Alfa-Bank and LenSpetsSMU effect first Russian deal on import and export financing the construction of a multi-family residential building

20.09.2010

Alfa-Bank and LenSpetsSMU (part of Etalon Group) have effected the first deal in Russia for import and export financing for the construction of a multi-family residential building with a consortium including; German banks ‘IKB Deutsche Industriebank AG’ and ‘Landesbank Berlin AG’, and Budostal-3 Export, a Polish construction company.

One of the apartment blocks of "Jubilee Quarter 78A" project, under construction by LenSpetsSMU in the Primorsky District of Saint-Petersburg, has become the object of financing. The total area of the building exceeds 65 thousand square meters, including a covered car park with 244 spaces. The building is scheduled for commissioning in August 2012.

The deal structure outlines 85% of the construction costs to be financed with the borrowed funds on a four year term payment term. The borrowed funds are to be paid back in 4 installments, the first of which will be settled six months after the building’s completion. The amount of credit provided by Alfa-Bank amounts to 39 million Euros, against total construction costs exceeding 44 million Euros.

A distinctive feature of such an arrangement is the availability of guarantees on financing provided by one of the European export credit agencies - KUKE SA (Poland), which allows for significant reductions in the cost of borrowing and increases in maturity terms.

Tatiana Loginova, Corporate Business Director at the Saint-Petersburg branch of Alfa-Bank, commented: "Some deals on import and export financing of the construction of commercial and industrial projects between banks and construction companies have occurred before. However, this is the first time that we have seen a deal on this scale, especially related to the financing of a multi-family residential building”.

Vyacheslav Zarenkov, the Chairman of the Board of Directors of the Group of Companies Etalon said, "LenSpetsSMU and Alfa-Bank really appreciate both the progress achieved and the close cooperation between our organizations. With this deal LenSpetsSMU has once again shown commitment to innovative solutions in the sphere of finance, while Alfa-Bank has demonstrated its flexibility and expertise in complex credit product structuring".

REFERENCE:

Alfa-Bank was founded in 1990. Alfa-Bank is a universal bank providing all major banking transactions in the financial services market, including private and corporate client services, investment banking, trade financing and asset management.

Alfa-Bank is the largest private bank in Russia in terms of assets, equity and customer accounts. Based on the results of the first half of 2010 according to the financial records (IFRS) checked by the auditors the combined assets of Alfa-Bank, including OJSC Alfa-Bank, subsidiary banks and financial companies, comprised 22.6 billion US dollars, aggregate capital - 2.9 billion US dollars, total loan portfolio - 15.1 billion US dollars. The net profit of shareholders comprised 295 million U.S. dollars.

As of September 1, 2010 Alfa-Bank provides services for approximately 39 thousand corporate clients and 4.3 million physical entities. 331 main and branch offices are established in Moscow, Russian regions and abroad, including a subsidiary bank in the Netherlands and financial subsidiaries in the USA and the United Kingdom.

Etalon Group, with CJSC SSMO LenSpetsSMU as a part of it, was founded in 1987. The Group consists of over 60 enterprises implementing all stages of investment and construction process,. The group specializes in development and design, site engineering preparation, construction materials production and the construction, sale and operation of real estate. Since its inception, the Etalon Group has commissioned over 120 residential and commercial buildings with a total area of over 2.8 million square meters, proving its position as a leader in residential estate commissioning in Saint-Petersburg throughout the past 10 years.


According to IFRS records, the Group's 2009 revenues increased by 39.5% compared to the previous year and comprised 18.2 billion RUR. Net profit increased by 1.9 times and reached 3.6 billion RUR. EBITDA grew to 6.2 billion RUR (59.4% up vs. 2008). Own funds increased by 2.1 times from 3.0 billion RUR to 6.4 billion RUR within one year.


Since 2006 the largest rating agency ‘Standard & Poor's’ has repeatedly rated LenSpetsSMU at 'B' level with “stable” outlook. Currently it holds the highest rating among construction companies in both Russia and Eastern Europe.

CONTACT DETAILS:

Natalia Menzel, Head of Public Relations

tel. (812) 348-21-25, e-mail: menzel_n@lenspecsmu.ru

Viktor Vasenev, Deputy CFO

tel. (812) 348-09-95, e-mail: vasenev_v@lenspecsmu.ru