LSR Group finalizes the acquisition of Betfor Reinforced Concrete Factory located in Yekaterinburg
02 April 2008
LSR Group finalizes the acquisition of approximately 87% of Betfor Reinforced Concrete Factory, a leader in the construction and building materials market of the Ural region.
St. Petersburg, 2 April 2008 - LSR Group (“LSR” or the “Group”), one of the leading real estate developers and building materials producers in St Petersburg and the Leningrad region (LSE: LSRG, MICEX, RTS: LSRG), announced today that the Group has received depositary confirmation of the transfer to LSR of approximately 87% of OJSC Betfor Reinforced Concrete Factory located in Yekaterinburg. The deal is worth Euros 57 million and was approved by LSR’s Board of Directors in March 2008.
This is the first company acquired under the agreement with the Urals-based NOVA-GROUP holding company about the acquisition of a series of its building materials and real estate assets in Yekaterinburg. Currently, LSR Group is conducting due diligence on a number of other NOVA-GROUP assets with a view to potentially acquiring them. However, it has not committed itself to buying any such assets yet and does not consider it appropriate to disclose details of such potential acquisitions at present.
Notes to Editors:
OJSC Betfor Reinforced Concrete Factory is the largest prefabricated construction company in Yekaterinburg. It manufactures prefab construction panels (with a capacity of 200,000 sq.m a year). In addition, the Company has manufacturing facilities to turn out reinforced concrete products (120,000 cub.m a year), aerated concrete (120,000 cub.m a year), concrete and dry mixes (50,000 cub.m a year).
In 2007, Betfor’s market share of the panel construction segment in Yekaterinburg was 78.6%. Betfor has been the No.1 prefab construction company for several years now.
The company is also one of the market leaders in building materials production. Thus, according to its own estimates, its share of the Yekaterinburg and the Sverdlovsk region market is 30.2% for aerated concrete, 37.4% for reinforced concrete products, and 5.1% for ready-mix concrete and mortar.
Yekaterinburg is the main city of the RF Urals Federal District. It is a major administrative, industrial, transport, trade, research and cultural centre. Yekaterinburg is the centre of the Sverdlovsk Oblast. The population of Yekaterinburg is around 1.3 million people. By its volume of construction the region ranks fourth after Moscow (including the Moscow region), St. Petersburg and Kazan. The construction market in Yekaterinburg has been rapidly growing over recent years: e.g. a total of 900,000 sq.m of housing were completed in 2007, nearly 170,000 sq.m (23% growth rate) more than in 2006 (732,700 sq.m). In 2006, the growth of housing construction compared to the 2005 volume (approx. 640,000 sq.m) was 14%. According to the reports of DTZ, as at end of 2007 the cost per sq.m of economy and business class residential property in the primary market was US$ 2,150-US$ 2,500 while the average monthly wages were 16,000 roubles (by this indicator Yekaterinburg holds third place in Russia). In 2007, Standard & Poors assigned a BB rating to Yekaterinburg, with a stable outlook.
OJSC LSR Group is a diversified construction company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction – from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.
LSR Group has operations and offices in a number of cities in the Leningrad Oblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany.
LSR Group employs over 15,000 people. In 2005 and 2006 the revenues of LSR Group (according to IFRS statements) were RUB 13,085.5 million and RUB 21,110.8 million respectively. For the six months of 2007 the Group’s revenues amounted to RUB 16,062.0 million compared to RUB 9,336.4 million for the same period last year.
In July 2007, Moody’s Investors Service assigned a B1 rating to LSR Group; outlook – stable. In November 2007, OJSC LSR Group implemented an IPO. In December 2007, LSR Group was bestowed a National Award in the field of business as ‘The Company of the Year’ in the ‘Construction’ category.
NOVA-GROUP Construction Holding Company is a dynamically developing group of companies having, similarly to LSR Group, two core businesses: 1. Production of Building Materials; 2. Real Estate Development and Construction. Group companies produce crushed stone, concrete, reinforced concrete products, aerated concrete, windows, as well as engage in real estate development, architectural and engineering design work, construction and subsequent property management. NOVA-GROUP brands are well-known in the market of Yekaterinburg and the Sverdlovsk region.
For more details please contact:
Press Service, LSR Group
+7(812) 314-1044
press@lsrgroup.ru
www.lsrgroup.ru