Sberbank to Take Over Skyscraper

VedomostiThe Gorod Stolits complex has a total area of 288,680 square meters.��
Sberbank will become the main owner of developer Capital Group's largest asset, the Gorod Stolits complex in Moskva-City, under a $400 million loan agreement.

Sberbank, Sberbank Capital and Capital Group on Friday announced the restructuring of a loan to Capital Group for a total of more than $400 million. "To complete construction of the Gorod Stolits complex, Sberbank and Sberbank Capital will provide the necessary financing on an equal basis," the companies said in a joint statement.

Capital Group general director Andrei Nesterenko said Sberbank had become a co-investor in the project. Nesterenko and Sberbank spokeswoman Irina Kibina declined to comment on the terms of the deal.

The Gorod Stolits, or Capital City, development has a total area of 288,680 square meters in two towers on Site 9 of Moskva-City. The buildings will include apartments (101,440 square meters), offices (72,315 square meters), parking, shopping areas and sports facilities. So far, the first phase of the project has been completed, including shopping areas, parking and office space in the South Tower.

Capital Group, co-owned by Vladislav Doronin, Eduard Berman and Pavel Tyo, had planned to finish the building this year.

A credit line for $400 million was opened at Sberbank several years ago for the Gorod Stolits complex, and it has been refinanced several times, a source close to Capital Group said. The loan was backed by the Gorod Stolits building and the Cypriot-registered Kavadriks Trading and Investment Limited, which has the complex on its balance sheet, signed as a guarantor, the source told Vedomosti.

On Feb. 20, the source said, the company missed a payment on the loan and suggested that the bank seize the collateral. As a result, Sberbank will become the main shareholder in Gorod Stolits, said a source close to the bank and an official at another creditor of Capital Group. The source close to Sberbank could not say which part of the complex would belong to the bank.

Andrei Zakrevsky, senior vice president at Knight Frank, said according to his calculations, a square meter in Gorod Stolits could cost about $5,000, meaning that the entire complex would be worth about $1.4 billion. The bank could get a discount of 70 percent, which means that Sberbank would be able to lay claim to the entire complex, he said.

"It's an excellent deal for us," a Sberbank representative said.

Capital Group spokeswoman Dinara Lizunova declined to say what percentage of the space in the complex was already sold. A source close to the company estimated that 10 percent to 15 percent of the space had already been purchased.

The company needs about $2,000 per square meter for construction, or about $580 million, Zakrevsky said, giving a rough estimate.

Sberbank will offer mortgages to people buying apartments in the complex, the statement said.

"Often its easier for companies to hand over a property to their creditors than to repay loans," said Alexei Sharov, managing director of A1.

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