Today, on 19 April 2010, LSR Group (“LSR” or the “Company”), (LSE: LSRG; MICEX, RTS: LSRG), announces a global offering of up to US$773 million in the form of ordinary shares and Global Depositary Receipts (“GDRs”) representing ordinary shares (“Offering”).

The shares and GDRs will be offered via Streetlink, a limited liability company organized under the laws of Cyprus and beneficially owned by Andrey Molchanov as well as by Andrey Molchanov personally (together, the “Selling Shareholders”). At the same time, Streetlink has committed to subscribe to subsequent new share issuance by LSR Group, reinvesting up to $515mm of proceeds through exercise of its pre-emptive rights in the open subscription process as described below (“Open Subscription”).

The shares and GDRs will be offered within an indicative price range of US$10-11 per GDR and equivalent to US$50 - US$55 per ordinary share. Five GDRs represent interest in one ordinary share. The final offer prices will not be below the foregoing ranges, although they may be set above these ranges.

Following the Offering, the Company will offer for subscription up to 16,042,508 new shares through Open Subscription. Streetlink commited to exercise its pre-emptive rights to subscribe in the Open Subscription using all of the net proceeds it receives from the sale of shares and/or GDRs in the Offering.

The existing holders of ordinary shares as at 5 March 2010 (“Record Date”) have statutory pre-emptive rights to subscribe for the new shares to be issued in the Open Subscription. The price per share for existing holders of ordinary shares as of Record Date may be up to 10% less than for other investors in the Open Subscription, but not less than the price established in the Offering (less offering costs borne by Streetlink). The maximum aggregate gross proceeds received by the Company for the new shares to be purchased by Streetlink in the Open Subscription will be approximately US$515 million. As at Record Date, Streetlink controlled 58.38% of LSR Group.

The Company’s existing holders of GDRs will not have pre-emptive rights to participate in the Open Subscription and are invited to participate in the Offering. The Company and the Selling Shareholders will take into account, in the allocation of the GDRs, the ownership interests of the existing holders of GDRs.

The Company intends to use the proceeds it receives in the Open Subscription
- to repay approximately US$300 million of its outstanding indebtedness, subject to its use of such proceeds to fund favorable acquisition opportunities;
- to fund the expansion of its real estate development business through acquisition of land plots;
- to finance existing developments and general building materials capital expenditure, and for other general corporate purposes.

The Company, the Selling Shareholders, the Senior Management have agreed, subject to customary exceptions, to enter into a lock-up agreement for a period of 90 days following completion of the Offering.

Goldman Sachs International and J.P. Morgan Securities Ltd. are acting as Joint Global Coordinators, and together with VTB Capital, as Joint Bookrunners in connection with the Offering.

Commenting on today’s announcement, Igor Levit, CEO of LSR, said:
“LSR is a rapidly developing company, strongly positioned in an industry that is expected to make a strong contribution to Russia’s economic recovery.  Raising equity capital is an excellent way of both raising financing to enable us to execute our strategy and allowing investors to participate in our growth going forward.”