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. Last Updated: 07/27/2016

LSR Group Raises $770M in Flotation

LSR Group raised $772 million on Friday with a flotation priced in the middle of the offer range.

The company, which focuses on St. Petersburg, said it had priced the offering at $14.50 per Global Depositary Receipt and at $72.50 per local share.

The pricing was about the middle of a $65 to $82.50 offer range and gives LSR a market value of around $6.8 billion, behind leading Moscow property developer PIK at $14.5 billion.

The IPO also created yet another billionaire as the firm's top owner, businessman Andrei Molchanov, a close relative of St. Petersburg deputy governor Yury Molchanov, got $5 billion on paper through the deal.

Molchanov, 36, who controlled 82 percent of LSR before the IPO, and a few other shareholders sold a total of 12.5 percent of the firm during the offering, including 2.5 percent of the existing stock plus 10 percent through a new issue.

Four Russian real estate companies have held IPOs since the debut by Open Investments in 2004, with the record being held by developer PIK, which raised $1.8 billion in June.

Sergei Filchenkov, analyst at Finam brokerage, said he considered LSR's IPO a success, given the flurry of placements by Russian property developers in recent months.

"We had not expected demand to be high ... as investors' portfolios were already full. In such conditions, placing the stock at mid-range looks quite a success," Filchenkov said.