A company backed by well-known twins, often referred to as the Brothers Karamazov, has raised $130 million
KDD Group, a top Ukrainian real estate investment and development company backed by well-known twins, often referred to as the Brothers Karamazov, has raised $130 million by floating a nearly 20 percent stake on the London Stock Exchange’s Alternative Investment Market.
Analysts said the Dec. 14 placement raised half the capital expected due to poor performance on world equity markets and an obscure track record. Nevertheless, analysts put the company’s market capitalization at $660 million.
KDD is the fifth Ukrainian real estate development company to go public abroad. Ukrainian groups have issued a flurry of listings this year amid strong interest by investors eyeing real estate growth opportunities. KDD is the third Ukrainian real estate company to list on the LSE.
KDD holds a diversified portfolio of real estate assets, including residential, retail and mixed-use projects. Sources said the group is co-controlled by Vyacheslav and Oleksander Konstantinovsky, vice presidents of the Kyiv-Donbas asset holding, which also manages their Carte Blanche restaurant network and fast-food chain Puzata Khata.
The other KDD stake holders are Oleksander Levin, with a 28.32 percent share, Olena Topolova, the wife of Our Ukraine-People’s Self-Defense lawmaker Viktor Topolov, with an 11.25 percent share, Petro Slipets with 11 percent, and Valentin Muzhchuk, with a share of 3.54 percent, according to the Kommersant business daily.
Market analysts said KDD’s timing for the IPO largely explains the poor results in terms of funds raised.
“International markets are still suffering from the liquidity crisis and investors are reluctant to put money into real estate,” said Andriy Gubachov, an analyst with Alfa Capital Ukraine.
“Another possible reason could be the lack of a track record for the company,” he added.
Gubachov predicted, however, that “as more and more projects enter the construction stage and are completed,” such concerns will be less of an issue.
In 2006, the FBI in partnership with Ukrainian law enforcement foiled an attempted murder plot in which the Konstantinovsky brothers were targeted by two “Russian organized crime figures, Monya Elson and Leonid Roytman,” according to the US Attorney’s Office. Both were arrested.
KDD is currently engaged in eight new projects with a total planned gross area of approximately 2.7 million square meters.
