PIK announces new capital markets strategy with focus on Moscow Exchange; approves tender offer for GDRs and cancellation of GDR listing from the London Stock Exchange - новости ПИК от 13 марта 2017
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13 марта 2017

PIK announces new capital markets strategy with focus on Moscow Exchange; approves tender offer for GDRs and cancellation of GDR listing from the London Stock Exchange

Not for distribution in or into or to any person located or resident in the United States, its territories and possessions or to any U.S. person (as defined in regulation S under the United States securities act of 1933) or in any jurisdiction where it would be illegal or unlawful. The tender offer described in the announcement is only made to GDR holders outside of the United States and must not be acted upon by, or for the account or benefit of, a U.S. person (as defined in regulation S under the United States securities act of 1933, as amended). Holders of rule 144a GDRs may not participate in the tender offer.

This announcement contains inside information.

·       PIK has become Russia’s leader in the residential real estate sector. 

·       The Company believes that its share price has yet to reflect this transformation, and will seek to address this with an enhanced and more proactive capital markets strategy.

·       The new capital markets strategy will focus on improving the dividend policy and boosting liquidity, as well as strengthening investment community engagement.

·       The first phase of the strategy will be to consolidate the Company’s free-float on Moscow Exchange by delisting GDRs from the London Stock Exchange.

·       In line with best corporate governance practices, PIK will carry out a tender offer for its GDRs listed on the London Stock Exchange (“LSE”) before cancelling its listing on the LSE, and will keep the GDR programme going forward.

London-Moscow, 13 March 2017 – PIK Group ("PIK" or the "Company") (MOEX: PIKKLSE: PIKK) announces a new capital markets strategy (the “Strategy”) aimed at maximising shareholder value and improving the funding profile of the CompanyThe first major step of the Strategy will be the consolidation of trading of PIK’s shares on Moscow Exchange (“MOEX”) in order to further improve liquidity. In accordance with the decision taken by the Company’s Board of Directors on 10 March 2017, the Company intends to cancel the listing of its Global Depositary Receipts ("GDRs") from the Official List of the United Kingdom Financial Conduct Authority (“FCA”) and from trading on the standard segment of the London Stock Exchange ("LSE") in accordance with Listing Rule 5.2.8 of the FCA Handbook (the “Delisting”).


Following a series of acquisitions and organic growth, which made PIK Russia’s leading residential real estate development company by market share[1] and capitalisation[2], the Company has been examining a number of options to further maximise shareholder value, as well as to diversify and improve its funding profile. As a result of the analysis carried out by the Company, a new capital markets strategy has been developed focusing on the following key areas:

·       Reinforcing PIK Group’s standing as a public company by boosting liquidity and consolidating the free-float;

·       Optimising the cost of funding through a continued presence on the debt capital markets;

·       Adoption of a new dividend policy in order to return value to shareholders;

·       Upgrading the IR function to meet best market practices and strengthen investment community engagement.

The new capital markets strategy, including the Delisting, is consistent with PIK’s overall business strategy and its commitment to maximising value for shareholders. PIK will remain focused on its operational and financial performance, while growing market share in its core segments and geographies.

The Delisting will consolidate the Company’s free-float and trading on MOEX, enhancing liquidity and reducing the Company's reporting costs. Trade volumes on the LSE were consistently low and there were significant price discrepancies between PIK’s GDRs traded on the LSE and ordinary shares traded on MOEX. To the best of the Company’s knowledge, the vast majority of PIK investors trade ordinary shares on MOEX, which has implemented reforms to bring its infrastructure in line with international standards, including establishing a central securities depository, T+2 settlement cycle and provision of settlement services by Euroclear and Clearstream.

Sergei Gordeev, President and Chairman of the Management Board, said:

“Today PIK is on the cusp of a new stage in its development. The new capital markets strategy and concentration of trading on Moscow Exchange will help to boost liquidity and enhance the efficiency of our investor relations programme. I believe that following a series of successful acquisitions and approval of our Strategy, PIK is set to unlock its fair value by accelerating earnings growth, optimising costs and delivering synergies.

“Through continuous operating efficiency improvements, innovation, and smart acquisitions, we have reached a scale that will allow PIK to strengthen our unrivalled leadership in our market segment. We will strive to become the role model in our sector for value creation, good corporate governance, share liquidity, consistent and fair dividend payments, as well as open and transparent investor relations. We have a clear strategy in place to make this happen and I am confident that our strong management team can carry out these plans”.

Tender Offer

With the aim of assuring the rights and interests of GDR holders in the context of low liquidity of the Company’s GDRs on the London Stock Exchange, and in keeping with its strong commitment to good corporate governance and fair treatment of GDR holders, the Company is providing its GDR holders the option to tender their GDRs to PIK at US$ 5.101 per GDR (the “Tender Offer”). The Company approved the publication by LLC “PIK-Investproekt”, a subsidiary of the Company, of a tender offer memorandum (the “Tender Offer Memorandum”) to GDR holders to tender for cash up to 49,990,198 GDRs. The Tender Offer is only made to GDR holders outside of the United States. Holders of Rule 144A GDRs may not participate in the Tender Offer.

The purchase price represents a premium of 13% per GDR to the 3-month volume weighted average price and a premium of 3% per GDR to the closing price on the LSE on 10 March 2017. 

The Tender Offer will remain open until and will expire at 12:00 p.m., British Standard Time, on 24 March 2017. If more than the maximum number of GDRs are validly tendered pursuant to the Tender Offer, the tendered GDRs will be purchased on a pro rata basis according to the number of GDRs validly tendered by GDR holders in accordance with the conditions in the Tender Offer Memorandum

If GDR holders choose not to tender their GDRs, they may:

·       continue to own delisted GDRs, retaining the right to vote and receive dividends on the underlying shares;

·       sell their GDRs on the over-the-counter (OTC) market; or

·       convert their GDRs into MOEX-listed ordinary shares.

Detailed information on the Delisting and the Tender Offer can be found in the Tender Offer Memorandum dated today. The Tender Offer Memorandum and related documents are now available on the Company's website at http://pik-group.com/investors/tender-offer. 

The Delisting will not immediately follow the completion of the Tender Offer in order to give GDR holders the opportunity to sell their GDRs in the open market before the Delisting. An application will be made with the UK Listing Authority and Delisting is expected to take place on 15 June 2017. Following the Delisting, the GDR programme itself will remain in place, administered by BNY Mellon.

PIK confirms that it maintains its commitment to a high standard of corporate governance and disclosure. In particular:

·       The Company retains its existing governance structure, including a Board of Directors with a number of reputable independent directors, which will continue to set PIK’s long-term strategic targets and maintain a management team led by President and CEO Sergei Gordeev accountable for achieving them;

·       PIK intends to remain focused on building strong relationships with investors and the broader international investment community; and

·       The Company will continue to publish results and provide updates on its performance to the market, in the form of quarterly operating and half-yearly financial results disclosure.

Conference Call and Q&A Session

Today, PIK Group management team will hold a conference call and Q&A session for media at 11:00 Moscow time (8:00 London time), and for investors and analysts at 15:00 Moscow time (12:00 London time).

The conference calls can be joined by using the information presented below.

PIK Group Strategy 2017-2018 call for media:

Russia (Moscow): +7 495 213 1767

United Kingdom: +44 330 336 9105

Conference ID (Russian): 5409187 

PIK Group Strategy 2017-2018 call for investors and analysts:

Russia (Moscow): +7 495 213 1767

United Kingdom: +44 330 336 9105

Conference ID(English): 1760929 



PIK Group was founded in 1994 and today is the leading residential real estate developer by construction volumes (sqm) in the Moscow Metropolitan Area and in Russia as a whole[3]. 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 16 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 and the Company has the largest market cap among Russian peers of $3.3 billion[4]. PIK Group has a strong reputation on the market and continues to demonstrate robust financial and operating results:

·       Record growth by all indicators in 2016 - total cash collections progressed by 47% year-on-year, new sales contracts to customers advanced by 52% year-on-year, 63 new properties were put on sale against 50 in 2015;

·       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.

2017 will be a turning point as the Company intends to double the size of its business primarily on account of synergy gains arising from the acquisition deal, favourable market momentum and a lower mortgage rate trend. PIK expects to achieve total new sales to customers of 1.7 – 1.9 million sqm (up 80-100% year-on-year) and total cash collections of RUB 190 - 200 billion 
(up 90-100% year-on-year).

The person responsible for arranging for the release of this announcement on behalf of PIK is Polina Kurshetsova.


PIK contacts

Investors                                                                  Media 

Polina Kurshetsova                                                    Natalia Mikhna

Tel: +7 495 505 97 33 ext. 3785                               Tel: +7 909 913 14 70 

[1] Source: National Association of Property Developers data as of 1 March 2017, as a sum of PIK and Morton’s data

[2] As of 10 March 2017

[3] Source: National Association of Property Developers data as of 1 March 2017, as a sum of PIK and Morton’s data

[4] As of 10 March 2017