30th Mar 2016 09:31
LONDON (Alliance News) - AFI Development PLC said Wednesday two of its subsidiaries could face early repayments of loans, after Bank VTB PJSC sent a letter to the real estate firm saying it had reached a conclusion the subsidiaries could not meet their obligations under the loan facility agreements on time.
AFI Developments said the letter, which its operating subsidiary AFI RUSS LLC received on Tuesday, came from BANK VTB, which is involved in loan agreements with two of AFI Development's subsidiaries, Bellgate Construction Ltd and Krown Investments LLC.
According to the letter, the bank has reached the conclusion that the two subsidiaries have experienced "material adverse changes in their financial conditions and there had appeared other circumstances that indicate that their obligations under the loan facility agreements could be not met on time".
AFI Development said the bank proposed that it "implement steps aimed at removing possible negative consequences of the aforesaid circumstances, no later than 30 calendar days from today", or the bank may exercise its right to claim early repayment of the loans.
The AFIMALL City facility, which was agreed with Bellgate Construction in 2012, has an outstanding loan balance of USD415.8 million, whilst the Ozerkovskaya III loan facility, which the bank agreed to extend with Krown Investments last year, has an outstanding balance of USD193.0 million, AFI Development said.
The real estate firm said "it is not clear, for what reason the bank came to a conclusion on material adverse change in the case of the AFIMALL City loan", adding it is currently "studying its options on reaching an agreement with the bank".
Shares in AFI Development were down 3.7% at USD0.130 on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
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