25th Jul 2016 14:32
LONDON (Alliance News) - AFI Development PLC on Monday said it is currently anticipated that VTB Bank PJSC will agree to defer the payment of amounts due by AFI under two loan facilities for 10 months, and not enforce prior breaches of the facilities.
This is expected to provide the Russian property investor 10 months in which to repay in full the Ozerkovskaya III Loan Facility, under which USD191.1 million is currently outstanding. It plans to fund this by selling its Ozerkovskaya III property to VTB Bank and potentially other properties.
This is part of ongoing negotiations between the AFI's executive chairman and VTB Bank for terms of a personal guarantee for the company's obligations in respect to the Ozerkovskaya loan facility and the AFIMALL City loan facility.
If AFI Development does not repay the loan facility in full, this guarantee from Leviev would become enforceable, and following payment from Leviev of all the amounts outstanding and the dismissal of the loan facility, a new loan between AFI and Leviev would become effective with the same interest rate and maturity as the Ozerkovskaya facility.
AFI noted there can be no certainty as to whether or not this guarantee would be agreed, or approved. However, shareholders will vote on the disposal of the properties to VTB at a general meeting August 1. If not approved, it noted that, based on its talks with VTB, the Russian investment bank would exercise its rights to demand an accelerated repayment of the loans, and AFI would not be able to meet this demand.
Shares in AFI were up 3.7% in London at 0.177 pence Monday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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