RGI to Sell 22,25% Stake to Synergy Classic
OREANDA-NEWS. May 26, 2010. Moscow developer RGI is set to sell 22.25% of its shares to Synergy Classic [not to be confused with Synergy Vodka] for USD90m via a private placement. Synergy has agreed to buy USD 9m shares, with an option to buy additional USD 81m in shares in July. The average price per share for the transaction would be USD 2.5, which is a premium to the current USD 2.2 share price, reported the press-centre of OTKRITIE Financial Corporation.
View: We regard the news as positive for RGI, which could use the proceeds to finance the fitting works at its Tsvetnoy project and finance the construction of its Kingston residential project.
Valuation and Action: The stock trades on a P/NAV of 0.5x, vs. 0.55x average for Russian peers and 0.89x for EM peers-- suggesting that the stock is undervalued. Currently we do not cover RGI stock.
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