July2007. Legal disclaimer: Some of the information in these materials may contain projections or otherforward-looking statements regarding future events or the future financialperformance of the Company ("LSR" or the "Group"). You can identify forwardlooking statements by terms such as "expect", "believe", "anticipate","estimate", "intend", "wiII", "could," "may" or "might" the negative of suchterms or other similar expressions. The Company wishes to caution you that thesestatements are only predictions and that actual events or results may differmaterially. The Company does not intend to update these statements to reflectevents and circumstances occurring after the date hereof or to reflect theoccurrence of unanticipated events. Many factors could cause the actual resultsto differ materially from those contained in projections or forward-lookingstatements of the Company, including, among others, general economic conditions,the competitive environment, risks associated with operating in The RussianFederation, rapid technological and market change in the industries the Companyoperates in, as well as many other risks specifically related to the Company andits operations. Neither these materials nor any copy of it may be taken or transmitted into theUnited States, the Russian Federation, Australia, Canada or Japan. Thesematerials do not constitute or form part of any offer or invitation to sell, orany solicitation of any offer to purchase nor shall it (or any part of it) orthe fact of its distribution, form the basis of, or be relied on in connectionwith, any contract therefore. The offer and the distribution of these materialsand other information in connection with the listing and offer in certainjurisdictions may be restricted by law and persons into whose possession anydocument or other information referred to herein comes should inform themselvesabout and observe any such restriction. Any failure to comply with theserestrictions may constitute a violation of the securities laws of any suchjurisdiction. 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 any portionof any offering in the United States or to conduct a public offering of anysecurities 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 ArticIe 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. Stabilisation/FSA This communication is distributed in any member state of the European EconomicArea which applies Directive 2003/71/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. Information contained in this communication does not constitute an advertisementor an offer of any securities in The Russian Federation and must not be passedon to third parties or otherwise be made publicly available in The RussianFederation. Any global depositary receipts have not been and will not beregistered in The Russian Federation and are not intended for "placement" or"public circulation" in The Russian Federation. This information is provided by RNS The company news service from the London Stock Exchange