Implenia AG

euro adhoc: Implenia AG
Joint Ventures/Cooperation/Collaboration
Invitation to a media and analysts' conference

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30.11.2007

Quantum leap for Implenia Joint venture established with Russian Land, Russia´s premier property development business

D i e t l i k o n, 30 November 2007.  Implenia, the market-leading Swiss construction services group, has entered into a partnership with Russian property developer "Russian Land" to form a joint venture called "Russian Land Implenia" (RLI). The new joint ven¬ture, which is controlled equally by the two partners, will take over the planning, engineering, execution and subsequent management of all Russian Land´s development and construction projects. Russian Land is Russia´s premier real estate development and services company, with projects in prime locations in Moscow, St. Petersburg and other regional centers around Russia. There are currently 16 large real estate projects in Russian Land´s multi-billion dollar project pipeline, such as the redevelopment of the former Hotel Rossia site, adjacent to the Kremlin. Russian Land is majority owned by Russian entrepreneur Chalva Tchigirinsky.  He has been working successfully in the Russian property business since 1989, and is now bringing his real estate projects together under Russian Land. At the operational level, Russian Land is managed by its Swiss CEO Urs Häner.

The two partners bring their own particular strengths to the new joint venture "Russian Land Implenia": Russian Land has the high-end projects and access to the market, while

Invitation to a media and analysts' conference today, Friday, 30 November, 10.30 a.m. at the Hotel Savoy in Zurich At today´s media conference, the Chairman of Implenia´s Board of Directors Anton Affentranger, Implenia´s CEO Christian Bubb, Member of Implenia Group Management Peter Bodmer, and the CEO of Russian Land Urs Häner will provide more details of the joint venture.

Implenia has the skills to plan and implement complex projects to the highest standards. Peter Bodmer, a member of Implenia´s Group Management, is assuming operational management of RLI. Initially he will concentrate on project management for the develop¬ment and realization of all Russian Land projects. In a later phase the RLI business model also envisages handling major infrastructure projects. Implenia plans to further expand its international operations and believes that in five years´ time its international activities will be contributing substantially to Implenia´s EBIT.

The two partners are also entering into a longer-term partnership beyond the joint ven¬ture. Russian Land is becoming a shareholder in Implenia by purchasing from Implenia a 2,71 percent capital stake, 500,000 shares, for a price of CHF 39 per share. In addition, the two companies are nominating a representative to sit on each other´s Boards of Directors.

Pronounced growth market

"The joint venture 'Russian Land Implenia´ offers us a unique opportunity to use our exten¬sive know-how in a very rapidly expanding market with minimum investment and correspondingly manageable risk. This will deliver strong growth and sustainable value," says the Chair¬man of Implenia´s Board of Directors Anton Affentranger. RLI marks the first logical and deter¬mined step in the implementation of Implenia´s internationalization strategy. Thanks to the joint venture, Russia is set to become an attractive second home market for Implenia. In terms of supplying high quality residential and commercial property, not to mention shopping centers, hotels and entertainment complexes, and modernizing the country´s infrastructure, there is a great deal of catch-up demand in Russia. "Jones Lang Lasalle estimates that invest¬ment in commercial real estate in Russia last year totaled US$4.2bn and expects it to reach US$6.5bn this year," says Russian Land´s CEO Urs Häner.

In addition to the huge redevelopment on the Hotel Rossia site in the center of Moscow - which will include a new hotel, residential and retail space as well as two concert halls, a major museum and a library - Russian Land is planning further major projects like the Russia Tower in Moscow, Europe´s tallest building at over 600m, and the Norman Foster-designed New Holland project in St. Petersburg, which includes a Festival Palace. It is also planning regional projects in major cen¬ters such as Kaliningrad and Irkutsk. Russian Land currently owns 16 development projects and is in final negotiations for another 10 projects in Moscow, St. Petersburg and the rest of Russia.

Attractive margins, great growth potential and manageable risks

According to the joint venture agreement concluded by the partners, RLI will take over project management of all Russian Land´s projects at market margins. Russian Land and Implenia both intend to build up the joint venture substantially in the years to come in order to benefit from their complementary abilities and the immense opportunities offered by the Russian market. Alongside pure process and project management, RLI plans to enter the construction business which offers attractive margins in Russia in the near to medium term, as well as the mainte¬nance and service business. These areas will increase value creation still further. Implenia´s aim is to harness this high-margin, high-growth business, together with its other planned interna¬tional operations, to raise its consolidated EBIT margin to 6% by 2012 and thus to generate through its international activities a significant portion of group EBIT. "Thanks to the structure chosen for the joint venture with Russian Land, the risks are manageable," says member of Implenia Group Management and RLI´s CEO Peter Bodmer. "At the same time the market po¬tential and the benefits for our shareholders and other stakeholders are very promising indeed."

Good corporate governance

Owing to the strategic importance of the joint venture, the two partners have agreed a series of governance guidelines. Implenia´s Board of Directors has decided to propose that Russian Land´s CEO Urs Häner be nominated to the Board at the next AGM. Conversely, the Chairman of Implenia´s Board of Directors Anton Affentranger will be nominated to the Board of Directors of Russian Land. In addition, Russian Land is purchasing a stake of 2,71 percent, 500,000 shares, in Implenia´s equity capital for a price of CHF 39 per share while undertaking to respect the existing voting right restrictions set out in Article 7 para. 4 b of Implenia´s articles of associa¬tion. Russian Land regards itself as a long-term investor in Implenia, but it does not intend to buy the company, so it has undertaken not to make any takeover offer within the next five years. "We welcome Russian Land as a strategic investor in our company. Our close coop¬eration is in the best interests of Implenia and its stakeholders, and will help greatly to increase shareholder value," says Anton Affentranger.

Notice: Photos of today´s signing ceremony of the joint venture in Zurich can be downloaded from Implenia´s website www.implenia.com

About Implenia Implenia is the leading Swiss construction, civil engineering and service company born of the merger of several building contractors and proud of a successful tradition spanning more than 100 years. Implenia is dedicated to the entire life cycle of projects above and below ground. With approx. CHF 3 Bn sales and 6'500 employees Implenia is by far the largest Swiss company in the industry.

About Russian Land Russian Land is a premium real estate development and services company. It covers all aspects of the value chain of real estate development, from identifying and acquiring prime objects to designing and developing them together with the world´s leading architects and specialists.

Russian Land´s business model is based on a "Best in Class" approach. Russian Land is iden¬tifying and acquiring the best locations (prime sites in Moscow and St Petersburg and strategic targets within the regions), developing them with best quality assets and maximizing risk-adjusted returns through optimal financing and partnerships.

Forward-looking statements This press release contains statements, which express the current beliefs and expectations of the management of Implenia.  Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond our control, that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such statements. Actual results could differ mate¬rially depending on a number of factors, and we caution not to place undue reliance on the statements contained in this press release.  Statements speak only as of the date on which they are made and Implenia undertakes no obli¬gation to update these statements, even if new information becomes available in the future.

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ots Originaltext: Implenia AG
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Aloys Hirzel
Hirzel.Neef.Schmid.Konsulenten
Tel. 043 344 42 42
Aloys.hirzel@konsulenten.ch

Branche: Building materials
ISIN:      CH0023868554
WKN:        2386855
Index:    SPI, SSCI, SPIEX
Börsen:  SWX Swiss Exchange / official market



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