LenSpetsSMU and Bank Saint Petersburg join forces to finance multi-family residential building with international financial organizations

05.09.2011

Bank Saint Petersburg and LenSpetsSMU (part of Etalon Group), with the participation of Landesbank Berlin AG and the Polish construction company Budostal-3 Export Sp. Z o.o., have signed an export credit loan facility for the construction of housing. The insurance coverage on financing is to be provided by the Polish export credit agency, KUKE S.A.

The financing will be used for construction of one of the apartment blocks in the Orbita project, which LenSpetsSMU is currently building in the Kalininskiy District of Saint-Petersburg (Gzhatskaya str., 29a, lit. A). The total area of the building exceeds 45 thousand sq m, including a covered car park with 118 spaces.

The deal structure entails financing of 85% of the construction costs during a 4.5 year payment term. The borrowed funds are to be paid back in four installments, the first of which will be paid six months after commissioning. The amount of credit provided by Bank Saint Petersburg amounts to EUR 22.6 mn, with total construction costs of over EUR 25 mn.

First Deputy Chairman of the Board of Bank Saint Petersburg, Vladislav Guz, commented: “We are delighted that LenSpetsSMU chose our bank among others to finance its new project. For us, this is further proof of the high quality banking products and services available through Bank Saint Petersburg. Moreover, it demonstrates the interest of the largest regional construction companies in financing of its projects in partnership with international financial organizations. Our bank is always ready to offer clients our experience and capabilities in trade finance.”

In turn, Vyacheslav Zarenkov, the Chairman of Etalon’s Board of Directors, said: “This is the second example of LenspetsSMU undertaking a deal of this kind and we feel positive about utilising financial instruments in the construction industry. Export credit financing allows us to attract long-term borrowings at low rates. At the moment this transaction is the best in our credit portfolio for many reasons. We are very grateful to all involved.”

Mr. Zdzis?aw Tragasz, the Chairman of the Board of Budostal-3 Export Sp. Z o.o., emphasized the high level of cooperation with LenSpetsSMU and the potential for its expansion: “There are many banks in Russia and abroad willing to fund the construction of not only industrial and commercial facilities, but also housing. And to facilitate these transactions, one needs sustainable construction companies with sound reputations. We are glad to be building over 100 thousand sq m in partnership with LenSpetsSMU.”

REFERENCE:

Bank Saint Petersburg is the largest private bank in the Northwest region of Russia. Founded in 1990, over the years the bank has become an integral part of the financial and economic spheres of North-West Russia. Today Bank Saint Petersburg serves over 1 mn individuals and 35 thousand companies through 36 offices and branches in; the St. Petersburg and Leningrad region, Moscow, Kaliningrad, and Nizhniy Novgorod. According to the results of Q2 2011, Bank Saint Petersburg holds 16th place in terms of assets value among Russian banks (according to “Interfax” agency). The bank has rating from international rating agency, Moody’s of “Ba3” with “Stable” outlook.

The net profit under RAS for 1H 2011 increased by 6.12 times YOY, amounting to 3.3 bn rubles. The credit portfolio for 1H 2011 increased by 7.8% to 212.4 bn rubles.

Etalon Group, with CJSC SSMO LenSpetsSMU as part of it, is one of Russia’s largest and oldest homebuilders and has been operating in the sector since 1987. Between 2000 and 2010, The Group averaged an 11% annual market share in all residential completions in Saint Peterburg’s private sector (excluding individual construction). The Group has recently been actively increasing its market share in the Moscow Metropolitan Area.

Etalon’s project portfolio includes large-scale housing solutions targeted to the upper economy class and lower middle class segments. As of Dec. 31, 2010, the project portfolio included 28 projects with a total area of 3.12 mn sq m in St. Petersburg and Moscow Metropolitan Area.

In 2010, Group revenue stood at 20.3 bn rubles (669 mn USD), with EBITDA reaching 6.9 bn rubles (227 mn USD), and an EBITDA margin of 34%.

Budostal-3 Export Sp. Z o.o. dates back to 1953, when the industrial construction company Budostal3 was founded. In 1992, the employees of the Budostal3 transformed the company into a public entity with private capital. Budostal-3 Export has realized many projects in various locations, including; Krakow, Warsaw, Cologne, Munich, Stuttgart, Dusseldorf, and Mannheim. Budostal-3 Export in cooperation with Etalon Group is building two residential projects in St. Petersburg (bld. 2 of “Jubilee Estate 78A” project – 65.3 thousand sq m, bld. 3 of “Orbita” project – 45.0 thousand sq m).

Landesbank Berlin AG (Germany) is in the TOP 10 largest banks in Germany, with assets of 130 billion Euros. With the corporate and retail banking in Berlin as its core activity, Landesbank Berlin AG is a leader in trade finance with export credit agencies. This is achieved through the efforts of a dedicated department responsible for the development of trade and export finance for CEA and Turkey (50+ employees). There are also several offices in CEA including the Moscow branch which is responsible for the Bank’s promotion in this region.

CONTACT DETAILS:

LenSpetsSMU

Elena Kazakova, Head of Public Relations

+7 (812) 348-21-25, e-mail: Elena.Kazakova@etalongroup.com

Viktor Vasenev, Deputy CFO

+7 (812) 348-09-95, e-mail: Viktor.Vasenev@etalongroup.com

Bank Saint Petersburg

Mitrofan Karpekin, Deputy Director – Head of Trade Finance Department, Director for work with major corporate clients

+7 (812) 332-78-11, e-mail: Mitrofan.V.Karpekin@bspb.ru

Andrey Mironov, Deputy Head of Trade Finance and Documentary Operations, Director for Financial Institutions

+7 (812) 332-77-28, e-mail: Mironov@bspb.ru

Tatiana Vasilyeva, Senior Specialist, Director of External Communications

+7 (812) 332-79-11, e-mail: TVasilyeva@bspb.ru

Budostal-3 Export Sp. Z o.o.

Zdzis?aw Stanis?aw Tragasz, Chairman of the Board

+7 (495) 681-13-27, e-mail: Zdzislaw.Tragasz@budostalexport.pl

Nataliya Kryzhanovskaya, Head of Moscow office

+7 (495) 681-13-27, e-mail: Nataliya.Kryzhanovskaya@budostalexport.pl