24 June 2019

Etalon Gains Control of ZIL-Yug Project

ETALON GROUP PLC ("Etalon Group" or the "Company"), one of Russia's largest and longest-established development and construction companies, announces that its subsidiary Leader-Invest JSC ("Leader-Invest") has increased to 100% its stake in OJSC Razvitie ("Razvitie"), which holds the development rights for the ZIL-Yug project, the largest mixed-use real estate development project in Moscow.

Under an agreement between Etalon Group and LSR Group, the 50% stake in Razvitie previously owned by LSR Group was sold to Leader-Invest, a subsidiary of Etalon Group.

Leader-Invest previously held a 50% equity stake in Razvitie, and as a result of the new agreement will now own 100% of Razvitie. Etalon Group, which owns a controlling stake in Leader-Invest, has consequently gained control of the ZIL-Yug project and will act as its sole developer.

ZIL-Yug is one of the largest redevelopment projects in Moscow. The project calls for the construction of more than 1.2 million sqm of real estate on 57 hectares of land, including business and comfort class housing as well as commercial, office and social facilities. ZIL-Yug boasts a unique location and scenic views, and for the most part is surrounded by the Moscow river embankment. The project has excellent transport accessibility and is well situated near two major highways, the Third Ring Road and Prospekt Andropova. The Zil metro station is within walking distance, and residents will be able to reach Moscow's historic centre in only 25 minutes by public transport and around 30 minutes by car. 

Etalon Group CEO Gennadiy Shcherbina said:

"Thanks to this agreement signed with LSR Group, Etalon Group has further increased its presence in Moscow, which is a strategically important region for the Company. We have gained control of a project with high potential, and one that will allow us in the coming years to develop a project of more than 1.2 million sqm.

"Together with the Galactica project in St Petersburg, ZIL-Yug will be a cornerstone project for Etalon Group, which will enable us to embark on a new stage in the development as one of the largest players in Russia's two major metropolitan areas - Moscow and St Petersburg.

"Etalon Group has vast experience successfully implementing large-scale development projects in both regions, including Jubilee Estate and Tsar's Capital in St Petersburg and Emerald Hills in the Moscow region. I therefore have full confidence in our ability to execute ZIL-Yug with equal success, creating a unique residential environment for future residents of the new district, while delivering a good return on invested capital for shareholders of Etalon Group."

Head of Etalon Group Moscow Operations Maxim Berlovich added:

"Following the acquisition of Leader-Invest in February, the combined team in Moscow has already managed to formulate a common concept for comprehensive development of the ZIL-Yug project, and Etalon Group's competencies and experience will ensure its high-quality implementation."

This and other recent announcements are available on the Etalon Group website: http://www.etalongroup.com/investors/news 

Etalon Group IR Team

T: +44 20 8123 1328

E: info@etalongroup.com

EM

Sam VanDerlip

T: +44 7554 993 032

T: +7 499 918 3134

E: vanderlip@em-comms.com

About Etalon Group

Founded in 1987, 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 its 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 traditionally conservative approach managing its financial position, solid cash generation and strict working capital management have enabled the company to maintain a secure liquidity position: net cash as of 31 December 2018 was RUB 2.2 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 over 5,000 people, and its nationwide sales and marketing network covers 58 Russian cities.

In February 2019 Etalon Group acquired 51% of the shares of Leader-Invest, one of Moscow's largest residential developers in terms of land bank and number of projects currently available for sale.

As of 31 December 2018, Etalon Group's assets comprised 76 projects, including 40 Leader-Invest projects and a construction and maintenance division, with a total of 3.4 million sqm of unsold net sellable area. Knight Frank valued the Company's total assets under management at RUB 186,908 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 72.3 billion and EBITDA of RUB 5.7 billion for the year ended 31 December 2018.

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