21 February 2020

King & Wood Mallesons advises private equity firm, Flotonic Limited, on the USD 413 million takeover of AFI Developments Plc.

Law firm King & Wood Mallesons has advised Flotonic Limited, a private company incorporated in the Republic of Cyprus (“Flotonic”), on its takeover bid for London premium listed AFI Developments Plc (“AFI”), which became unconditional on 14 January 2020 and on the proposed subsequent delisting of AFI.

The takeover bid involved separate offers by Flotonic for the Global Depository Receipts (“GDRs”) representing A Ordinary Shares in AFI and for the B Ordinary Shares, in each case not already owned by Flotonic. The offers valued the shares in AFI at USD 413 million and were funded by new financing arrangements entered into by Flotonic.  

In addition to advising on the takeover bid, the King Wood & Mallesons London team also advised on the new financing arrangements and the applications to the (i) Financial Conduct Authority to cancel the GDRs and the B Ordinary Shares from the Official List; (ii) London Stock Exchange (“LSE”) to cancel the admission to trading of the GDRs and B Ordinary Shares on the Main Market of the LSE; and alongside local Cypriot counsel (iii) Cyprus Securities and Exchange Commission to approve a compulsory acquisition of approximately 2.17% of the total share capital under Cypriot law.

Headquartered in Russia and with a portfolio of more than 75,000 square meters of completed properties, AFI Developments Plc is a leading Russian property developer which primarily focuses on large-scale development projects in Moscow and the Moscow region.  AFI Developments was successfully admitted to the Main Market of the LSE in 2007, raising approximately $1.4 billion through the IPO, by selling an 18% stake. 

Flotonic is controlled by former AFI chair Mr. Lev Leviev. This takeover provided “certainty for AFI investors amid rising market volatility for the Russian real estate market.” 

The London based King & Wood Mallesons team was led by corporate partners Greg Stonefield (who listed AFI’s GDRs and B Ordinary Shares on the LSE) and Joseph Newitt and included finance partner, Khai Nguyen, corporate senior associate Jenny Goodrich, finance associate Jenny Zhao and corporate associate Cassandra Ditzel. 

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