WOOD Flash – Etalon: Alfa Bank anchoring the capital increase, Sistema has a call option on the shares
Etalon’s 30% capital increase, via a rights offering, has attracted limited demand from the minority investors, who subscribed for c.1m new shares and GDRs. In line with its previous announcements, Sistema subscribed for 22.6m new shares, pro rata to its existing 25.6% stake. Today, Etalon is offering the remaining 65m shares/GDRs, not taken up during the rights offering, via a book building. Alfa Bank seems to be anchoring the deal, suggesting the intention to potentially buy up the unsold shares/GDRs. We estimate that, if Alfa Bank purchases the entire amount that was not subscribed by the existing shareholders, it would reach nearly a 17% stake in Etalon. There is a swap and option deal between Alfa Bank and Sistema. If Sistema uses its call option and purchases the stake from Alfa Bank within the next 30 months, its stake would increase to 42.5%.Etalon Group is a real estate development and construction company. Co.'s principal activity is residential development in Saint-Petersburg metropolitan area and Moscow metropolitan area, the Russian Federation. Co. has three reportable segments: Residential Development, which includes construction of residential real estate including flats, built-in premises and parking places; Constructions Services, which includes construction services for third parties and for internal purpose; and Other Operations, which include selling of construction materials, construction of stand-alone premises for commercial use and various services related to sale and servicing of premises.
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