Velika Kishenya Seeks Funds For Future Expansion

Group of companies "Velika Kishenya" plans to come on the IPO in mid-2008, 15-25% of the shares. The"Economic news" reports according to group's CFO Oleg Pyavka.

In the future the company plans to increase its market share by increasing sales, as well as acquisitions of other retail chains. Now Kishenya share on Ukrainian market is about 2%. And, as Mr. Pyavka stated, in the future the consolidation of retail in Ukraine is pretty much possible.

In addition, they announced intentions to enter in CIS market. "I think that is, first and foremost, the CIS markets. But regarding Russia, taking into big competitiveness among local and international players that's quite complex and therefore less attractive, "he said.

Currently, shares of Retail Group JV, operational manager of "Velika Kishenya", quoted in the First stock trading system "(PFTS, Kiev) only for the Ask with price equal to the USD 775 mln.
cap.

As reported in 2007 March, referring to Roman Lunin, the Chairman of the Supervisory Board of Retail Group, Great Kishenya has planned the IPO in the Q2 2008. "Based on the latest price of placement in March 2006, our capitalization USD 387.5 mln ... Since then, the indicators of the company increased by 80%. I hope that over time our capitalization exceeds $ 1 billion, "said Mr. Lunin.

Previously, "Great Kishenya" was going for the IPO in the H2 2007 or early 2008 on the London Stock Exchange or in the alternative markets. "

Company plans to get in own development portfolio USD 250 mln from foreign markets by placing additional equity instruments for USD 100 mln. As well as another USD 150 mln, obtained from bank loans.

Now "Velika Kishenya" operate in 14 cities and has 34 objects (27 supermarkets and 7 hypermarkets), five of whom are in their own shopping centers. Total GLA is about K90 sqm.

Turnover in 2004 - USD 109 mln, in 2005 - USD 232 mln, in 2006 - USD 403 mln.

First TMM's IPO

TMM (Kiev) placed trough IPO 13% company's stake. The issue was made using BONY's GDR with USD 15.45 per share. Total placement amount is USD 105 mln. The owner of the company and CEO, Nikolai Tolmachev said it recently. And the total capitalization of the company reached USD 800 mln.

According to Igor Mazepa, CEO of Concorde Capital, which is the underwriter of IPO, the deal will be completed next week.

The funds figure has been greater than expected, Mr. Tolmachev said. TMM intended to receive USD 100 mln. Due the session the demand exceed supple, so the TMM decided to rise proposed stake from 10 to 13%.

The company is going to invest the funds to ongoing and new project, in master planned communities, for example. We plan to build gated community, and has already acquired suitable land," he said.

TMM is the second Ukrainian developer, which placed shares on foreign stock market. Firt one was XXI Century with IPO's placement in LSE for USD 139 mln (35% share capital)

XXI Century Looking For Money

XXI Century id going to issue Eurobonds with total amount as USD 175 mln. Looking at my previous post about its Chairman' Lev Partskhaladze opinion, I understood, why he did bright forecasts. Before the issue, investors waiting a good news. But truth is pretty different, in my mind.

Anyway, the issues starts at May 25 in Luxembourg stock exchange. Discount is assumes as 10% with semi-annual payments. They intend to retire the debt at 2010.

All issue amount company plans to invest in new and existing real estate projects, including some objects for Euro-2012.

Good luck, guys!

Funding for IMB from IFC

Interfax, Ukraine Business

The International Finance Corporation (IFC), the private sector arm of the World Bank Group,has opened a 10-year, $7-million first housing finance credit line for the International Mortgage Bank (IMB), the IFC reported.

The facility will support the growth of IMB's mortgage portfolio and expand access to credit for Ukrainians seeking to purchase homes or make home improvements. The loan agreement was signed on March 28.

"This agreement with IFC is a landmark for IMB. We are also in discussions with IFC about other types of financing over the next six to nine months.

We believe the deal signed today is only the beginning of a fruitful partnership," the IFC press release quotes Todd Esposito,Chief Financial Officer of IMB Group,as saying.

Yuriy Blashchuk,IMB's Chief Executive Officer,said that the funding is the second deal that IMB has signed this year,bringing the total long-term mortgage funding to about $50 million.

"It will enable us to continue to be a leader in the Ukrainian marketplace," he said. "We look forward to working with IFC over the next several years."

Jerome Sooklal, Director of IFC's Central and Eastern Europe Department said,"Supporting housing financing in Ukraine is a strategic area for IFC. By financing a growing bank known for best practices, affordable financing, and outstanding service, we are helping build the mortgage market and helping Ukrainians purchase homes."

Ukraine became a shareholder and a member of IFC in 1993. As of March 20,2007, IFC invested around $705 million in 32 projects.

The IFC's investment program in Ukraine is expanding rapidly, with a focus on the financial, agribusiness, construction materials, retail trade and services, energy and infrastructure sectors.

The IFC has also been conducting an extensive advisory program since 1992,which initially focused on the privatization of small businesses, land, and idle construction sites.

Current donor-funded programs offer advice on corporate governance, leasing, and agribusiness. The IFC also seeks to improve the business environment and promote growth of small and medium enterprises.

IMB Group Public Ltd. is Ukraine's leading consumer lending holding, offering mortgages and point-of-sale loans, and taking deposits.

The group owns a 100% stake in International Mortgage Bank and in Family Credit, a consumer lending intermediary. IMB Group is backed by Horizon Capital, Ukraine's leading private equity fund manager.

IMB was founded in 2004. The bank's overall assets in 2006 grew by 4.3 times to UAH 374.379 million,while its aggregate liabilities increased by 5.9 times to UAH 356.92 million. The bank's losses in 2006 ran into UAH 9.263 million, whereas in 2005 they were UAH 10.445 million.

The bank ranked 95th among 169 operating banks in terms of overall assets (UAH 374 million) by January 2007,according to the National Bank of Ukraine.

Bank expert predicts a decreasing commercial RE rates

Within 2 or 3 years it is expected stabilize, and perhaps a slight fall in rental rates on commercial and office real estate in Ukraine.

Such forecast was made by director of the Centre for project finance of BNP UkrSibbank Valery Povreznyuk.

In his view, the demand for commercial and office properties in the regions remains high but in Kiev, it is close to balance between supply and demand. "Lack of hotels and logistics is everywhere - these segment are behind the current development for a few years," he added.

According to Mr. Povreznyuk, for today the bank finances about 20 big projects for the construction and about 10 are under review process. The largest loan amounts comes for retail (55%), logistics parks-25%, office real estate is 15%, hotels 5%.

60% of commercial projects financed by the bank, built on leased land. That trend, he explains with complicate process of land buying, including the constraints of local authorities, unpredictable economic changes, as well as the specifics of the project.

Short news - 2006 Ukraine mortgage figures

The volume of mortgage lending in Ukraine tripled in the past year and by the beginning of March 2007 reach USD 28 bln., said Executive Director, Head of of banking regulation department of the National Bank of Ukraine (NBU) Alexander Kireev.

According to the report, 81% of the total mortgage loan amounts, or USD 22.8 bln. are loans in foreign currency. The share of loans issued to private persons in the total amount of loans is USD 21 bln USD. "Every 4th loan is lends as mortgage", said A. Kireev.

Kiev administration is going to get Fitch

The Kyiv city state administration wants to get rating of the Fitch international rating agency before 2008, said Denys Bass, first deputy chairman of the Kiev city administration

"I think we shall get the rating from the Fitch agency, which we have not still obtained, in order to hold a complete set. I think we shall be awarded with it until the end of the year," said Bass. He added that the Kiev city administration wants that the Fitch rating will the same as for Ukraine at all.

Besides, Bass announced the Kiev city administration intentions to take the similar negotiations with the Moody's and Standard & Poor's, regarding increasing the rating.

He thinks that obtaining the Fitch rating and upgrading the two other ratings will help the Kiev city administration in getting the lowest interest-rate on issue of Kiev Eurobonds, which the administration plans to issue in Summer 2007.

In July 2006 Standard & Poor's upgraded Kiev's long-term credit rating from B+ to BB-. In December 2006 the Moody's international rating agency upgraded Kyiv's rating from B2 to B1 due to introduction of a new technique of awarding ratings.

A National Bank of Ukraine is prepared for the prices collapse on real estate market

The National Bank of Ukraine (NBU) was prepared by the project of "Order of currency operations, related to the export and import of financial capital" which foresees a temporary moratorium on personal crediting in foreign currency.

The promise of National Bank Head, Vladimir Stel'makha can play on a hand that, who wants to improve the housings conditions. A rising price on residential real estate already resulted in that the half of all of transactions at the market of habitation is carried out by mortgage loans. From Ukrainian national mortgage association (UNIA), up to 85% mortgage oans are given out exactly in currency. If national Bank will succeed to forbid the currency crediting, on the estimations of experts, the more than half of potential borrowers will give up services of banks, not wishing to pay for the hryvna credit of 17--18% annual. This process, as experts consider, can be outpoured in falling of demand at the market of the real estate to 40%.