LSRG.L Regulatory News (LSRG)

THIS PRESS RELEASE AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN, OR INTO, DIRECTLY OR INDIRECTLY, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS), CANADA, JAPAN, AUSTRALIA or the russian federation OR TO ANY OTHER JURISDICTION WHERE SUCH AN ANNOUNCEMENT WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN or the russian federation 

This press release is not a prospectus but an advertisement. Investors should not subscribe for any securities referred to in this announcement except on the basis of information in the prospectus to be published by LSR Group in connection with the Offering of Shares and GDRs. Copies of any prospectus may be obtained at the offices of LSR Group.

30 April 2010, LSR Group Press Release

LSR Group announces the pricing of its Global Offering at US$8.50 per GDR, equivalent to US$42.50 per ordinary share

LSR Group ("LSR" or the "Company") (LSE: LSRG; MICEX, RTS: LSRG) announces that the global offering, in the form of ordinary shares and Global Depositary Receipts ("GDRs") representing ordinary shares (the "Global Offering"), priced at US$8.50 per GDR, equivalent to US$42.50 per ordinary share. Five GDRs represent an interest in one ordinary share.

Summary of the Global Offering

·; The offer price in the Global Offering has been set at US$8.50 per GDR, which is equivalent to US$42.50 per ordinary share

·; A total of 9,366,383 ordinary shares in the form of GDRs was sold by Streetlink, a limited liability company that is organized under the laws of Cyprus and owned by the Company's controlling shareholder, Mr. Andrei Molchanov.Total proceeds raised in the Global Offering will be approximately US$398.1 million, which following the deduction of commissions and offering-related expenses payable by the Selling Shareholder and the Company, will be reinvested in the Company by way of the Selling Shareholder's exercise of its pre-emptive rights to acquire 9,366,383 newly issued ordinary shares of the Company in the follow-on Open Subscription described below.

 As a result, the Company will receive approximately US$ 385.3 million in net proceeds from the Open Subscription. Mr Molchanov has decided not to sell directly any ordinary shares or GDRs in the Global Offering.

·; Shortly after the completion of the Global Offering, the Company will offer 16,042,508 new ordinary shares through an open subscription (the "Open Subscription"). Existing holders of the Company's ordinary shares as at 5 March 2010 (the "Record Date") have statutory pre-emptive rights to subscribe for the new ordinary shares to be issued in the Open Subscription. Streetlink has committed to subscribe for 9,366,383 new ordinary shares with its net proceeds from the Global Offering.

·; The Company intends to use the proceeds it receives in the Open Subscription:

- to partially repay its outstanding indebtedness and/or use such proceeds to fund favorable acquisition opportunities;

- to fund the expansion of its real estate development business through acquisition of land plots;

- to finance existing and to launch the construction of new development projects; and

- to finance general building materials capital expenditure, and for other general corporate purposes.

·; The Company, Streetlink, Mr. Molchanov and members of the Company's Senior Management who are shareholders of the Company have agreed, subject to customary exceptions, to enter into a lock-up agreement for a period of 90 days following completion of the Global Offering.

·; Goldman Sachs International and J.P. Morgan Securities Ltd. are acting as Joint Global Coordinators, and together with VTB Capital, as Joint Bookrunners in connection with the Global Offering.

Commenting on today's results, Igor Levit, CEO of LSR, said:

"Despite deteriorating market conditions, the transaction managed to attract significant demand from a large variety of respected institutional investors from the US, UK, Europe, Russia and elsewhere. This transaction represents another significant milestone in LSR Group's development. We appreciate the continued support from our existing shareholders and also welcome our new shareholders."

* * * * * * *

Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries the Company operates in, as well 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 the United States, Australia, Canada, Japan or the Russian Federation. These materials do not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to 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 therefore. The offer and the distribution of these materials and other information in connection with the listing and offer in certain jurisdictions may be restricted by law 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.

These materials are not an offer for sale of any securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933. The Company has not registered and does not intend to register any portion of any offering in the United States or to conduct a public offering of any securities in the United States.

This communication is not an invitation nor is it intended to be an inducement to engage in investment activity for the purpose of section 21 of the Financial Services and Markets Act 2000 (as amended) of the United Kingdom. To the extent that this communication does constitute an inducement to engage in any investment activity included within this press release, it is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

This communication is distributed in any member state of the European Economic Area which applies Directive 2000/71/EC (this Directive together with any implementing measures in any member state, the "Prospectus Directive") only to those persons who are investment professionals for the purposes of the Prospectus Directive in such member state, and such other persons as this document may be addressed on legal grounds, and no person that is not a relevant person may act or rely on this document or any of its contents.

Information contained in this communication does not constitute an advertisement or an offer of any securities in Russia and must not be passed on to third parties or otherwise be made publicly available in Russia. Any global depositary receipts have not been and will not be admitted to public placement or public circulation in Russia and may not be offered to any person in the Russian Federation except as permitted by Russian law.