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MOSCOW, Dec 19 (Reuters) - Russian residential property developer PIK Group has won 4.03 billion roubles ($145.3 million) worth of City of Moscow contracts to sell residential property in the Moscow region.
Under the deal, PIK will sell 70,000 square metres of residential property to the City of Moscow government for 53,730 roubles ($1,938) per sq m.
"The strategy is fight for survival and focus on cash flow, not so much on profitability. Margins are not particularly important. what is important is just perking up your balance sheet," Renaissance Capital analyst Alexei Yazykov said.
"They aren't making much of a profit but they are breaking even."
PIK shares are down 96 percent to 97 percent in the year-to-date, one of the hardest hit Russian shares during the financial crisis.
PIK said in late October it won $1 billion in housing construction contracts in a large city government tender, the initial terms of which involved 300,000 sq m of housing to be sold at a range of $2,900-$3,400 per square metre.
However, part of the tender results were effectively cancelled, according to media reports, after the city proposed lowering the price by 12 percent to 17 percent, citing falling housing prices.
PIK shares rose more than 7 percent in Moscow, a modest rise compared to regular double digit swings in its share price.
A PIK official told Reuters the company planned to hand over the property to Moscow in the first quarter of 2009. ($1=27.73 Rouble) (Reporting by Maria Plis and Yulia Komleva; writing by Melissa Akin; editing by Simon Jessop)