Gruppa Kompaniy PIK : PIK GROUP to buy MORTON GROUP from Sergei Gordeev

31 октября 2016

PIK to become nationalchampion ofdevelopment industry in Russia

Moscow, 31 October 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 will acquire Morton Group from Sergei Gordeev's Horus Real Estate Fund I B.V. and integrate it into PIK Group.

By combining the assets, production capacities and operational units of these two companies under the PIK brand, a national-scale industry leader will be created. Management estimates that in 2017-2018 the new Company's revenue could reach RUB 190 billion, with annual sales volumes of around 1.8 million sq. m. The Company's land bank will amount to 10 million sq. m., while high-tech production capacities for industrial construction will exceed 1.5 million sq. m. The Company will preserve the best qualities of each of the businesses, helping to significantly increase their productivity by optimising processes, and reducing administrative and other costs by up to RUB 10 billion per year.

The transaction encompasses all of Morton Group's assets that were purchased earlier this year by Sergey Gordeev in a private deal. Horus Real Estate Fund I B.V. owned by Mr. Gordeev is selling the assets at the acquisition price. The decision to sell the assets was made after a careful review of Morton Group's business and an analysis of the synergies that could be achieved by combining the two companies.

This transaction is expected to complete before the end of 2016, following receipt of approval from the Federal Antimonopoly Service and completion of all legal procedures. The price and other parameters of this deal will be disclosed in accordance with regulatory requirements governing disclosures by companies with publicly-traded shares. PIK Group will finance the acquisition from a combination of its own funds as well as funds raised from a recent bond placement. PIK Group intends to complete Morton Group's current and announced construction plans in accordance with previously announced timing. All obligations to clients will be fully honoured.

PIK Group's acquisition of Morton Group will have a positive impact on all aspects of both businesses, and will be of benefit to all clients. PIK Group's unique product development, design, neighbourhood planning, strategic development and corporate governance competencies will be complemented by Morton Group's successful experience in advanced production techniques for concrete panels, and its expertise in the construction of utilities infrastructure. The newly formed company will also be able to attract funding on more advantageous terms in order to develop further its expansive land bank and project portfolio.

Commenting on his expectations from the deal, PIK Group President Sergei Gordeev said:

'Today we are creating one of the largest developers in Russia, that will be capable of strengthening the position of the sector as a whole. This is a big responsibility for us, but I am confident that we will show our leadership and live up to the challenge of building high-quality, attractive and innovative housing, allowing us to make happier a growing number of people in Russia.

'This deal opens enormous new growth opportunities, as well as the potential to increase productivity of the new company. Thanks to the increased operating efficiencies we expect to achieve as a result of synergies between the two businesses, we intend in the near future to become the industry leader in terms of operating results and market capitalization.'

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PIK Group's Management will host a conference call for investors and analysts followed by a Q&A session.

Conference Call Dial-In Details:

Date: Monday, October 31, 2016
Time: 14:00 Moscow / 11:00 London / 6:00 New York
Title: Acquisition of Morton
Conference ID: 6080939
Domestic line: +7 495 213 1767
UK international tel.: +44 203 043 2002

About PIK Group

PIK Group was founded in 1994 and is a leading, publicly traded, Russian developer of large-scale projects in Moscow, the Moscow region and other regions of Russia. Since its foundation, the company has built nearly 16 million sq. m. of residential real estate (over 270,000 apartments). The Russian Federation Government has included PIK Group in its list of systemically-important companies for the Russian economy.

World Finance Magazine named PIK Group the best residential real estate developer in Europe. Expert Rating Agency has given the company an A+ credit rating with a stable outlook.

About Morton Group

Morton Group specialised in the construction of large-scale residential neighbourhoods in Moscow and neighbouring parts of the Moscow region, which include all necessary social infrastructure and utilities, providing comfort, education and leisure for residents. The company is regularly ranked among the top three companies in Russia by construction volumes, and is the largest in Moscow and the surrounding metropolitan area. Morton Group's portfolio includes active projects in Moscow and the Moscow region with a total of 5.3 million sq. m. due to be completed over the next 5-7 years (excluding the group's sizeable landbank)

PIK Group contacts:

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