PJSC LSR Group (LSRG)
LSR Group sells a 50% stake in its ZILYUG redevelopment project
St. Petersburg, Russia - 24 June 2019 - PJSC LSR Group ("LSR" or the "Company") (LSE: LSRG; MOEX: LSRG), one of the leading real estate developers and building materials producers in Russia, today announces that it has agreed to sell a 50% stake in Razvitie LLC to Leader Invest, an Etalon Group company.
The deal is part of LSR's strategy to diversify its development assets in the Moscow region. The Group will remain one of the largest participants in the redevelopment project at the former ZIL Likhachev Automotive Plant.
Razvitie LLC is a joint venture between LSR and Leader Invest (an Etalon Group company). In 2015, it won an open tender for the right to develop the southern part of ZIL in the Danilovsky District of Moscow. At that time, LSR already owned the right to exploit and develop the northern area of the former car plant site, which is being transformed into ZILART, LSR's flagship development consisting of more than 1 million square meters of sellable area, and a leading residential complex in the Russian business class real estate market. The development's first apartments have already been commissioned.
Andrey Molchanov, Chairman of the Board of Directors of PJSC LSR Group, commented: "We are pleased with the outcome of this transaction and are delighted to sell an interest in so called ZILYUG to a sustainable and prominent developer who was initially set out to be our long-time partner in the development of this project. With the interests of all parties fully aligned, we are confident that the construction timetable will be executed while maintaining the same level of high-quality work undertaken to date to deliver a very positive impact for all involved in the entire redevelopment project. This divestment enables LSR Group to focus its efforts on the ZILART residential complex in the northern part of ZIL, while broadening its interests elsewhere in Moscow."
The financial terms of the agreement have not been disclosed. LSR Group intends to reinvest proceeds raised from the transaction in new projects.
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About LSR Group:
PJSC 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 RUB146.4 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).
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