Dragon Capital Places 23% of VK Development for $37m
Kyiv, November 8, 2006 – Investment bank Dragon Capital completed the placement of a 23% stake in property development company VK Development, raising $37m.
Dragon Capital acted as exclusive financial adviser and sole placement agent in the transaction. The shares were sold to European and U.S. institutional investors, and the placement was three times oversubscribed.
VK Development was founded by the supermarket chain Velyka Kyshenya to boost the group’s expansion options and to capitalize on opportunities in the booming domestic shopping mall market. VK Development shares will be listed on the PFTS, Ukraine’s primary stock exchange, and start trading on November 8.
In 2006-2008 VK Development plans to build six modern shopping centers with a total area of 255,800 square meters, in Kyiv and other Ukrainian cities, and a warehousing complex of 195,300 square meters near Kyiv. Total project costs are expected to reach $285m and will be financed, in addition to equity, by debt and retained earnings.
The VK Development placement became Dragon Capital’s 11th transaction of this kind in 2006. The bank raised more than $390m of equity capital for local corporates and banks in those deals, including $35m for the Velyka Kyshenya supermarket chain.
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