12th Jul 2016 17:42
LONDON (Alliance News) - Russian real estate firm AFI Development PLC late Tuesday said its lender has granted the company's request for more time to negotiate a deal concerning USD614.0 million worth of loans.
AFI Development was expected to make two quarterly payments, of USD1.8 million and USD6.5 million million, to its Russian lender VTB Bank PJSC on the last day of June, but decided not to make those payments after it applied for a deferral as the pair held discussions about potentially amending the company's debt facilities.
The bank has now agreed to give AFI Development until the first day of August to make those payments, giving the company a matter of weeks to negotiate a formal deal with its lender over USD614.0 million worth of loans.
AFI Development Executive Chairman Lev Leviev has been holding talks with the bank about an alternative proposal to the agreement signed between the company and the bank over the settlement of the USD614.0 million worth of loans.
Leviev has proposed to provide a personal guarantee to the bank in respect of one of AFI Development's subsidiary loans, totalling USD191.1 million, for a period of twelve months from the execution of the legal documents between Leviev and the bank.
In exchange, it is proposed VTB Bank will grant AFI Development a ten-month moratorium during which the bank would agree not to accelerate the loan facilities and not to enforce its security under the loan facilities.
AFI Development requested the date was extended until the first day of August in order for "further negotiation and documentation" to be completed.
On Tuesday, the company said: "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".
AFI shares closed down 1.0% to 0.123 pence per share on Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
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