R.G.I. reports 67% drop in value of development portfolio

R.G.I. International, the AIM-listed developer of high-end properties in the Moscow region, saw a 67% decrease in the market value of its portfolio in the last nine months. Citing poor macroeconomic conditions and underlying market forces affecting Russian real estate, the developer said the total market value of its development portfolio decreased by 67% to $811.1 mln (EUR 598 mln) from $2.45 bn (EUR 1.8 bn) at end-June 2008.

In its report on the year to end-December 2008, RGI said it suffered a loss attributable to equity holders for the year of $628.7 mln or $5 per share, compared to profit attributable to shareholders of $656.41 mln or $5.45 per share last year. The company recorded a pre-tax loss of $948.3 mln for 2008, compared to pre-tax profit of $657.47 mln in the prior-year period. NAV per share plunged to $4.70 from $16.15, just above the level of $4.50 recorded when the company was admitted to the AIM exchange in London in 2006.

The company said it had responded quickly to the faltering market conditions by limiting work on all but one project to obtaining approvals and permits from the relevant authorities. Construction work has begun on the Tsvetnoy Development, a mid-tier retail development located on Tsvetnoy Boulevard in Moscow. Funding for the project is secured by a $100 mln limited recourse term loan facility. RGI said the facility had been arranged on competitive terms in March 2008. No debt maturities are scheduled for the next 18 months and the company had a cash balance at 31 December 2008 of $21.7 mln.