Etalon in Secondary Public Offering

Cleary Gottlieb acted as international counsel to Etalon Group (Etalon) in its secondary public offering of ordinary shares, including in the form of global depositary receipts (GDRs) listed on the London Stock Exchange and the Moscow Exchange.

The offering consisted of an offering of rights to subscribe for new ordinary shares, including in the form of GDRs, to existing holders of the company’s equity securities, followed by a marketed offering to institutional investors of ordinary shares not taken up during the rights offering in the form of GDRs.

The offering comprised 88.49 million new ordinary shares, including in the form of GDRs, representing 30% of Etalon’s ordinary share capital, raising more than $150 million in gross proceeds that will be used for the acceleration of Etalon’s investment program and business expansion. The offer price for both parts of the offering was set at $1.70 per share/GDR. The offering closed on May 18, 2021.

Sistema PJSFC (Sistema), Etalon’s largest shareholder, participated in the rights offering by indirectly purchasing 22.63 million new ordinary shares, pro rata to its existing holding. In addition, Sistema and Alfa Bank signed a non-deliverable swap agreement with respect to GDRs in connection with which Alfa Bank purchased 64.14 million GDRs in the second part of the offering.

The underwriters were Renaissance Capital, Sberbank CIB (UK) Limited, and VTB Capital plc.

Etalon Group is one of the largest and longest-established residential real estate developers with 30 years of experience in Russia, with leading positions in Moscow and St. Petersburg. Cleary previously advised Etalon in its successful IPO on the London Stock Exchange in 2011.