RDF acquires 30% stake in Kvartstroy — deal details and key investment players.
RDF bought 30 percent of the shares of the Kvartstroy holding
The company "Kvartstroy" has a new shareholder. Russia Development Fund (RDF) acquired 30 percent of the company's shares, said Maxim Kunin, managing partner of the Investment Management Group. According to him, the company issued an additional share issue, which the fund purchased.
The information about the deal was confirmed by Kvartstroy's general manager Alexander Delis. D. Stanaford, who is the managing partner of CB Richard Ellis, also knows about the completed deal; that company acted as a consultant. D. Stanaford asserts that this is the first transaction on the market that is not related to distressed assets.
The parties prefer not to disclose the total value of the transaction. Kunin notes that the deal is market-based, since the fund began negotiations to enter the capital before the Russian crisis.
Currently Kvartstroy's portfolio includes about 3 million sq. m of commercial and residential real estate at various stages of completion in Moscow, Volgograd, Kazakhstan and Nizhny Novgorod. Of these, 250,000 sq. m are already under construction.
Mikhail Gets, managing partner of "Novoe Kachestvo", values the entire Kvartstroy firm at approximately $500 million. It follows that for 30 percent Russia Development Fund could have paid more than $150 million.
According to Delis, all funds received from the stake will be spent on developing Kvartstroy. The partners say that until 2010 they intend to invest about 120 million euros in the company's projects.
Kunin explains the choice of partner by saying that, unlike other developers, Kvartstroy has considerable survival experience: "It survived the 1998 crisis in Russia and the 2007 crisis in Kazakhstan." And A. Delis states that with RDF's arrival, thanks to its shareholders the company is able to attract credit resources on more favorable terms.
It was previously stated that Russia Development Fund intended to help raise more than €450 million. Later Kunin said that approximately €180 million was actually raised.
Today Investment Management Group is not disclosing the amount of funds raised. The main investors in the fund are Aberdeen Indirect Partners II, Immoeast, and the European Bank for Reconstruction and Development (approximately €75 million).
The fund's first deal was the acquisition of 25% of the St. Petersburg holding "Okhta Group" (investment portfolio — about 600,000 sq. m).
Among the projects built by "Kvartstroy" are a residential complex and business center in Almaty (Kazakhstan), "Kvartal Yevropeyskiy" in Nizhny Novgorod, and the residential complex "Admiral Town" in Volgograd. B+ class business centers are being developed in Nizhny Novgorod, Moscow and Volgograd. Holding's website: http: //kvartstroy. ru