MOSCOW, May 29 (RIA Novosti) – PIK Group, Russia’s largest real estate developer, is to issue at least $150 million worth of new shares, the company said on Wednesday.
The shares will be priced at 62.5 rubles ($1.97) each, according to a statement on PIK Group’s website. Billionaire Suleiman Kerimov, who controls 38.3 percent of PIK Group through his Nafta Moskva holding, will take part in the offering.
PIK Group is listed in both London and Moscow, but the new shares will be issued in Moscow.
At least 50 percent of the proceeds from the share sale will go towards deleveraging, the company said. PIK Group's debt burdenstood at 37.1 billion rubles ($1.2 billion) at the end of last year.
Aside from Kerimov, large stakes in PIK Group are also controlled by investor Mikhail Shishkhanov (19.99 percent), and state-owned VTB Bank (8.84 percent). Shishkhanov said last month when he revealed his stake in PIK Group that the acquisition was a portfolio investment.
While the minimum value of the share issue is $150 million, media reports earlier this year suggested PIK Group was actually hoping to raise between $300 million and $500 million.
The company “reserves the right to increase the size of the offering to accommodate excess demand,” it said in Wednesday’s announcement.
PIK Group, which held a $1.93 billion Initial Public Offering in London in 2007, focuses on the development of residential real estate, mortgage financing, construction and the production of construction materials.
The company's shares fell 3.34 percent to 63 rubles in Moscow, outpacing the MICEX Index, following the news the share issue will go ahead. They dropped 4.39 percent in London.
Kerimov’s Nafta Moskva and Gilt Partners, whose beneficial owner is Shishkhanov, have both signed lock-up agreements that prevent them from selling shares for six months after the listing.
There have been several large share issuances by Russian companies in Moscow this year, including the successful floatation of the Moscow Exchange. But the international IPO market is weak, and there have been no Russian corporate listings in London in 2013.
VTB Capital and Sberbank CIB are acting as the Joint Global Coordinators and Joint Bookrunners for the offering.