Russian homebuilder PIK to raise $500 million in SPO

Construction cranes are seen on top of residential buildings under construction at Russian real estate developer PIK Group’s construction site in Mytischi outside Moscow, Russia, June 3, 2015. REUTERS/Maxim Shemetov/Files

MOSCOW (Reuters) – Russian private homebuilder PIK plans to raise around $500 million in a secondary public offering (SPO) of its existing shares and to use some of the proceeds to buy part of VTB bank’s stake in the company, it said on Wednesday.

Sergei Gordeev, PIK’s chief executive officer, owns a 59.3% stake in the company, while VTB holds 23% and the remaining 17.6% is the free float, PIK’s website shows.

PIK’s unit, LLC PIK INVESTPROEKT, would offer in the SPO around 27 million quasi treasury ordinary shares, or company shares held by a subsidiary. They equate to about 4.1% of the company’s share capital.

The unit would then use up to 11.6 billion roubles ($160 million) from the SPO proceeds to buy part of VTB’s stake in PIK.

The remaining proceeds will help PIK to repay its debt and expand its business, it said, as the homebuilder seeks to become a global technology company focused on modular construction and the property market.

The bookbuilding of the deal, arranged by VTB Capital, J.P. Morgan, Morgan Stanley, SberCIB, Alfa-Bank, ATON, Credit Suisse, SOVA Capital and Gazprombank, starts on Wednesday and is set to close on or about Thursday, PIK said.

Gordeev has said that the SPO was one of the options for the company to increase its free-float.

($1 = 72.5975 roubles)

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