LSR Group is selling its cement plant in Slantsy, the Leningrad region to Eurocement Group. The parties have signed preliminary sales agreement as Eurocement Group obtained approval from Federal Antimonopoly Service of the Russian Federation (FAS). The control over the plant operations is expected to be transferred in December 2014
This deal is part of implementation of LSR Group strategy to focus on projects with highest returns on invested capital and fast growing real estate development business thus maximizing value for shareholders.
LSR Group will use most of the proceeds to reduce its debt and make it 100% ruble based by the end of the year. Net Debt/EBITDA will be reduced to less than 1.0.
We also expect positive effect of the deal on EBITDA and Net profit.
Notes to Editors:
OJSC LSR Group is a real estate development and building materials company founded in 1993 and operating in a number of complementary market segments. Its core business areas are production of building materials, real estate development and panel construction. LSR Group's main operations are located in St. Petersburg, Moscow and Yekaterinburg. As of 31 December 2013 (according to DTZ), the net sellable area of the projects in LSR Group's real estate portfolio is equal to 7.8m m2 with the market value of RUB 117bn. In 2013, the sales revenue of LSR Group amounted to RUB 65,316m (IFRS). LSR Group is a public company, with its GDRs traded on the London Stock Exchange and its ordinary shares traded on Moscow Exchange.
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