Updated August 19, 2008

Instead of Eurasia Logistic’s IPO planned for 2009, the Kazakh banker Mukhtar Ablyazov decided to take all his developer business in Russia to a stock exchange. The businessman establishes one company that will comprise such projects as Eurasia Logistic (the chain of warehouses with the area of 9,3 million sq.m.) and Eurasia City (the satellite town in the Moscow region of 9,1 million sq.m.). The established managing company becomes the most expensive Russia’s developer company the stocks of which are traded on a stock exchange: its capitalization can reach $23 billion.

One of the investment bankers told about the ongoing consolidation of Mukhtar Ablyazov’s developer business. According to him, it goes about the establishment of one company that will manage such projects as Eurasia City (the satellite town construction in Konstantinovo of the Domodedovo region, near Moscow with the total area of 9,1 million sq.m.) and Eurasia Logistic (the chain of warehouse complexes of 9,3 million sq.m.). The developer aware of Mr. Ablyazov’s plans said that the investment strategy of the created company was already discussed. The source assured that the new structure would appear in one and a half month and in the future it would manage the developer projects of Eurasia Investment and Industrial Group. Eurasia Group constructs the oceanarium on Poklonnaia gora (the Hill of Respectful Salutation) with the total area of 160 000 sq.m; builds Eurasia Tower skyscraper in the Moscow International Business Center Moscow-City (208 000 sq.m) coupled with Pavel Fuks’s MCG (Moscow City Group); and constructs the underground shopping mall Paveletsky (120 000 sq.m).

The head of Eurasia Logistic marketing department and GR Nikolay Ditsman says that now is discussed the consolidation possibility of "Eurasia Logistic and Eurasia City’s intercrossing functions, such as marketing, finances, and HR". Mr. Ditsman underlined that the possible consolidation would not affect Eurasia Group.

Mukhtar Ablyazov, the co-owner of the Kazakh bank Turanalem, controls Eurasia Group, Eurasia Logistic and Eurasia City. According to the received data, the total area of all projects implemented by three companies attains 19 million sq.m.

The developer business’s reorganization is meant for holding IPO of the incorporated company, the sources are convinced. Mr. Ditsman assures that the ongoing consolidation is "by no means related to the possible IPO of the Group’s some businesses". However, previous year Bloomberg agency, with the reference to Mr. Ablyazov, reported that in 2009 Eurasia Logistic could offer investors up to 25% within IPO on the LSE. Now Eurasia Logistic’s capitalization reaches almost $9 billion, as AntantaPioglobal analyst Andrey Verkholantsev calculated. According to him, if the company consolidating assets of Eurasia Logistic, Eurasia City and Eurasia Group enters the stock exchange, its capitalization can attain $23 billion.

Until recently, the Russian developers didn’t manage to break the stock exchange record of Kirill Pisarev and Yury Zhukov’s PIK Group. In May, 2007 the Group placed 25% stocks on the LSE, and its capitalization totaled $12,3 billion. The placement of Lev Leviev and Alexander Khaldey’s AFI Development can be named as the other large developers’ IPO: in May, 2007 the company sold 19% of stocks to investors, and its capitalization reached $7,3 billion. "Last spring the Russian developers’ securities were overheated", Andrey Verkholantsev warns. According to him, the established company can be estimated at 35% lower of its assets’ real cost because of the US mortgage crisis.