July 11, 2019 / 12:30 PM / 3 months ago

Russian construction group Inteco expects to post a profit in 2020 -president

MOSCOW, July 11 (Reuters) - Russian construction group Inteco, which has been controlled by the central bank since 2017, expects to start making a profit next year and could hold an initial public offering (IPO) at a later date, its president said.

“We must be ready for any shareholder exit strategy in 2023, including an IPO,” Inteco President Alexander Nikolayev told Reuters in an interview.

“However, we see no obligation to enter the stock market.”

Nikolayev, who became the group’s president in 2018, added that Inteco would break even this year and was set to become profitable in 2020.

He attributed the group’s projections to the scope of its portfolio, including plans to build on between 500,000 to 600,000 square metres of land and sell 150,000 square metres annually until 2023.

Inteco, which has been plagued by debt in recent years, was taken over by the Russian central bank two years ago as part of an asset transfer by owner Mikail Shishkhanov.

The transfer was made to bail out B&N bank, a troubled lender owned by Shishkhanov and businessman Mikhail Gutseriyev.

Inteco, which builds and designs residential and commercial buildings, currently has 30 billion roubles ($474.26 million) in debt. Nikolayev said the group’s debt would be converted into equity by the end of the year or early 2020.

After clearing its debt, Inteco, which has an annual investment budget of 10 billion roubles, plans to acquire projects and land in Moscow, Rostov-on-Don and St. Petersburg by using new equity investments, Nikolayev said. ($1 = 63.2568 roubles) (Reporting by Tatiana Voronova Writing by Gabrielle Tétrault-Farber; Editing by Kirsten Donovan)

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