Moscow, 22 December 2015. – Sistema JSFC (LSE: SSA) (“Sistema” or “the Corporation”) announces that LLC Razvitie, a joint venture between the Corporation and LSR Group, has won an open tender for the right to acquire 100% of LLC ZIL-Yug for RUB 34.2 billion.
The terms of the tender call for payment to be made in instalments over an 8-year period. For 2015-2016, payments to be made by LLC Razvitie will be limited to the advance payment of RUB 1.5 billion that has already been made; the first payment of RUB 2.5 billion will be due in 2017; while a third of the total payment will be made in 2023. Sistema plans to finance with its own funds not more than 10% of its share of the acquisition cost (or not more than RUB 1.7 billion), with the rest of the funds coming from private investors.
The total investment in the project will amount to as much as RUB 135 billion. After the launch of construction in 2017, LLC Razvitie plans to finance the project with proceeds from housing sales and from loans.
LLC ZIL-Yug owns development rights for 109.9 hectares in the southern part of the former ZIL car plant (Avtozavodskaya St., 23). The development project envisages construction of 1.5 million m2 of real estate, including 1.1 million m2 of housing, 0.35 million m2 of commercial real estate and 0.05 million m2 of accompanying infrastructure. About 40 hectares will be developed at the expense of the city budget, including construction of roads and landscaping of adjacent areas.
The project will be implemented in 6 to 7 stages; while the deadline for completing construction is 31 December 2026. Sales of housing in the southern part of the ZIL site will commence in middle of 2017.
The project will be managed on Sistema’s behalf by Sistema subsidiary company Leader-Invest, which is already carrying out another project in the southern part of ZIL, Nagatino i-Land.
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