1 Jul 2016 07:00
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION
IN OR INTO THE RUSSIAN FEDERATION, THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN
AFI DEVELOPMENT PLC
("AFI DEVELOPMENT" OR "THE COMPANY")
DECISION TO POSTPONE PRINCIPAL PAYMENTS DUE TO VTB
London, 1 July 2016 - Further to the Company's previous announcements regarding its negotiations with VTB Bank PJSC ("the Bank"), the Company provides the following update.
Mr Lev Leviev, the Company's Executive Chairman, is still in negotiations with the Bank in respect of the Guarantee (as defined in the Company's announcement on 16th June 2016) and as previously set out, in the event that the Guarantee is not agreed, the Company will seek to proceed with the Disposal (as defined in the previous announcements by the Company).
As a consequence of the ongoing negotiations regarding the Guarantee and Disposal, the Company has applied to the Bank to grant it a deferral from its quarterly principal payments of US$1.815 million and US$6.5 million due on 30th June 2016, ("the Principal Payments") under the loan facilities provided to each of Krown Investments LLC ("Krown") and Bellgate Constructions Limited ("Bellgate") (together "the Loan Facilities") respectively, to 1st August 2016 ("the Deferral"). The Deferral is subject to the approval of the Bank and entering into addenda to the Loan Facilities to document the Deferral.
Given the above, the Company has determined not to make the Principal Payments on 30th June and to delay these payments until the approval of the Bank is received. The Bank has been informed of the Company's decision to delay the Principal Payments.
Under the Loan Facilities, a delay in making the Principal Payment constitutes a breach of the respective agreements that entitles the Bank to claim immediate repayment of the outstanding amounts of each of the loans. It should be noted, therefore, that there is a risk that the Bank could claim immediate repayments for both loans due to delay in payment. In addition, it should be noted that, as announced on 30th March 2016, the Bank has reached a conclusion that Bellgate and Krown had experienced, in the opinion of the Bank, material adverse changes in their financial conditions and there had appeared other circumstances that indicate that their obligations under the Loan Facilities could be not met on time.
Accordingly, the Bank has been and continues to be able to exercise its rights under the Loan Facilities at any time and in the event that it does, prior to the Guarantee or Disposal being completed, it remains highly probable that there would be a material adverse effect on the Group's operations and on the value of the Company's shares. As announced on 16th June 2016, the parties are aiming to agree either the Guarantee or Disposal by 1st August 2016.
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For further information, please contact:
AFI Development, +7 495 796 9988
Ilya Kutnov
Citigate Dewe Rogerson, London +44 20 7638 9571
David Westover
Sandra Novakov
Marina Zakharova de Calero
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 of 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.