XXI Century Investments Public Ltd Final stage of negotiations with DIY Operator (8065Q)
10 November 2012 - 2:30AM
UK Regulatory
TIDMXXIC
RNS Number : 8065Q
XXI Century Investments Public Ltd
09 November 2012
XXI Century Investments Public Limited
("XXI Century" or the "Company")
Final stage of negotiations with DIY Operator
The Company is pleased to announce that one of its wholly owned
subsidiaries (Mriya-Invest LLC) is at the final stage of
negotiations and anticipates signing in the near future an
investment agreement (the "Investment Agreement") with a Ukrainian
subsidiary of an international DIY operator, with its head office
in France (the "DIY Operator").
The Investment Agreement will be in relation to the development
of a DIY superstore near the Vyrlytsya lake on the Bazhana Avenue
site in Kiev (the "Vyrlytsya Project").
A further announcement will be made in due course, it should be
noted that there can be no certainty that the Investment Agreement
will be entered into.
The size of the entire land plot which is leased by the Company
from the Ukrainian authorities, including the land plot to
potentially be developed for the DIY superstore (and all other
potential related developments) is approximately 146,835 square
meters (14.684 hectares). The size of the whole development area
including the DIY superstore (and all other potential related
developments) will be approximately 98,487 square meters (without
parking). The size of the land plot for potential development of
the DIY superstore upon completion is approximately 1.6354
hectares. The size of the premises of the DIY superstore will be
approximately 15,058 square meters.
The Investment Agreement
Development costs
The development cost of the DIY superstore is anticipated to be
approximately US$28 865 884, which will be provided by the DIY
Operator to the Company in stages dependent on completion of each
phase of the development, namely: (i) the payment of 30% of the
investment cost, payable as two prepayments; (ii) the payment of
70%, in tranches, of the investment cost following completion of
the appropriate construction development stages according to the
timetable set out in the Investment Agreement: completion of the
construction of the DIY superstore; obtaining the ownership
certificate in relation to the DIY superstore and transfer of it to
the DIY Operator; opening of the shopping centre and solution of
all land title and property management issues according to the
Investment agreement and procurement of the bank guarantee of
performance of warranties with respect to the ready property.
Bank Guarantees
The Company under the Investment Agreement will have an
obligation to provide the DIY Operator with a bank guarantee of
approximately 30 per cent of the value of the Investment Agreement.
The DIY Operator will in turn also provide the Company with a bank
guarantee of approximately 70 per cent of the value of the
Investment Agreement. The Investment Agreement is conditional upon
provision of these bank guarantees. The deadline for exchange with
the bank guarantees will be set out in the Investment
Agreement.
Company obligations under the Investment Agreement
The Company will be required to settle all land issues as
required for the Vyrlytsya project, to complete construction of the
DIY superstore, to register title to it on behalf of the DIY
Operator and to open the DIY superstore and the shopping centre not
later than 30 months after the first pre-payment by the DIY
Operator which is expected following the delivery of bank
guarantees as detailed above.
The Company will be also required to: i) obtain all necessary
documentation, including permissions and consents for the
construction of the DIY superstore (within 12 months of the of
first prepayment), including a technical feasibility study
confirming that the land plot can be developed (after which the
second pre-payment is expected); ii) provide the full scope of
services in relation to the construction of the DIY superstore;
iii) obtain all necessary documentation in relation to the DIY
superstore in order to transfer title of the property on completion
to the DIY Operator; and iv) to ensure the servicing and management
of the ready property and the common areas of the shopping
centre
In the event that the Company is unable to comply with its
obligations under the Investment Agreement as set out above and
within stipulated time frames (other than as a result of public
regulatory changes implemented by the Ukrainian authorities), the
DIY Operator may terminate the Investment Agreement and reclaim any
payments already made under the bank guarantee from the Company and
penalties as provided by the Investment Agreement. Equally in the
event of a breach by the DIY Operator, the Company will be entitled
to claim payments under the DIY Operator bank guarantee and to
claim penalties.
In the event of signing of the Investment Agreement the Company
has also agreed to set up a separate SPV company together with the
DIY Operator or to enter into another arrangement, as may be
required pursuant to the Investment Agreement, i in order to
re-execute (extend) land title from the Ukrainian authorities for
the development of car parking facilities and engineering networks
(including: sewer, water supply, electricity supply, gas supply,
ventilation, etc.) for the DIY superstore and the shopping centre
and in order to service and manage the ready property.
For further information, please contact:
XXI Century Investments Public Limited +380 44 2000 457
ir@21.com.ua
Oleg Salmin, Chief Executive Officer
Shore Capital and Corporate Limited +44 (0) 20 7408 4090
Anita Ghanekar
Toby Gibbs
This information is provided by RNS
The company news service from the London Stock Exchange
END
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