PIK.L Regulatory News (PIK)

3 Sep 2007 08:26

PIK Group03 September 2007 THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY IN THE UNITED STATES OF AMERICA PIK GROUP ("The Group" or "PIK") PIK ACQUIRES A COMMERCIAL DEVELOPER IN RUSSIA (LONDON, 3 September 2007) - PIK Group (LSE: PIK), one of Russia's leadingresidential developer, today announced the acquisition of 50% + 1 share in StormProperties ('The Company'), a dynamically growing real estate company operatingin the commercial sector. Under the framework of the transaction, PIK reserves the right to exercise anoption to purchase an additional 25% of the Company. This option becomeseffective three years from now starting from the date of acquisition of theCompany and expires within two years. Part of the acquisition price paid by PIKshall be reinvested by the Company for future project development. The Company possesses an attractive pipeline of projects with total area of 450000 square meters in the premium class "A" segment. The Company's projects are: • Big City Office Towers, which is situated on Shelepihinskayaembankment on the outer side of the Moscow Third Ring Road (160 000 squaremeters in total); • Business park "Kaluzhsky", south-west Moscow, 2 km away from MKAD (230 000 square meters in total); • "Geneva House", situated in the heart of Moscow on Dmitrovsky sidestreet near to the luxurious shopping centres "TsUM" and "Petrovsky Passage"(18,000 square meters in total);. • Science and technical center "Presnensky Val", a 21-storey building inthe centre of Moscow (24 000 square meters in total). Furthermore, PIK plans to develop commercial real estate projects with estimatedsize of more than $500 million under Strom Properties' umbrella. Commenting on today's announcement, Kirill Pisarev, CEO of PIK said: "This acquisition is coherence with our strategy to seize the best opportunitiesin the commercial real estate sector. The acquisition of Storm Properties givesus the expertise of a team of dedicated professionals and provides us withsignificant pipeline of commercial projects apart from those commercial projectswhich we already have." Commenting on today's announcement, Michael Belton, CEO of Storm Propertiessaid: "I believe that our companies will benefit from a favourable synergy. Thecombination of our companies' project pipeline, financial, and human resourcesshall further justify our leading positions on the Russian real estate market" Storm Properties Overview Founded in 2005, by the team of real estate development professionals headed byMichael Belton. Total headcount is in excess of 50 employees. Previously, Mr. Belton worked as a Deputy General Director of CMI Developmentand managed the projects with the total area exceeding 3,000,000 sqm, includingBalchug Plaza, Krylatsky Hills Business Park, Moscow Medical Center, DreamHouse, and Rublyovo-Arkhangelskoye. Before joining CMI Development, Mr. Belton had been working as the Director ofReal Estate Development for Hines International for 9 years. Hines is globally one of the largest privately owned real estate developer. AtHines International, Mr. Belton successfully developed the residential complex "Pokrovsky Hills", a master planned community in Moscow. "Pokrovsky Hills" is situated on 15.7 hectare of land in the north-westerndistrict of Moscow and represented a US$100 million cost development. Storm Properties' website address is: www.storm.ru PIK Group Overview Founded in 1994, PIK is one of the leading vertically integrated residentialdevelopers in Russia with over 14,000 employees across the country. Its businessactivities are concentrated in Moscow and the Moscow region with an increasingfootprint in many of Russia's other regions. Its principal activity is thedevelopment, construction and sale of residential properties in large scaledevelopments targeted primarily at the middle income housing market in Russia. PIK's core activities include: • development of residential real estate projects and sales of completedunits, including servicing and maintenance of residential real estate developedby PIK and other developers; • production and assembly of concrete panel housing in Moscow as asubcontractor for the Moscow city government; and • production and sale of raw materials and construction materials. The last three years between 2004 and 2006, PIK has completed over 2.5 millionsquare meters of residential housing and over 36,000 residential units inRussia, including over 1.2 million square meters and over 17,000 residentialunits in 2006 alone. June 1, 2007, the Group completed successful listings on the London StockExchange, the RTS and MICEX exchanges in Russia. PIK Group's website address is: www.pik.ru Enquiries: PIK Group Tel: +7 (495) 291-67-54Viktor Szalkay szalkayv@pik.ruInvestor Relations Citigate Dewe Rogerson Tel: +44 20 7638 9571David WestoverTom Baldock - ENDS - NOTES TO EDITORS PIK Group Financial Summary Revenue for 2006 rose by 90% and equalled US$ 1,546 million, while EBITDA for2006 amounted to US$ 486 million. Net profit was US$ 298 million in 2006compared to US$ 20 million in 2005. According to CBRE, an independent appraiser, the combined market value of theGroup's properties valued as of January 1, 2007 was $8.8 billion. Some of the information in this press release may contain projections or otherforward-looking statements regarding future events or the future financialperformance of PIK. 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. Thesestatements are only predictions and actual events or results may differmaterially. PIK does not intend to or undertake any obligation to update thesestatements to reflect events and circumstances occurring after the date hereofor to reflect the occurrence of unanticipated events. Many factors could causethe actual results to differ materially from those contained in PIK'sprojections or forward-looking statements, including, among others, generaleconomic conditions, PIK's competitive environment, risks associated withoperating in Russia, rapid technological and market change, and other factorsspecifically related to PIK and its operations. This information is provided by RNS The company news service from the London Stock Exchange