· Sergei Gordeev increases stake in the Company to 74.6% after successful mandatory offer
· Approximately 24,6% of all shares were tendered
· Company's free float now stands at approximately 25.4%
· Sergei Gordeev confirms intention to retain Company's public listing
· Priorities remain further increase in liquidity, regular dividend payments, reduction of the cost of financing, and SPO in the medium term.
Moscow, 16 October 2017 – Group ("PIK" or the "Company") (MOEX: PIKK), Russia’s largest residential real estate developer, announces the results of a mandatory tender offer and reiterates its intention to pursue a strategy of a presence in capital markets and growth as a public company.
After acquiring stakes in the Company belonging to entities controlled by Alexander Mamut and Mikail Shishkhanov, and in accordance with current legislation, Sergei Gordeev made a mandatory offer to acquire shares from minority shareholders. The purchase price of RUB 290.7 per ordinary share was set based on the weighted average value of the Company’s ordinary shares over the six months of trading on Moscow Exchange preceding the mandatory tender offer (11 July 2017), and represented a 3.82% premium to the price of the transaction with the entities of Alexander Mamut and Mikail Shishkanov.
162,430,664 shares were tendered, representing 24.6% of the total. While some shareholders decided to lock in profits, as of 13 October 2017 the Company’s minority shareholders held approximately 25.4% of shares worth a total of RUB 54.6 billion (including VTB Bank’s 7.6% stake). The closing price on Moscow Exchange on 13 October 2017 was RUB 325.3 per share.
The Board of Directors of PIK Group believes that that Company has maintained an appropriate level of free float for the Russian market, and intends to continue pursuing the Company’s capital markets strategy in the interests of all shareholders. The Company and its controlling shareholder intend to increase free-float in the medium term through an SPO. The Company remains focused on creating shareholder value, developing a strong system of corporate governance, increasing liquidity and making regular dividend payments, as well as maintaining open and transparent relations with investors.
At the same time PIK’s primary priority remains its operational and financial goals, which include reducing the Company’s cost of financing, and increasing market share in key segments and regions in which it operates. Thanks to this focus, the Company has reported record operational and financial results, supported by a growing and diversified project portfolio.
Sergei Gordeev, President and Chairman of the Management Board of PIK, said:
“PIK has become the standard-bearer for residential real-estate development in Russia across all business indicators, which has positively reflected in our share price. I believe that the Company is well placed to achieve a fair market valuation in the foreseeable future and subsequently sustainable growth reflecting the growth of the business.
“I am grateful to all those shareholders who expressed their belief in me and the Company’s senior management team by deciding not to tender their shares. At the same time, I also understand those investors who decided to lock in their profits based on their own investment strategies and horizons.
“I believe that our business has significant potential for growth as macroeconomic conditions continue to recover, and see clear prospects for PIK to become the technology leader in the industry. For this reason I believe that the opportunity I have been given to acquire an additional stake as part of the mandatory tender offer represents an extremely attractive strategic investment.”
Remaining a public company
PIK confirms its commitment to its strategy to develop as a public company and to continue to adhere to best practice standards of corporate governance and information disclosure. In particular:
· The Company will preserve its existing governance structure, including a Board of Directors with independent directors. The Board of Directors will continue to determine PIK’s long-term strategic objectives and monitor the progress of the management team, led by President and Chairman of the Management Board Sergei Gordeev.
· PIK intends to focus on developing robust relations with shareholders and the international investment community.
· The Company will continue to publish results and report on its activities in the form of quarterly operating results and financial results every six months.
About PIK Group
PIK Group was founded in 1994 and today is the leading residential real estate developer in the Moscow Metropolitan Area and in Russia as a whole. The Company is present in nine regions of Russia with an extensive project pipeline focused on the lucrative Moscow Metropolitan Area. The Company has a proven track record with about 17 million sqm of residential real estate built since inception (0.9 million sqm in 2016).
PIK shares have been listed on Moscow Exchange since 2007. PIK Group has a strong reputation on the market and continues to demonstrate robust financial and operating results:
· Record growth by all indicators in 9M 2017: total cash collections grew by 113.4% year-on-year, new sales contracts to customers advanced by 131.6% year-on-year. 10 new properties were put on sale against 4 in 9M 2016;
· The share of mortgage-backed deals has grown sevenfold over the last seven years thanks to a disciplined and customer-centric approach;
· Comfortable leverage profile without exposure to currency risks which creates room for further sustainable growth.
In 2017 the Company intends to maintain its market leadership on the affordable housing market, and expects total new sales to customers of 1.7-1.9 million sqm and total cash collections of RUB 190-200 billion.
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