SRV seeks growth in Russia by establishing a real estate development fund together with VTB and Deutsche Bank
SRV Group Plc Stock Exchange Release 4 June 2009 9.00 am EET
SRV, VTB Capital (a subsidiary of VTB, the second largest bank in Russia) and Deutsche Bank have signed an agreement concerning a real estate fund operating in Russia. SRV acts in the fund both as investor and project management contractor. The fund will invest mainly in office, retail and hotel projects as well as in construction of high quality residential projects in Moscow and in St Petersburg. The fund can also invest in operating completed properties. SRV's share of the investment commitments in the first phase is EUR 20 million. Other investors are VTB Capital, Deutsche Bank and pension insurance companies Ilmarinen and Etera. The final target for the investment commitments of the fund is at least EUR 300 million, which can equal as much as EUR 1 billion in investment volume. The fund is negotiating at the moment with a number of international investors for new investment commitments. VTB Capital and Deutsche Bank will act, in a partnership, as sponsor and general partner of the fund. Their task will be, among others, to identify investments and to arrange debt financing for the projects. SRV acts as project management contractor in the fund. Through the fund, the company expects to receive at least EUR 200 million worth of construction contracts. "Establishing the fund and starting the cooperation with strong partners like VTB Capital and Deutsche Bank is a significant step in implementing SRV's growth strategy in Russia. The concluded arrangement opens a chance for SRV to enter in numerous significant construction projects in best locations in major Russian cities. The fund has excellent possibility to utilise the exceptional market situation on a market which has good growth potential in the long term," says Eero Heliövaara, CEO of SRV. SRV Group Plc Eero Heliövaara CEO Further information: Eero Heliövaara, CEO, tel. +358 201 455 202 Distribution: Nasdaq OMX Helsinki Main media VTB Group is a leading Russian financial group with a strong tradition in Russia and the CIS, and a presence in 18 countries around the world. The Russian Government is VTB's majority shareholder, with a 77.5% holding. VTB offers a wide range of services in corporate, retail and investment banking in Russia, some other CIS states and a number of countries in Western Europe, Asia and Africa. As of 31 December 2008, VTB was the second largest financial group in Russia. In 2008, VTB launched its Investment Banking business - VTB Capital, which operates from Moscow, London and Singapore offices. Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients, creating exceptional value for its shareholders and people. Deutsche Bank Commercial Real Estate Group is a global leader in commercial real estate, with approximately 350 employees in 19 offices located throughout the world.