VTB Bank Notification

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") 

VTB BANK NOTIFICATION

London, 30 March 2016 - AFI Development, a leading real estate company focused on developing property in Russia, announces that on 29th March 2016 its operating subsidiary AFI RUS LLC received a letter from Bank VTB PJSC ("the Bank"). The letter states that the Bank had reached a conclusion that Bellgate Construction Limited and Krown Investments LLC (the borrowers under the AFIMALL City and the Ozerkovskaya III loan facilities respectively) had experienced, in the opinion of the Bank, 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. According to the letter, the Bank proposed that the Company "implement steps aimed at removing possible negative consequences of the aforesaid circumstances, no later than 30 calendar days from today", otherwise the Bank will exercise its right under the loan facility agreements to claim early repayment of the loans.

As of 31 December 2015, the outstanding loan balance under the AFIMALL City facility was US$415.8 million, and under the Ozerkovskaya III facility US$193 million. 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.

The Company is currently studying its options on reaching an agreement with the Bank.

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For further information, please contact:

AFI Development +7 495 796 9988

Ilya Kutnov

Citigate Dewe Rogerson, London +44 (0)20 7638 9571

David Westover

Sandra 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 of 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 favorable 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.