Russia’s PIK Group closes deal to buy Morton

MOSCOW, Dec 20 (PRIME) -- Russian real estate developer PIK Group has closed a deal to buy real estate developer Morton Group from Sergei Gordeyev’s Horus Real Estate Fund I B.V., PIK Group said in a statement published at the London Stock Exchange on Tuesday.

“By combining the assets, production capacities and operational units of these two companies under the PIK brand, a national-scale industry leader has been created. For the first time in history of Russian real-estate development, the leading player in the industry is a public company with an efficient and transparent business model,” PIK said.

“Management expects that in 2017-2018 the company's revenue could reach 200 billion rubles, with annual sales volumes of around 2 million square meters, while high-tech production capacities for industrial construction will exceed 1.0 million square meters. The combined land bank will amount to 15 million square meters.”

Completion of the integration project and the launch of work as a single PIK brand is planned by the end of January–March 2017.

PIK Group has also sold 10 billion rubles worth of bonds and signed a loan agreement with one of the biggest Russian banks for an additional 10 billion ruble loan at a more comfortable interest rate, which together will allow it to refinance 85% of Morton Group's expensive short-term debt, the company added.

In September, Kommersant business daily reported that PIK Group’s President Gordeyev bought a stake in Morton from core owner Alexander Ruchyev, while Ruchyev said that all Morton’s minorities also sold their stakes to Gordeyev. Later the PIK Group said it planned to integrate all Morton’s assets through buying Godeyev’s Horus Real Estate Fund I B.V.

Gordeyev said in October that the company is now studying Morton’s assets, and may sell some of them. The joint market share of Morton and PIK is estimated at 20%, he said then, and it needs no significant extension.

(61.7931 rubles – U.S. $1)

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