The Russian residential real estate developer Samolet Group has set its IPO price at RUB950 per share in a rare listing on the Moscow Exchange that starts trading today, the company said on October 29.
The price is at the bottom of its price range that has RUB1,100 as a maximum. Based on the offering price, the market capitalisation of the company will be approximately RUB57bn ($721mn) when trading starts on the Moscow Exchange today under the ticker “SMLT.”
As bne IntelliNews reported, Russia’s residential real estate market is recovering as the economy emerges from several years of crisis. Incomes have been stagnant for six years, but as interest rates fall housing is becoming more affordable. A generous government subsidy programme that keeps mortgages at 6.5% has been very successful and has given the residential real estate market a huge boost.
The offering comprises 3,078,968 ordinary shares offered by Moscovia Ltd, which is controlled by Pavel Golubkov, one of the company’s principal shareholders, equating to an offering size of RUB2.9bn, or 5% of the company.
The offering included shares purchased from Mikhail Kenin, Igor Evtushevsky and a company acting in the interests of Pavel Golubkov for the amount of 600,004 Ordinary Shares, 300,002 Ordinary Shares and 2,178,962 Ordinary Shares respectively, under the sale and purchase agreements with deferred payment provision at the offering price, Samolet said in a statement.
The company has also registered a new issue of up to 1,578,958 shares, or about 2.5% of the company, with the Central Bank of Russia (CBR) that will raise funds that will be invested into the company's growth, to buy new land plots and fund ongoing construction projects.
“The company acting in the interests of Pavel Golubkov subscribed for the New Shares through the exercise of its pre-emptive rights and is expected to pay for the New Shares using the proceeds from the sale in the Offering that it will receive from the Selling Shareholder under the SPA and thus will invest them into the Company,” the company said in its statement. “The placement of Shares in the open subscription will commence on 10 November, 2020 and end on 19 November, 2020. Results of the pre-emptive rights execution is expected to be announced by the Company on or about 20 November 2020.”
The company has seen profits soar this year by 44% in the first six months of the year and the outlook for more growth looks good.
VTB Capital (VTBC) and Brokercreditservice Ltd were appointed as the market makers. VTBC acted as Sole Global Co-ordinator and Joint Bookrunner of the offering. BCS Global Markets acted as Joint Bookrunner. OTKRITIE BROKER, Sovcombank and UNIVER Capital acted as Russian Co-Managers. CFC Management acted as financial advisor to the company in connection with the offering. There will be a lock-up period of 90 days after the IPO.
Anton Elistratov, CEO of Samolet Group, said: “We see a lot of market interest in our offering, and we are pleased to welcome new shareholders to the Company. The placement enjoyed strong demand on the part retail investors, while quality institutional investors also showed a great deal of interest in the Company’s shares.”
Samolet Group specialises in large-scale, full-cycle development projects, while ensuring the construction of social infrastructure facilities during the first phases of its projects. The company has an ACRA rating of BBB+ (positive outlook), an NCR rating of A-.ru (stable outlook) and an Expert RA rating of ruA- (stable outlook). Since its foundation, the company has delivered more than 2mn square metres of real estate. The company’s project portfolio (including freehold ownership, leasehold rights and the rights based on preliminary non-binding arrangements) exceeds 15mn sqm and continues to grow, the company said in a statement.