Russia's first publicly listed real-estate developer becomes the national sectorleader.
Moscow, 20 December 2016. PIK Group (LSE: PIK), a leading publicly-traded Russian developer of large-scale projects in Moscow, the Moscow region and other parts of Russia, announces that it has completed the acquisition of Morton Group from Sergei Gordeev’s Horus Real Estate Fund I B.V.
By combining the assets, production capacities and operational units of these two companies under the PIK brand, a national-scale industry leader has been created. For the first time in history of Russian real-estate development, the leading player in the industry is a public company with an efficient and transparent business model.
The acquisition of Morton Group's real-estate business marks an important step in the Company's development strategy, which aims to increase operational efficiency and market capitalisation. Management expects that in 2017-2018 the Company's revenue could reach RUB 200 billion, with annual sales volumes of around 2 million sq. m., while high-tech production capacities for industrial construction will exceed 1.0 million sq. m. The combined land bank will amount to 15 million sq. m.
During first phase of the integration, PIK Group has optimised a number of business process and formed a new organisational structure of the combined company. At the moment combined economy from the integration has amounted to RUB 4.5 billion per year with a target of RUB 10 billion per year to be reached by the end of 2017.
In addition, PIK Group has placed bonds for RUB 10 billion and signed a loan agreement with one of the biggest Russian banks for additional RUB 10 billion loan at a more comfortable interest rate, which together will allow to refinance 85% of Morton Group's expensive short-term debt.
Completion of the integration project and the launch of work as a single PIK brand is planned by the end of 1Q 2017.
PIK Group President Sergey Gordeev said: “The synergies from the combined company will allow us to become not just stronger and more efficient, but will help fuel the qualitative development of the sector as a whole. To increase buyers' trust in new-build real-estate, we need to constantly raise the quality of construction and high level of client service. This is in part the responsibility of sector leaders, and we see our role being to constantly raise the bar. For this reason we continue to invest more in quality of our projects and client services.”
Tel: +7 (909) 913 14 70
Tel: +7 495 505 97 33 ext. 3785