* 2008 net loss $1.1 bln vs 2007 net profit of $698 million
* Asset impairment charge of $967 million
* Expects difficult year for Russian real estate in '09
* Seeking debt restructuring agreement with lenders
* Revenues fall 38 percent to $1.4 bln
(Adds details, quotes, background)
By Robin Paxton
MOSCOW, May 13 (Reuters) - Indebted developer PIK Group swung to a $1.1 billion net loss in 2008 after taking a $967 million asset impairment charge and expects another tough year for Russian real estate as consumer confidence falls.
PIK, one of Russia's leading housing developers, is proposing a four-month freeze on debt repayments and aims to cut costs by more than 30 percent, a process that has already resulted in 2,500 job losses, the company said in a statement on Wednesday.
"The economic outlook is still uncertain, and substantial challenges lie ahead. We believe that the next 12 months will continue to be difficult for the Russian economy and for Russian real estate developers," Chief Executive Kirill Pisarev said.
Consumers in Russia, where unemployment has risen to an eight-year peak of 10 percent, have curbed spending as the once-buoyant economy enters its first recession in a decade. Consumer confidence plumbed a 10-year low in the first quarter.
Real estate is among the sectors most affected by Russia's economic slowdown and is struggling to repay debts amassed in recent years to fuel ambitious growth plans. Developers felt the effects most acutely in last year's fourth quarter.
PIK said 2008 revenues fell 38 percent to $1.4 billion after a sudden drop-off in new apartment sales during the fourth quarter, the period when most completions usually take place.
PIK completed more than 12,380 apartments, or 813,000 square metres, last year -- slightly more than half its 2007 total.
Its $1.1 billion net loss reversed a 2007 profit of $698 million and marks a turnaround of the $93 million net profit for the first half of 2008 that PIK reported in September.
As well as the decreasing revenues and impairment charge, which was attributable mainly to development rights, PIK said it suffered from higher operating costs and a lack of sales from development rights. Shareholders' equity shrank by 66.7 percent to $682 million, the company said in the statement.
DEBT RESTRUCTURING
PIK, which had a net debt of $1.26 billion at the end of 2008, has postponed non-essential capital expenditure and frozen plans to expand into new Russian cities and other ex-Soviet countries.
"In the short term, the group is focused on negotiating revised lending terms with its banks, with the aim to stretch maturities and reduce overall debt levels in the future," the company said in the statement.
"Talks with our banks include a proposal for a four-month 'standstill' agreement in respect of existing debt repayment and interest charges," PIK said, adding it had received consent from the major creditor within the group.
"Debt restructuring could be finalised during summer 2009."
PIK said it had a 2008 loss of $1.06 billion before interest, taxes, depreciation and amortisation, compared with earnings before interest taxes depreciation and amortisation of $937 million a year earlier.
Its normalised net loss last year totalled $167 million, down from a year-earlier normalised net profit of $329 million.
Banking tycoon Suleiman Kerimov this year acquired a 25 percent stake in PIK from the developer's two founding shareholders, CEO Pisarev and partner Yuri Zhukov.
The founders together own 49 percent and a further 26 percent is traded on the stock market.
PIK's Moscow-traded shares had fallen 5.9 percent by 1011 GMT, underperforming the broader market, which was down 1.9 percent. (Editing by Will Waterman and Karen Foster)