LenSpetsSMU plans equity increase

14.06.2011

A Meeting of CJSC SSMO LenSpetsSMU’s Board of Directors held on June 10 convened an extraordinary General Meeting of shareholders, the agenda of which included an equity increase.

During the meeting, the issue was raised by Chairman of the Board of Directors of the Etalon Group, Vyacheslav Zarenkov, who outlined LenSpetsSMU’s need to strengthen its financial stability and broaden its attractiveness to investors. Mr. Zarenkov went on to invite formal discussion of the placement of additional shares to facilitate an equity increase at the General Meeting of shareholders.

At the meeting, Mr. Zarenkov is to propose increasing the equity of CJSC SSMO “LenSpetsSMU” to 2.1 billion rubles by the placement of an additional 10.5 million shares with a par value of 200 rubles each. Shares are to be offered for placement through closed subscription. The CJSC Management Company “Etalon” will act as purchaser of the shares.

Payment for the shares will be made in cash in rubles; 100% of the offer price of the acquired shares should be paid at the time of their acquisition.

The General Meeting of shareholders of CJSC SSMO “LenSpetsSMU” to discuss the equity increase will be held July 6, 2011.

REFERENCE:

LenSpetsSMU's equity increase is to be implemented primarily with funds from Etalon Group's IPO which was held on the London Stock Exchange (LSE) in April 2011.

Funds received as a result of an equity increase for CJSC SSMO “LenSpetsSMU” are intended for investment in the purchase and financing of new construction projects in St. Petersburg.

As of March 31, 2011 the equity of CJSC SSMO “LenSpetsSMU” is represented by share capital (200 thousand rubles), incremental capital (71 542 thousand rubles), reserve capital (30 thousand rubles) and retained earnings (8 362 825 thousand rubles) totaling 8.4 billion rubles, which accounts for 22% of the company’s total assets.

It is expected that the increase in equity will have a positive effect on the company's credit metrics and increase its attractiveness to investors.

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