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New City construction project is revived

20 October 2008

VTB Bank has rolled over a RUR 850 mln. facility for the construction of the New City district between Cheboksary and Novocheboksarsk, the Chuvash Republic. The project's developer is JSC Privolzhskaya Gradostroitelnaya Kompaniya (JSC PGK, Cheboksary).

Following the meeting on the New City construction held on 7 October by Nikolai Fedorov, President of the Chuvash Republic, a decision was made to refinance the project. In May 2008, VTB suspended the facility for constructing the New City due to unsatisfactory progress in the construction. On 14 August, shareholders of JSC PGK elected a new General Director, Vladimir Filatov. JSC Volgastroigroup (VSG, a member of SAVVA Group, Moscow) was chosen as a new general contractor. Alexandr Yastrib, VTB Senior Vice President, said: "We are satisfied with how the new team lead by Vladimir Filatov, PGK Director, carries out the project's priority tasks, increases the speed of housing and social construction, and decides on engineering and transport infrastructure".

Under the New City project VSG plans to construct 35 595 sq. m. of housing by 20 December 2008, and to open first social infrastructure facilities from 1 January 2009, including a general practitioner's ofice. On 1 September 2009, a school for 825 pupils and a nursery school for 280 children will be opened. Both projects have been developed by German architects. By 1 January 2010, 200 000 sq. m. of housing are expected to be constructed in the New City. These are the obligations of Volgastroigroup, a general contractor and construction manager.

For reference:

New City is a new municipal district to join Cheboksary and Novocheboksarsk. The project is implemented under the national priority project "Affordable and Comfortable Housing to Russian Citizens". The New City will cover the area of 257 hectares. It is planned to provide around 1 370 thousand sq. m. of housing, with 25% intended for public housing, 65% - for business class housing, and 10% - for cottages. The project's total cost is RUR 53.7 bln. JSC Privolzhskaya Gradostroitelnaya Kompaniya will carry out all construction under the New City project. The company's shareholders include the Ministry for Property and Land Relations of the Chuvash Republic (25.001%), CJSC VTB Development (19%), International Trade Consultants Ltd. (6.001%,) and Region-GradoStroi Ltd. (49.998%).

VTB Group is a leading Russian financial group with a strong tradition in Russia and the CIS, and a presence in 17 countries around the world. The Russian Government is VTB`s majority shareholder, with a holding of 77.5%. The remaining 22.5% of the shares are traded on the RTS and MICEX in Russia, and VTB`s global depositary receipts are traded on the London Stock Exchange. VTB offers a wide range of services in corporate, retail and investment banking in Russia, some other CIS states and a number of countries in Western Europe, Asia and Africa.  As of  1 April 2008, VTB was the second largest financial group in Russia by assets (USD 108.8.2 bln.) and by deposits (USD 44.6 bln.).  VTB is among the top three national retail banks with a network of 1001 outlets in Russia and the CIS.  In 2008, VTB launched its investment banking business, which operates from Moscow, London and Singapore.
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