Are you sure?

R.G.I. reports profit of $88.3 mln, plans to sell shares - extended

R.G.I. International, a Moscow- based real estate developer that listed its shares in London in December, reported a profit for most of last year and said it plans to raise money from a share sale.

The shares rose to a record. Net income amounted to $88.3 million between March 14, when RGI was incorporated, and December 31, R.G.I. International said today in a statement. The company, based in the Channel Island of Guernsey, posted revenue of $380,000. R.G.I. aims to raise about $200 million by selling new shares to institutional investors, the company said in a separate statement. „The group operates in the high-end property market of central Moscow, where demand for the highest quality residential, office and retail developments continues to outstrip supply,” Chairman Jacob Kriesler said in the statement. R.G.I. raised $192 million in its IPO in December when it listed its shares on London's Alternative Investment Market. It wants the money help finance two residential projects it announced yesterday that will triple the space it is developing in Moscow.

The shares rose $1.03, or 13%, the biggest-ever gain, to a record $8.98, 50% more than the IPO price of $6. Profit was boosted by a $58.5 million gain in the value of its properties and $33.7 million from its share of profit in a jointly controlled entity. Real estate prices in Moscow, home to about 11 million people, more than doubled in the last two years amid growing demand for modern offices and apartments. Europe's most populous city is also the most expensive for prime real estate, after surpassing London this year, property broker Jones Lang LaSalle said in September. R.G.I. is investing $140 million in its two new residential projects, known as the Chelsea Development and the Victory Park Development. The two developments will take the aggregate area of its portfolio in Moscow to as much as 550,000 square meters (5.9 million square feet) from the current level of around 160,000 square meters. R.G.I. said it planned to place the new shares with institutional investors within the next three days. Morgan Stanley, which is managing the sale, will buy sufficient shares to maintain its 8.9% stake, R.G.I. said in the statement. (Bloomberg)