XXIC Xxi Century

TIDMXXIC

RNS Number : 3024V

XXI Century Investments Public Ltd

10 January 2013

10 January 2013

XXI Century Investments Public Limited

("XXI Century" or the "Company")

Signing of Investment Agreement with French DIY Operator established in Ukraine

Further to the announcement of 09 November 2012 the Company is pleased to announce that on 09 January 2013 its wholly owned subsidiary (Mriya-Invest) signed an investment agreement (the "Investment Agreement") with a French DIY Operator, established in Ukraine("DIY Operator").

The Investment Agreement is in relation to the development of a DIY hypermarket on the Vyrlytsa, Bazhana Lane site in Kiev (the "Vyrlytsa Project").

The size of the land plot which is leased by the Company from the Ukrainian authorities, including the land plot under development for a DIY Operator hypermarket (and other potential related developments) is approximately 147,346 square meters (14.7346 hectares). The size of the whole development area including the DIY Operator hypermarket (and all other potential related developments) is approximately 98,487 square meters (without parking). The size of the land plot under development with DIY Operator is approximately 1.6354 hectares. The size of the premises of the DIY Operator hypermarket is approximately 15,058 square meters.

The Investment Agreement

Development costs

The development cost of the hypermarket amounts to approximately US$28,865,884, which will under the Investment Agreement be provided by DIY Operator to the Company in stages dependent on completion of each phase of the development, namely:

   (i)         approximately US$ 8.6 million payable as two first prepayments; and 

(ii) approximately US$ 20.3 million payable following fulfillment of obligations under the Investment Agreement including the completion of the appropriate construction development stages according to the timetable set out in the Investment agreement.

Bank Guarantees

Under the Investment Agreement the Company has an obligation to provide such DIY Operator with a bank guarantee of approximately 30 per cent of the value of the Investment Agreement. 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. This Investment Agreement is conditional upon provision of these bank guarantees. Each of the Company and DIY Operator are obliged under the terms of the Investment Agreement to exchange bank guarantees on or around 28 February 2013.

Company obligations under the Investment Agreement

Under the Investment Agreement the Company is required to complete construction of the hypermarket not later than 30 months after the first pre-payment of US$4.3 million by DIY Operator which is expected following the delivery of bank guarantees as detailed above.

The Company is also required to:

i) obtain all necessary documentation, including permissions and consents for the construction of the hypermarket (within 12 months of the of first prepayment of US$4.3 million), including a technical feasibility study confirming that the land plot can be developed (after which the second pre-payment of US$4.3 million is expected);

   ii)         provide services in relation to the construction of the hypermarket; and 

iii) obtain all necessary documentation in relation to the hypermarket in order to transfer title of the property on completion to DIY Operator.

In addition to constructing the hypermarket for DIY Operator, the Company is also obliged to develop a shopping centre (gallery) at the remaining Vyrlytsa site and ensure that 60 per cent of the Global Leasing Area ("GLA") of the first and second floor of the shopping centre (gallery) will be leased by tenants by the opening date of both the hypermarket and the shopping centre (gallery).

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 regulatory or other changes implemented by the Ukrainian authorities), DIY Operator may terminate the Investment Agreement and reclaim any payments already made under the bank guarantee from the Company. Equally in the event of a breach by DIY Operator, the Company can claim payments under the DIY Operator bank guarantee.

The Company has also agreed to set up a separate SPV company together with DIY Operator in relation to the lease of additional land from the Ukrainian authorities to develop car parking facilities and engineering services (including: sewer, water supply, electricity supply, gas supply, ventilation, etc.) for the hypermarket and the shopping centre development.

For further information, please contact:

   XXI Century Investments Public Limited                                          +380 44 2000 457 

ir@21.com.ua

Iryna Tkachenko, Investor Relations Manager

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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