LSR Group, a leading real estate developer and building materials producer in Russia (LSE: LSRG; MICEX, RTS: LSRG), announces that yesterday, on 3 June, 2008 the first deadline provided for in the offer of OOO LSR-Invest Series 01 bonds was successfully passed. No bonds were presented for LSR Group to buy back at the request of their holders.

Elena Tumanova, Chief Financial Officer and member of the Board of Directors of LSR Group, has commented as follows:

“In my view, the very fact that no bonds have been purchased in the offer while the financial markets situation is far from being simple means that the debt securities of LSR Group are perceived by the investment community as reliable and yield-generating financial instruments.”

It may be noted that OOO LSR-Invest is a 100% subsidiary of OJSC LSR Group and was founded specifically for the purpose of raising funds for the Group’s companies.

Notes to editors:

OJSC LSR Group is a diversified construction company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction — from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.

LSR Group has operations and offices in a number of cities in the Leningrad Oblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany. LSR Group employs over 15,000 people.

In 2005 and 2006, the revenues of LSR Group (according to IFRS statements) were $ 463 million and $ 777 million respectively. In 2007, the revenues amounted to $ 1,403 million.

In November 2007, OJSC LSR Group implemented an IPO, and now its GDRs are listed on the London Stock Exchange, and the shares — on MICEX and RTS.

LSR Group has a B1 rating, outlook — stable assigned by Moody’s Investors Service in July 2007 and confirmed on May 30, 2008, and a B1 rating, outlook — stable assigned by Fitch Ratings on May 30, 2008.

In 2007, LSR Group was bestowed a National Award in the field of business as ‘The Company of the Year’ in the ‘Construction’ category.