Successful Placing in Etalon Group

28 November 2017

Not for publication, distribution or release directly or indirectly, in whole or in part, in or into the United States, Australia, Canada, Japan, Russia or Republic of South Africa or in any other jurisdiction in which offers or sales would be prohibited by applicable law.

The information contained within this announcement is deemed to constitute inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) no. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Placing of 28 Million Global Depositary Receipts (“GDRs”) in Etalon Group PLC

Etalon Group PLC (the “Company”, London Stock Exchange ticker: ETLN) has been informed by its shareholders Dehus Dolmen Nominees Limited1 (“Baring Vostok”) and Strata Investments Limited representing the Zarenkov Family, together the “Selling Shareholders”, that following the Company’s press release issued on 28 November 2017, they have successfully sold 28 million GDRs  (the “Placing GDRs”) of the Company. Each GDR represents an interest in one ordinary share of GBP 0.00005 in the share capital of the Company.

The sale, carried out by way of an accelerated bookbuild (the “Placing”), was priced at US$3.4 per Placing GDR and will be settled by delivery of the Placing GDRs and payment of the consideration to the Selling Shareholders on 1 December 2017. Goldman Sachs International and J.P. Morgan Securities plc are acting as Joint Global Coordinators and Bookrunners (the “Joint Global Coordinators”) and VTB Capital plc is acting as Joint Bookrunner (the "Joint Bookrunner") for the Placing.

The Placing GDRs represent approximately 9.5% of the ownership interest in the share capital of the Company. Following the Placing, the Zarenkov Family and Baring Vostok will have a combined remaining ownership interest in the Company of approximately 36.4%, and the free float will increase to approximately 61.4%. Baring Vostok will retain approximately 5.7% ownership interest in the Company and the Zarenkov Family will retain approximately 30.7% ownership interest in the Company.

The Zarenkov Family (including through Strata Investments Limited) and Baring Vostok have agreed to a 90-day lock-up period with respect to sales of additional shares or GDRs of the Company, subject to certain customary exceptions (including waiver by the Joint Global Coordinators).

The distribution of this announcement and the offer and sale of the Placing GDRs in certain jurisdictions may be restricted by law. The Placing GDRs may not be offered to the public in any jurisdiction in circumstances which would require the preparation or registration of any prospectus or offering document relating to the Placing GDRs in such jurisdiction. No action has been taken by the Selling Shareholders or Joint Global Coordinators and Joint Bookrunner or any of their respective affiliates that would permit an offering of the Placing GDRs or possession or distribution of this announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Any investment decision to buy securities in the Placing must be made solely on the basis of publicly available information. Such information is not the responsibility of and has not been independently verified by the Selling Shareholders or Joint Global Coordinators and Joint Bookrunner or any of their respective affiliates.

This announcement is not for publication, distribution or release, directly or indirectly, in or into the United States of America (including its territories and dependencies, any State of the United States and the District of Columbia), Australia, Canada, Japan, Russia or Republic of South Africa or any other jurisdiction where such an announcement would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Neither this document nor the information contained herein constitutes or forms part of an offer to sell or the solicitation of an offer to buy securities in the United States, Australia, Canada, Japan, Russia or Republic of South Africa or any other jurisdiction in which such an offer or solicitation is unlawful. There will be no public offer of any securities in the United States or in any other jurisdiction.

The Placing GDRs have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the placing or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

In member states of the European Economic Area (“EEA”) which have implemented the Prospectus Directive (each, a “Relevant Member State”), this announcement and any offer if made subsequently is directed exclusively at persons who are €˜qualified investors’ within the meaning of the Prospectus Directive (“Qualified Investors”). For these purposes, the expression €˜Prospectus Directive’ means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in a Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression €˜2010 PD Amending Directive’ means Directive 2010/73/EU. In the United Kingdom this announcement is directed exclusively at Qualified Investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) who fall within Article 49(2)(A) to (D) of the Order, and (iii) to whom it may otherwise lawfully be communicated.

This announcement is not an offer of securities or investments for sale nor a solicitation of an offer to buy securities or investments in any jurisdiction where such offer or solicitation would be unlawful. No action has been taken that would permit an offering of the securities or possession or distribution of this announcement in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required to inform themselves about and to observe any such restrictions.

Joint Global Coordinators and Joint Bookrunner are authorised by the Prudential Regulation Authority ("PRA") and regulated in the United Kingdom by the PRA and Financial Conduct Authority, and are acting exclusively for the Selling Shareholders in connection with the Placing and will not be responsible to anyone other than the Selling Shareholders for providing the protections offered to their clients, nor for providing advice in relation to the Placing or any transaction, matter or arrangement referred to in this announcement.

In connection with the offering of the placing shares, Joint Global Coordinators and Joint Bookrunner or any of their respective affiliates may take up a portion of the Placing GDRs as a principal position and in that capacity may retain, purchase or sell for their own accounts such securities.  In addition they may enter into financing arrangements and swap with investors in connection with which they may from time to time acquire, hold or dispose of the Placing GDRs.  They do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

This and other recent announcements are available on the Etalon Group website:

Etalon Group IR Team 

T: +44 20 8123 1328


Sam VanDerlip
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 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 5.5 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 2016 was RUB 7.8 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 31 December 2016, Etalon Group's portfolio comprised 35 projects, with a total of 2.82 million sqm of unsold net sellable area. JLL valued this portfolio at RUB 115,818 million.

For the year ended 31 December 2016, Etalon Group's new contract sales totalled 496 ths sqm, or RUB 47,443 million. Deliveries in 2016 amounted to 420 ths sqm.

The Company recorded revenue of RUB 49.0 billion and EBITDA of RUB 7.3 billion for the year ended 31 December 2016.

Etalon Group’s GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.


1 The Ordinary Shares held by Dehus Dolmen Nominees Limited are beneficially owned by Baring Vostok Private Equity Fund IV and Baring Vostok Fund IV Supplemental Fund, L.P. (the “BV Funds”). The ultimate general partner of the BV Funds is Baring Vostok Fund IV Managers Limited which is advised by Baring Vostok Capital Partners Group Limited.