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.”