13th Dec 2006 07:02
Mirland Development Corporation PLC13 December 2006 THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN (INCLUDING THEIR TERRITORIES AND POSSESSIONS) MIRLAND DEVELOPMENT CORPORATION plc A real estate development company in Russia MirLand Announces Successful Capital Raising of £143.4 million and Commencement of Conditional Dealings (LONDON, 13 December 2006) - MirLand Development Corporation plc (the "Company"or "MirLand"), announces the successful placing of its ordinary shares ofUS$0.01 each ("Ordinary Shares") in its Initial Public Offer (the "Offer") andthe commencement of conditional dealings of those shares on the London StockExchange. - The offer price has been set at 478 pence per Ordinary Share (the "Offer Price"), giving gross proceeds of the Offer of approximately £143.4million (US$282.7 million), before exercise of the over-allotment option. - The Offer consists of 30 million new Ordinary Shares, with anover-allotment option equal to 15% of the size of the Offer (the "Greenshoe").Following the Offer and assuming no exercise of the Greenshoe, the free float ofthe Company will be approximately 30%. - Credit Suisse and Merrill Lynch International have acted as JointGlobal Co-ordinators and Joint Bookrunners to the Offer and Credit Suisse asNominated Adviser and Broker to the Company. - Conditional dealings are expected to commence on the London StockExchange at 8:00am today (13 December) under the ticker symbol MLD. - It is expected that admission of the Ordinary Shares to trading onthe London Stock Exchange's AIM market ("AIM") ("Admission") will becomeeffective and unconditional dealings will commence at 8:00am on 18 December2006. - Based upon the Offer Price, the market capitalisation of the Company,assuming no exercise of the Greenshoe, based on the Offer Price, will be £478million upon Admission of the Ordinary Shares to AIM. MirLand is an internally managed real estate development company operating inRussia, which was incorporated in 2004 in Cyprus. The Company has a strongmanagement team, comprising local professionals and international real estateexperts. MirLand is also one of the few developers in Russia to buildinternational quality commercial and residential properties employing Westernbusiness practices. MirLand offers investors an attractive portfolio of eight development projectstotalling over 1.2 million sqm (including the acquisition of a 92,000 sqmskyscraper development in Moscow, which is in the process of completion) inMoscow, St. Petersburg, Yaroslavl and Saratov, as well as a strong pipeline ofseven projects under negotiation in Moscow, Novosibirsk, Tomsk andRostov-on-Don. The Company believes it will benefit from the very favourablemacroeconomic environment of the Russian real estate market. MirLand's properties were valued by Cushman & Wakefield, an independentinternational real estate appraiser and one of the leading valuers in Russia, atUS$853.3 million, as at 30 September 2006. Joint ownership of several of theseassets means that the portion of attributable value to the Company was US$764.6million. The Adjusted Net Asset Value of the Company before the Offer isUS$671.1 million, following the Offer is US$933.3 million, before exercise ofthe over-allotment option. Proceeds of the Placing The Company intends to use the net proceeds of the Offer to: • progress the development of its existing Portfolio; • pay the balance of consideration required to purchase the Moscow skyscraper project; • acquire some of the pipeline of property interests; and • fund the Company's working capital requirements. The Company plans to invest the net proceeds from the Offer over the next twelveto eighteen months. Business model and strategy MirLand's strategy is to focus on developing (a) high quality commercial andresidential real estate assets in Moscow and St. Petersburg and (b) commercialprojects in other large Russian cities. The Company aims to maximise shareholdervalue, while maintaining geographical and property type diversification. TheCompany's principal strategy is to sell the residential properties it developsand lease the commercial properties it develops. The Company develops real estate assets to international quality standards,tailored to fit in with the surrounding environment and local preferences, bothin terms of design and development. Such real estate assets are still relativelyuncommon in Russia and the Company believes it is currently one of the fewdevelopers operating in Russia with the expertise and the experience to maintainsuch high quality standards. Its local presence enables it to identify andsuccessfully execute projects, supported by relationships with key players inmajor Russian cities, including contractors, planning authorities, marketing andappraisal agencies and others. The Company believes that local management's expertise, procedural familiarityand operational experience will assist the Company in overcoming barriers thatinternational entrants to the Russian real estate market ordinarily face. As a subsidiary of three publicly traded companies, the Company operates in atransparent manner to meet reporting and other regulatory requirements. TheCompany believes this provides it with a competitive advantage in Russia wheregeneral business practices are still evolving. Management The Company is internally managed by a team of senior, experiencedprofessionals, many with Russian backgrounds and familiarity with theenvironment, with others having significant real estate expertise gained fromother international markets. Management has an established track record, with ahistory of successful and timely execution of large-scale real estatedevelopment projects across multiple geographic regions. The management teamenables the Company to apply expertise at all stages of development, from theidentification and acquisition of sites to the marketing and the management ofcommercial properties. MirLand will benefit from the real estate experience of its Board members andSenior Management. Moshe Morag, the Company's CEO and Yehuda Marom, Chief ofEngineering have significant real estate experience at IBC, a subsidiary of theFishman Group and have developed and managed numerous retail centres acrossIsrael, pioneered tailor made developments for Israeli high tech and mobilecarrier firms and developed and managed large scale residential properties inIsrael, Europe and North America. Support of the Fishman Group MirLand was formed by combining the Russian real estate development operationsof three established Israeli real estate subsidiaries of the Fishman Group. TheFishman Group began investigating the Russian real estate opportunity in 2004and MirLand acquired its first real estate asset in 2005. MirLand is stillcurrently controlled by the Fishman Group (70% ownership post IPO). The Fishman Group has significant interests outside of Israel with, as at 31December 2005, approximately 1.2 million square metres of its yielding portfolio(approximately 30 per cent.) outside of Israel, excluding those held by MirLand.In addition, the Fishman Group has extensive public market expertise through itscontrol of three public companies, JEC, IBC and Darban. Commenting on the successful placing, Nigel Wright, non-executive Chairman,said: "We are delighted to have successfully completed the offer and to be able towelcome a varied international institutional investor base to the Company. Welook forward to capitalising on the expertise of our experienced management teamand our local presence to deliver our initial development portfolio. We willfurther diversify and grow the Company's portfolio through the acquisition ofnew properties across our target cities which we believe have great prospectsfor delivering value for our investors." Moshe Morag, Chief Executive Officer of MirLand Development Corporation plc,said: "With the significant capital raising now successfully behind us, we willimmediately turn our full attention to our development activities in order tocreate capital growth for our shareholders. We have a number of very excitingopportunities in our portfolio which we believe offer attractive future growthprospects and we look forward to bringing these to fruition." For further information: MirLand Development Corporation plc +749 51303 109Roman Rozental Credit Suisse +44 20 7888 8888Richard Crawley Merrill Lynch International +44 20 7628 1000Craig Coben Financial Dynamics +44 20 7831 3113Stephanie Highett/Dido Laurimore Notes The Board MirLand has assembled a carefully selected team chosen for their complementaryskills and specific real estate development experience. Nigel Wright will beChairman, bringing thirty years' experience in the property, corporate financeand banking sectors. Guerman Aliev, deputy chief executive officer of Rosbank,Russia's seventh largest bank, will contribute his knowledge of the Russianmarket. Douglas Blausten is appointed as to be chairman of the remunerationcommittee. Mr Blausten has extensive expertise in property, is a Fellow of theRoyal Institution of Chartered Surveyors and a General Commissioner of Taxes andthe senior partner of Cyril Leonard, a firm of Chartered Surveyors. CarolineBrown will be chair of the audit committee, and brings over 20 years' experiencein corporate finance and the financial management of public companies. GeorgiosHadjianastasiou is chairman of the nomination committee and brings with him over25 years' experience in the Cyprus civil service and government. The Board will also include Mr Eliezer Fishman, as a Non-executive Director. MrFishman has over 45 years' experience in the real estate sector and holds amajority interest in many Israeli companies. Mr Eyal Fishman, his son, will bechairman of the Investment Committee. Mr Eyal Fishman has spent the past 15years developing the Fishman Group's business in Israel and abroad, as chiefexecutive officer of various companies in the group, including Megamart SportEquipment Ltd., Celio Chains Israel, P.K.P Design Ltd. and Fishman Chains Ltd.Moshe Morag, the chief executive officer of MirLand, will also be on the Board.Moshe brings with him over 32 years of general managerial experience and 17years of experience with real estate business. Roman Rozental, chief financialofficer for MirLand, joins the Board after positions as the chief financialofficer of several Israeli and international companies over the past decade. For further information on MirLand Development Corporation plc, please refer tothe website, www.mirland-development.com. Credit Suisse and Merrill Lynch International are acting for MirLand DevelopmentCorporation plc and no one else in connection with the Offer and will not beresponsible to any other person for providing the protections afforded to theirrespective clients or for providing advice in relation to the Offering. No offer or invitation to acquire shares in MirLand Development Corporation plcis being made by or in connection with this announcement. Any decision topurchase or subscribe for shares in connection with the Offer should be madesolely on the basis of the information contained in the Offer document which waspublished on 13 December 2006 in relation to the Offer. This does not constitute a recommendation concerning the Offer. The value ofshares can go down as well as up. Past performance is not a guide to futureperformance. Potential investors should consult a professional adviser as tothe suitability of any Offering for the individual concerned. The distribution of this announcement and the Offer in certain jurisdictions maybe restricted by law and therefore persons into whose possession thisannouncement comes should inform themselves about and observe any suchrestrictions. Any failure to comply with these restrictions could result in aviolation of the laws of such jurisdiction. This announcement does not constitute an offer to sell, exchange or transfer anysecurities of MirLand Development Corporation plc and is not soliciting an offerto purchase, exchange or transfer such securities in the United States or in anyjurisdiction where the offer, sale, exchange or transfer is not permitted or toany person or entity to whom it is unlawful to make that offer, sale, exchangeor transfer. The shares have not been and will not be registered under theUnited States Securities Act of 1933, as amended (the Securities Act) or underthe securities laws or with any securities regulatory authority of any state orother jurisdiction of the United States. The shares may not be offered or soldin the United States (as such terms are defined in Regulation S under such Act)absent registration or exemption from registration under the Securities Act. Nopublic offering of the securities discussed herein is being made in the UnitedStates. This document is not for distribution in or into the United States. This announcement and the Offer are only addressed to and directed at persons inmember states of the European Economic Area who are "qualified investors" withinthe meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) (Qualified Investors). In addition, in the United Kingdom, this announcementis being distributed only to, and is directed only at, (i) Qualified Investorswho have professional experience in matters relating to investments who fallwithin Article 19(5) of the Financial Services and Markets Act 2000 (FinancialPromotion) Order 2005 (the Order) and Qualified Investors falling within Article49(2)(a) to (d) of the Order, and (ii) Qualified Investors to whom it mayotherwise lawfully be communicated (all such persons together being referred toas relevant persons). Any investment or investment activity to which thisannouncement relates is available only to (i) in the United Kingdom, relevantpersons, and (ii) in any member state of the European Economic Area other thanthe United Kingdom, Qualified Investors, and will be engaged in only with suchpersons. The shares have not been and will not be registered under the applicablesecurities laws of any state or jurisdiction of Australia, Canada or Japan, andsubject to certain exceptions, may not be offered or sold within Australia,Canada or Japan or to or for the benefit of any national, resident or citizen ofAustralia, Canada or Japan. This document is not for distribution in or intoCanada, Australia or Japan. This announcement contains certain forward-looking statements. Suchforward-looking statements involve risks and uncertainties that couldsignificantly affect expected results and are based on certain key assumptions.Many factors could cause actual results to differ materially from thoseprojected or implied in any forward-looking statements. Due to suchuncertainties and risks, readers are cautioned not to place undue reliance onsuch forward-looking statements, which speak only as of the date hereof.MirLand Development Corporation plc disclaims any obligation to update anyforward-looking statements contained herein, except as required pursuant toapplicable law. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MLD.L