Russia's LSR Group to raise EUR 577m of equity

Russian commercial and residential real estate developer LSR Group has announced plans to raise up to $773 mln (EUR 577 mln) through the issue of new shares and global depositary receipts. The company set the price range for its share offering at $10 to $11 per GDR, equivalent to $50 to $55 per ordinary share.

The capital raising will be managed by Streetlink, which controls 58% of LSR Group and has committed to support the operation by exercising its pre-emptive rights and investing up to $515 mln in the company. The proceeds will be used to repay approximately $300 mln of debt, as well as to fund the expansion of LSR's real estate development business through acquisition of land plots and to finance existing development projects, the company said.

'LSR is a rapidly developing company, strongly positioned in an industry that is expected to make a strong contribution to Russia's economic recovery,' said Igor Levit, CEO of LSR. 'Raising equity capital is an excellent way of both raising financing to enable us to execute our strategy and allowing investors to participate in our growth going forward.'

Goldman Sachs International and J.P. Morgan Securities are acting as joint global coordinators, and together with VTB Capital, as joint bookrunners in connection with the offering.

This week, the company also said it posted a profit of $157 mln in 2009, which compares to a net loss of $205 mln in the year before.