LSRG.L Regulatory News (LSRG)

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT. THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT, PRIOR TO ITS PUBLIC DISCLOSURE, IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OF, OR THE SOLICITATION OF AN OFFER TO ACQUIRE OR DISPOSE OF SECURITIES IN ANY JURISDICTION, INCLUDING IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA AND JAPAN.

Press-release

St. Petersburg

3 April 2019

Results of the Sale of Existing Ordinary Shares in PJSC LSR Group

PJSC LSR Group (the "Company" or "LSR Group"), one of Russia's leading residential real estate developers and building materials producers, further to its announcement of 2 April 2019 relating to the Intended Sale of Existing Ordinary Shares in PJSC LSR Group, has been informed that Solneau Limited (the "Seller"), a company controlled by Mr. Andrey Molchanov (Chairman of the Board of Directors and the largest shareholder of the Company), has entered into an agreement to sell 10 million ordinary shares in the Company (the "Sale Shares") in the form of local Rouble denominated ordinary shares listed on the Moscow Exchange (the "Sale") at a price of RUB580 per Sale Share (the "Offer Price") (for purchasers who have expressed a wish to pay in US Dollars, the amount payable per Sale Share will be USD8.8587, based on the exchange rate set by the Central Bank of Russia for 3 April 2019, being USD1:RUB65.4726). The Sale Shares represent 9.71% of the issued share capital of the Company.

As a result of strong demand from investors, the Seller's original target of selling approximately 5.7 million ordinary shares was upsized to 10 million ordinary shares, to provide more liquidity to the stock.

Based on the Offer Price the Seller will receive gross proceeds from the Sale of approximately RUB5.8 billion. The Company will not receive any proceeds of the Sale.

J.P. Morgan Securities plc and VTB Capital plc (the "Managers") acted as Joint Global Coordinators and Joint Bookrunners in connection with the Sale.

In connection with the Sale, each of Mr. Andrey Molchanov and the Seller have agreed to lock-up arrangements for 90 days following the completion of the Sale, subject to customary exceptions, in respect of their remaining shareholdings in the Company.

Following completion of the Sale, Mr. Andrey Molchanov will continue to hold in aggregate approximately 50.33% of the issued share capital of the Company. Correspondingly, the Company's free float will increase to approximately 41.57%.

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Company description:

LSR Group is one of Russia's leading residential real estate developers and building materials producers. Founded in 1993, the business of LSR Group is concentrated in the three largest regions of Russia - Moscow, St. Petersburg and Yekaterinburg. The main business areas of the Company are real estate development and construction and production of building materials. LSR Group carries out projects in all segments of residential real estate market: mass market, business and elite.

In accordance with its audited IFRS consolidated financial statements for 2018, LSR Group had revenue of RUB146.3 billion, Adjusted EBITDA of RUB36.4 billion and Net Profit of RUB16.2 billion.  As of 31 December 2018 (according to Knight Frank), the net sellable area of projects in LSR Group's real estate portfolio amounted to 7.8 million m2 with a market value of RUB186 billion.

Ordinary shares of the Company are traded on the Moscow Exchange (MOEX: LSRG) and GDRs representing its ordinary shares are traded on the London Stock Exchange (LSE: LSRG).

IMPORTANT NOTICE

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan or any other jurisdiction where the offering of the Sale Shares or the Sale is restricted by law. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the Sale Shares to any person in the United States, Australia, Canada or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The Sale Shares may not be offered or sold in the United States unless registered under the US Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act. The offer and sale of the Sale Shares has not been and will not be registered under the US Securities Act or under the applicable securities laws of Australia, Canada or Japan. Subject to certain exceptions, the Sale Shares may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. There will be no public offer of the Sale Shares in the United States, Australia, Canada or Japan or elsewhere.

The Sale Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Sale the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

Members of the general public are not eligible to take part in the Sale. In member states of the European Economic Area (the "EEA" and each a "Relevant Member State"), this announcement and any offer if made subsequently is directed at and addressed only to persons who are "qualified investors" within the meaning of the Prospectus Directive ("Qualified Investors"). For these purposes, the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU. In the United Kingdom this announcement is directed at and addressed only to Qualified Investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) who fall within Article 49(2)(A) to (D) of the Order, or (iii) to whom it may otherwise lawfully be communicated ("relevant persons"). Any investment or investment activity to which this announcement relates is and will be available only to relevant persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

Each of the Company, Mr. Andrey Molchanov, the Seller, the Managers and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

No prospectus or offering document has been or will be prepared in connection with the Sale. Any investment decision to buy securities in the Sale must be made solely on the basis of publicly available information. Such information is not the responsibility of and has not been independently verified by the Company, Mr. Andrey Molchanov, Seller or any of the Managers or any of their respective affiliates.

Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Sale. The value of the Sale Shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Sale for the person concerned.

The Managers, each of which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, are acting exclusively for the Seller and no-one else in connection with the Sale. They will not regard any other person as their respective clients in relation to the Sale and will not be responsible to anyone other than the Seller for providing the protections afforded to their respective clients, nor for providing advice in relation to the Sale, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the offering of the Sale Shares, the Managers or any of their respective affiliates may take up a portion of the Sale Shares as a principal position and in that capacity may retain, purchase, offer to sell or sell for their own accounts such securities and any other securities of the Company or related investments in connection with the offering or otherwise. Accordingly, any references to the Sale Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Managers and any of their respective affiliates acting in such capacity. In addition, the Managers and any of their respective affiliates may enter into financing arrangements (including swaps or contracts for difference) with investors in connection with which the Managers and any of their affiliates may from time to time acquire, hold or dispose of the Sale Shares. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

None of the Managers or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, the Seller, their respective subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.