2nd Aug 2016 08:59
LONDON (Alliance News) - AFI Development PLC on Tuesday said its Executive Chairman Lev Leviev has executed the guarantee to VTB Bank PJSC which will enable it to defer the payment of amounts due by AFI for 10 months, and said VTB was considering whether to accept the guarantee.
This is part of ongoing negotiations between the AFI's executive chairman and VTB Bank in relation to Leviev's personal guarantee for the company's obligations in respect to the Ozerkovskaya loan facility and the AFIMALL City loan facility.
If the personal guarantee is accepted, it would 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.
If AFI 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.
The personal guarantee was an alternative proposal to that proposed by VTB previously that AFI would be released from its loans in exchange for the disposal of three of AFI's properties to the bank.
AFI in its statement on Tuesday said Leviev executed the guarantee at a meeting with VTB on Monday.
Following this, AFI received a letter from VTB in which the bank said it will defer seeking the disposal of the three properties until September 30, in which time it will consider whether to accept the guarantee.
Shares in AFI were down 2.2% at USD0.170 on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
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