Not for publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Canada, Australia or Japan, or in any other jurisdiction in which such publication or distribution would be prohibited by applicable law or regulation.

Nothing in this announcement should be interpreted as a term or condition of the offering referred to herein. No decision to purchase, subscribe for, otherwise acquire, sell or otherwise dispose of any securities referred to herein should be made on the basis of this announcement and must only be made on the basis of the information contained in the offering memorandum once published. Copies of the offering memorandum will, following publication, be available on the Company’s website

Etalon Announces Rights Offering and Board of Directors Meeting Results

19 April 2021

ETALON GROUP PLC (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces the results of a Board of Directors meeting held on 16 April 2021, at which the Board of Directors reviewed and approved an offering  of up to 88,487,391 ordinary shares of the Company (“New Shares”)representing 30% of the Company’s total issued ordinary shares (the “Offering”).

The Offering will consist of an offering of rights to subscribe for New Shares to eligible existing holders of the Company’s equity securities (the “Rights Offering”) followed by a marketed offering to institutional investors of any New Shares not taken up during the Rights Offering in the form of global depositary receipts (“GDRs”) (the “Rump Offering”).

The subscription price for each of the Rights Offering and the Rump Offering will be USD 1.7 per New Share (or GDR).

The Offering will be made on the terms and conditions set out in an offering memorandum expected to be dated on or about 26 April 2021 and made available to eligible participants in the Offering (the “Offering Memorandum”).

The net proceeds from the Offering will be used for the acceleration of the Company's investment programme and business expansion. In accordance with its strategy, Etalon Group plans to accelerate land bank replenishment and considers a pipeline of new project acquisitions in 2021 of total net sellable area of 3.5 million sqm. Details of the Company’s investment programme and pipeline of potential projects will be disclosed in the Company’s 1Q 2021 operating results presentation and the Offering Memorandum.

The Company understands that Sistema group, one of its largest investors, intends to convert the GDRs held by it into ordinary shares for the purposes of facilitating the execution of the Offering (within the Company's existing block listing of GDRs currently admitted to the Official List of the Financial Conduct Authority and to trading on main market of the London Stock Exchange) using the headroom in the GDR facility created by such conversion.

The Company expects that Sistema group will participate in the Rights Offering pro-rata to its holding as well as place an order for further GDRs in the Rump Offering, including any which remain unsold to other investors following the book-building process described below.

Rights Offering

In the Rights Offering, the Company will offer rights (the “Rights”) to subscribe for New Shares to its existing holders of ordinary shares as of 5 p.m. (London time) on 26 April 2021 (such holders, the “Record Date Shareholders”). The Rights will not be listed or tradeable on the London Stock Exchange or otherwise.

Holders of GDRs as of 10 p.m. (London time) on 26 April 2021 who meet certain eligibility criteria (“Eligible GDR Holders”) will be able to participate in the Rights Offering through the GDR facility administered by The Bank of New York Mellon, as depositary. Payment for GDRs will be available in US dollars only.

Eligible GDR Holders shall consist of (1) in the United Kingdom, qualified investors as defined in Regulation (EU) 2017/1129 (the “EU Prospectus Regulation”), as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018; (2) in the European Economic Area, qualified investors as defined in the EU Prospectus Regulation; (3) in the United States, qualified institutional buyers as defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”); and (4) in other jurisdictions, persons to whom the Rights Offering may otherwise lawfully be made.

Rump Offering

The Rump Offering will be conducted by way of a marketed offering to institutional investors which will be subject to an accelerated book-building process.

Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc are acting as Joint Global Coordinators and Joint Bookrunners in connection with the Offering.

Upon issue, the GDRs will be tradeable on the London Stock Exchange and the Moscow Exchange pari passu with the existing GDRs.

Indicative Timetable[1]

Record Date for Shareholders

5 p.m. on 26 April 2021

Record Date for GDR Holders

10 p.m. on 26 April 2021

Rights Offering Letter circulated to Record Date Shareholders; Commencement of Rights Offering

9 a.m. on 27 April 2021

Last Date for the Eligible GDR Holders to Subscribe

5 p.m. on 11 May 2021

Last Date for the Record Date Shareholders to Subscribe

5 p.m. on 12 May 2021

Rump Offering Period

Thereafter at the Company’s discretion

This and other recent announcements are available on the Etalon Group website: https://www.etalongroup.com/investor-relations/investor-news/

Contact Information

Etalon Group

IR Team

T: +44 (0) 20 8123 1328

E: ir@etalongroup.com

EM

Sam VanDerlip

T.: +44 207 002 7859

E: vanderlip@em-comms.com

About Etalon Group

Founded in 1987, Etalon Group is one of the largest development and construction companies in Russia. The Company focuses on middle class residential real estate in the Moscow and St Petersburg metropolitan areas. 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 foundation, Etalon Group has commissioned 7.5 million sqm of real estate.

The Company is vertically integrated, which helps it to control costs, quality and timing, as well as maintain best-in-class profitability. Etalon Group employs over 5,000 people, and its nationwide sales and marketing network covers 59 Russian cities.

In 2019, Etalon Group acquired and consolidated 100% in Leader-Invest, one of Moscow’s largest residential developers by size of land bank and number of projects currently available for sale.

Etalon Group’s total assets comprise 20 projects under development, unsold inventory at completed residential complexes and commercial properties, with total unsold NSA of 2.8 million sqm, as well as construction and maintenance division. Colliers International valued the Company’s total assets at RUB 204 billion as of 31 December 2020.

In 2020, Etalon Group’s new contract sales totalled 538 ths sqm, or RUB 79.9 billion. Deliveries in 2020 amounted to 540 ths sqm.

The Company’s revenue in 2020 amounted to RUB 78.7 billion, with EBITDA of RUB 12.6 billion.

Etalon Group’s GDRs have traded on the Main Market of the London Stock Exchange since 20 April 2011 and on the Level 1 quotation list of Moscow Exchange since 31 January 2020 under the ticker ETLN.

The information contained in this announcement does not constitute or form part of any offer for sale or subscription of or solicitation of any offer to buy or subscribe for any securities in the United States, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Under the Securities Act securities may not be offered or sold in the United States absent registration or an exemption from registration. Etalon Group does not intend to register any portion of any offering of securities in the United States or to conduct a public offering of any securities in the United States.

This announcement has been issued by and is the sole responsibility of the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its accuracy or completeness. The information in this announcement is subject to change.

This announcement is not a prospectus but an advertisement. Neither this announcement nor anything contained in it shall form the basis of, or be relied upon in conjunction with, any offer or commitment whatsoever in any jurisdiction. Investors should not acquire any securities referred to in this announcement except on the basis of the information contained in the Offering Memorandum to be published by the Company in connection with the Offering.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any 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.

This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for, or otherwise invest in, securities to any person in the United States, Australia, Canada, Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to herein may not be offered or sold in the United States unless registered under the Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. The proposed offer and sale of securities referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada or Japan. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. There will be no public offer of the securities referred to herein in the United States, Australia, Canada, Japan, or elsewhere.

In any member state of the European Economic Area, this announcement and any offer if made subsequently is, and will be, directed only at persons who are “qualified investors” within the meaning of Article 2(e) of Regulation (EU) 2017/1129 and amendments thereto.

In the United Kingdom, this announcement is only being distributed to and is directed at “qualified investors” within the meaning of Article 2(e) of Regulation (EU) 2017/1129, as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018, (a) having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act (Financial Promotion) Order 2005, as amended (the “Order”); (b) who are high net worth entities described in Article 49(2) (a) to (d) of the Order; or (c) other persons to whom they may lawfully be communicated (all such persons together being referred to as “Relevant Persons”). Any investment or investment activity to which this announcement relates will only be available to and will only be engaged in with Relevant Persons. Any person who is not a Relevant Person should not act or rely on this announcement or any of its contents.

This announcement may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company’s business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made.

Each of the Company, Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc and their respective affiliates as defined under Rule 501(b) of Regulation D of the Securities Act (“affiliates”), expressly disclaims any obligation or undertaking to update, review or revise any forward looking statement contained in this announcement whether as a result of new information, future developments or otherwise, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of the Company to proceed with the Offering or any transaction or arrangement referred to therein.

Any purchase of any securities in the proposed Offering should be made solely on the basis of information contained in the Offering Memorandum which may be issued by the Company in connection with the Offering. The information in this announcement is subject to change. Before purchasing any securities in the Offering, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Offering Memorandum if published. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement shall not form the basis of or constitute any offer or invitation to sell or issue, or any solicitation of any offer to purchase any securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

You should not base your financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making investments should consult an authorised person specialising in advising on such investments. This announcement does not form part of or constitute a recommendation concerning any offer. The value of securities can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of a possible offer for the person concerned.

None of Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc or any of their respective affiliates or any of their or their affiliates’ directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Accordingly, each of Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc, and any of their respective affiliates and any of their or their affiliates’ directors, officers, employees, advisers or agents expressly disclaims, to the fullest extent possible, any and all liability whatsoever for any loss howsoever arising from, or in reliance upon, the whole or any part of the contents of this announcement, whether in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

Each of Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc is acting exclusively for the Company and no-one else in connection with the proposed Offering. They will not regard any other person as their respective clients in relation to the proposed Offering and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the proposed Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein. Each of Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plcis authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority in the United Kingdom.

In connection with the Offering, Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc and any of their respective affiliates, may take up a portion of the GDRs as a principal position and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such GDRs and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in the Offering Memorandum, once published, to the GDRs being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc and any of their respective affiliates acting in such capacity. In addition, Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc and any of their respective affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which they may from time to time acquire, hold or dispose of GDRs. None of Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital plc nor any of their respective affiliates intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Solely for the purposes of the product governance requirements contained within: (a) Regulation (EU) 600/2014 as it forms part of domestic law in the United Kingdom by virtue of the EUWA (“U.K. MiFIR”); and (b) the FCA Handbook Product Intervention and Product Governance Sourcebook (together, the “U.K. MiFIR Product Governance Rules”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of U.K. MiFIR) may otherwise have with respect thereto, the New Shares and the GDRs have been subject to a product approval process, which has determined that the New Shares and the GDRs are: (i) compatible with an end target market of investors who meet the criteria of eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in U.K. MiFIR; and (ii) eligible for distribution through all distribution channels as are permitted by U.K. MiFIR (the “U.K. Target Market Assessment”). Notwithstanding the U.K. Target Market Assessment, distributors should note that: the price of the New Shares and/or GDRs may decline and investors could lose all or part of their investment; the New Shares and the GDRs offer no guaranteed income and no capital protection; and an investment in the  New Shares and/or the GDRs is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The U.K. Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering. Furthermore, it is noted that, notwithstanding the U.K. Target Market Assessment, Renaissance Capital, Sberbank CIB (UK) Limited and VTB Capital will only procure investors who meet the criteria of professional clients and eligible counterparties for the purposes of the U.K. MiFIR Product Governance Rules.

For the avoidance of doubt, the U.K. Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the U.K. MiFIR Product Governance Rules; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Shares and/or the GDRs.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Shares and/or GDRs and determining appropriate distribution channels.


[1] All timings are London time.