Russia's Sistema investment major ups stake in Etalon developer to 30%

Russia's Sistema investment major ups stake in Etalon developer to 30%
By bne IntelliNews June 9, 2021

Russian multi-industry investment conglomerate AFK Sistema has increased its stake in Etalon real estate developer to 29.79% after acquiring an extra 4.2%, according to Interfax.

As reported by bne IntelliNews, last month Sistema had already acquired 25.5% of the new share issue of Etalon. Similarly to rival PIK Group's SPO announcement, Etalon's management previously confirmed their intention to increase its capital in order to expand its land bank portfolio while market conditions are strong. 

Sistema bought the latest additional shares from minority investors, including Baring Vostok fund. Sova Capital estimated based on the June 7 trading close that the 4.2% stake in Etalon is valued at $27mn (RUB2bn). 

Sova Capital analysts see the news as as neutral for Sistema given the relatively small size of the transaction, and reiterated a Buy rating on Sistema's shares. 

Etalon previously saw weakness in 1H20, but a rebound in 3Q20 sales was welcomed by the analysts. The company went back into profit in 4Q20 and most recently updated an ambitious strategy, setting its dividend payment at 40-70% of net profit.

However, only high prices supported Etalon's flat cash collections in 1Q21 amid 22% year-on-year and 41% quarter-on-quarter declines in sales in square metre terms.


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