ETALON GROUP PLC (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces that it has entered into a framework agreement with Sberbank to provide project financing for Silver Fountain, the Company’s first business-class project in Moscow. A total of RUB 18.8 billion in long-term credit lines are to be provided under the framework agreement, with final repayment due in the first half of 2024.
This is Etalon Group’s first project finance borrowing following the entry into force of changes in Federal Law 214-FZ. Escrow accounts will be used to finance the construction of one of the buildings of the residential complex.
Etalon Group CFO Kirill Bagachenko said:
“Etalon Group has one of the strongest financial positions among Russian developers and has successfully utilised nearly every form of financing instrument in its activities. We are pleased to be among the first in our industry to work with escrow accounts, which has been chosen by the Russian government as the main intermediary tool for market participants.”
Natalya Shemanovskaya, Managing Director, Head of the Department for Real Estate Clients, Department for Work with Major Clients of Sberbank CIB said:
“This deal with Etalon Group confirms that Sberbank is already financing the construction of residential projects where the sale of apartments is conducted through escrow accounts. The bank is actively cooperating with a number of the largest developers on similar projects.”
Silver Fountain is a business-class residential project located on a 7.7-hectare land plot in the Alekseevskiy district of Moscow. The project will consist of five residential and commercial buildings, including a business centre, as well as social infrastructure and parking for 2,100 vehicles. The architectural concept of the project was developed by Sergey Choban’s SPEECH bureau. The complex will have a total NSA of 225 ths sqm. Silver Fountain has already been awarded a platinum certificate by GREEN ZOOM, the Russian real estate industry’s standard for energy efficiency, water conservation and environmental friendliness. Construction of the complex began in July 2017, with sales launched a month later. The project is due to be completed by the end of 4Q 2022.
Etalon Group IR Team
T: +44 20 8123 1328
T: +44 7554 993 032
T: +7 499 918 3134
About Etalon Group
Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of Russia's largest development and construction corporations. The Company focuses on middle class residential real estate in the Moscow and St Petersburg metropolitan areas, where it operates through Etalon Invest and Etalon LenSpetsSMU subsidiaries. With a more than 30-year history, Etalon Group has one of the longest and most successful track records in the Russian real estate industry - since its inception, Etalon Group has commissioned 6.3 million sqm.
Etalon Group's strong reputation among consumers supports its pre-sales business model, which helps the Company to minimise external financing needs for on-going projects while maintaining a secure liquidity position: net debt as of 31 December 2017 was RUB 9.7 billion.
The Company is vertically integrated, which helps it to control costs, quality and timing, as well as to demonstrate best-in-class profitability. Etalon Group employs 5 thousand people, and its nationwide sales and marketing network covers 52 Russian cities.
As of 30 June 2018, Etalon Group's assets comprised 39 projects and a construction and maintenance division, with a total of 2.73 million sqm of unsold net sellable area. Knight Frank valued the Company’s assets at RUB 132,487 million.
For the year ended 31 December 2018, Etalon Group's new contract sales totalled 628 ths sqm, or RUB 68,731 million. Deliveries in 2018 amounted to 479 ths sqm.
The Company recorded revenue of RUB 70.6 billion and EBITDA of RUB 13.2 billion for the year ended 31 December 2017.
Etalon Group’s GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.
4 February 2019