26 Jun 2012 16:19
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION
IN OR INTO THE RUSSIAN FEDERATION, THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN
AFIMALL City loans refinanced with the VTB Group
London, 26 June 2012 - AFI Development Plc ("AFI Development" or "the Company") today announces that its subsidiary Bellgate Construction Ltd ("Bellgate") has signed a new loan facility agreement with a bank of the VTB Group ("the Bank").
The new loan facility agreement offers a credit line totaling RUR 21 billion, which can be drawn down in 5 tranches, each with a designated purpose: the majority of the funds are designated to refinance existing loans previously issued by VTB Bank (OJSC). The remaining funds are designated for the refinancing of construction costs related to the AFIMALL City parking and for the financing of the outstanding payments constituting part of the consideration for the acquisition of the parking.
The Company has discretion over the currency of each tranche, which can be drawn down either in US dollars or in Russian rubles. The loan facility has differentiated interest rates which are currency dependent: 9.5% for loans drawn down in Russian rubles and 3 months LIBOR + 6.7% for loans drawn down in US dollars. The interest on the loans is payable on a quarterly basis, throughout the term of the credit line. Bellgate has undertaken to make equal quarterly payments of US$ 6.5 million, starting from 2014, on account of the principal of the loans, while it has been agreed that the remainder of the loan will mature in April 2018.
The terms of the loan facility agreement are substantially similar to those of the loan facility agreement entered into in February 2012 with VTB Bank (OJSC) in relation to the financing of the acquisition of the AFIMALL City parking (for more information regarding the said loan facility, please see Annex A to Q1 2012 results announcement, published by the Company on 22 May 2012). However, certain conditions of the new loan facility will differ from the aforementioned loan, including the following:
a) The guarantee of AFI Development Plc over the obligations of Bellgate under the loan facility agreement will be in the amount of US$ 1 million, the nominal value of Bellgate's shares;
b) Additional mortgage over the premises of "Aquamarine" Hotel will be registered in favour of the Bank. This shall be removed in the case that Bellgate redeems US$20 million of principal;
c) Additional guarantee will be provided to the Bank by Semprex LLC, a Russian company which is an indirect subsidiary of AFI Development Plc, and owner of the "Aquamarine" Hotel. This shall be removed in the case that Bellgate redeems US$20 million of principal;
d) The turnover covenant has been changed from monthly bank accounts turnovers of not less than RUR 200 million to quarterly revenues (including VAT) exceeding agreed thresholds, determined as amounts gradually increasing from RUR 651 million for Q3 2012 to the amount of RUR 1,139 million for Q1 2018. The penalty for not meeting the covenant is changed from 1% additional interest for the next month to 0.5% additional interest for the next quarter.
The loan facility agreement contains other generally acceptable terms, such as the borrower undertaking to maintain the aggregate value of the pledged assets, securing the loan facility, providing the lender with periodic reporting and similar common conditions.
The current loan facility and its favorable conditions were the result of negotiations with several financial institutions, which resulted in an agreement with VTB Group, a long term financing partner of the Company.
Commenting on today's announcement, Mr. Mark Groysman, Executive Director of AFI Development said: "We believe that we have obtained beneficial conditions on the loan package signed, especially taking into account today's unstable market environment. This loan facility reflects the market's continued confidence in AFI Development and will serve to further improve the AFI Development Group's financial position."
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For further information, please contact:
AFI Development, +7 495 796 9988
Alexander Adadurov
Ilya Kutnov
Citigate Dewe Rogerson, London +44 20 7638 9571
David Westover
Sandra Novakov
Reena Mavjee
About AFI Development
AFI Development is one of the leading real estate development companies operating in Russia. Established in 2001, AFI Development is a publicly traded subsidiary of Africa Israel Investments Ltd.
AFI Development is listed on the Main Market of the London Stock Exchange and aims to deliver shareholder value through a commitment to innovation and continuous project development, coupled with the highest standards of design, construction, and quality and customer service.
AFI Development focuses on developing and redeveloping high quality commercial and residential real estate assets across Russia, with Moscow being its main market. The Company's existing portfolio comprises commercial projects focused on offices, shopping centers, hotels and mixed-use properties, and residential projects. AFI Development's strategy is to sell the residential properties it develops and to either lease the commercial properties or sell them for a favorable return.
AFI Development is a leading force in urban regeneration, breathing new life into city squares and neighborhoods and transforming congested and underdeveloped areas into thriving new communities. The Company's long-term, large-scale regeneration and city infrastructure projects establish the necessary groundwork for the successful launch of commercial and residential properties, providing a strong base for future.