17 Dec 2012 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")
AFI development disposes of westec four winds limited(Class 2 transaction notification)
London, 17 December 2012 - AFI Development today announces that it has agreed transaction terms and signed a share purchase agreement relating to the disposal of 50% share in its subsidiary, Westec Four Winds Limited ("Westec") to Capricornus Investments Limited, a British Virgin Islands company. Westec has developed and is currently operating the Four Winds office and residential project in Moscow ("The Four Winds Project"). Westec is being sold with its subsidiary Dulverton Limited ("Dulverton"); both Westec and Dulverton operate in Russia through their respective Russian branches (Westec, Dulverton and their Russian branches are hereinafter referred to as "Westec Group").
The primary assets of the Westec Group comprise the fully let Class A office building (with gross leasable area of aproximately 21,950 sq.m.,), underground parking and fully let retail and fitness areas in the residential building (gross leasable area of approximately 5,970 sq.m.). The Westec Group has outstanding debt to Nordea Bank OJSC ("Nordea Bank"), with current balance, including both principal and interest, of approximately US$163 million ("Nordea debt"). The Nordea debt will remain with Westec Group, and Nordea Bank has consented to the transaction. The value of the gross assets of the Westec Group as at 30 September 2012 is US$323.8 million. The Westec Group assets (consolited) were expected to contribute in 2012 annual profit from operations of approximately US$ 16.5 million to AFI Development.
The Four Winds Project was co-developed by AFI Development and S&T Equity (Overseas) Limited (of the "Snegiri Development" Group), with each holding 50% stake in Westec. Both AFI Development and S&T Equity (Overseas) Limited have agreed to dispose of their respective shares in Westec to Capricornus Investments Limited. The consideration to be received by each of the sellers is approximately US$104 million, subject to minor adjustments at completion based on completion accounts. The consideration is capped at US$110 million for each of the sellers. The consideration will be satisfied in cash.
The transaction completion is subject to several conditions, including the approval of the Russian antitrust authority (FAS) to be obtained by the buyer. The parties expect the transaction to be completed in January 2013.
AFI Development expects to receive profit on the transaction in the amount of approximately US$50 million. The transaction will also result in reduction of overall debt of AFI Development following the removal of the Nordea debt from its consolidated balance sheet.
The sale proceeds will be used by AFI Development for development of other projects, which are currently in development stage. The transaction will allow AFI Development to focus on new developments.
Commenting on today's announcement, Mr Mark Groysman, Executive Director of AFI Development said: "We are pleased to announce that we reached an agreement to dispose of our share in Westec. We are confident that the disposal terms are beneficial for AFI Development and its shareholders. The disposal is an illustration of our strategy to dispose of our completed developments for favourable consideration".
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For further information, please contact:
AFI Development, +7 495 796 9988
Ilya Kutnov
Ekaterina Shubina
Citigate Dewe Rogerson, London+44 20 7638 9571
David Westover
Reena MavjeeSandra Novakov
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 favourable 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.
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