SU-155 Reorganizes for Transparency

VedomostiThe builder, controlled by billionaire Mikhail Balakin, currently comprises more than 140 individual legal entities.
SU-155, one of the country's three largest builders, is in the process of restructuring its assets to prepare for a switch over to international financial accounting standards, financial director Sergei Murashko told Vedomosti last week.

As before, the company will belong to billionaire Mikhail Balakin, the country's 34th-wealthiest person, according to Forbes magazine Murashko said, the newspaper reported. Balakin currently owns more than 60 percent of the company, he said.

In December, a joint stock company called SU-155 Group was registered, the report said. A total of 64 SU-155 subsidiaries will be transferred to the new holding, giving it a likely market capitalization of more than $10 billion, Vedomosti reported.

The company, which controls more than one-quarter of the Moscow residential construction market, has more than 140 individual firms and is looking to simplify its structure.

"The restructuring of the company is needed to optimize our business processes and property structures, move to international financial reporting standards … and to optimize the financing for our new projects," Murashko said.

Earlier this month, Troika Dialog took the company off its list of 2008 initial public offerings, saying Russian companies would raise around $12 billion less this year in IPOs because of the global credit crisis, Reuters reported.

At the end of 2007, SU-155 had a debt of $1.17 billion, which is 2.4 times greater than at the end of 2006, Vedomosti reported. The company is planning to build more than 13 millions square meters of space by 2015, 45 percent of which will be in the regions, the report said.