XXI Century Investments Public Ltd Project and Funding Update (0695K)
24 July 2013 - 11:47PM
UK Regulatory
TIDMXXIC
RNS Number : 0695K
XXI Century Investments Public Ltd
24 July 2013
24 July 2013
XXI Century Investments Public Limited
("XXI Century" or the "Company")
Project and Funding Update
The Company provides the following update to the market to
coincide with the end of its half year to 30 June 2013.
Vyrlytsa Project
As previously announced the Company has established a
partnership with Auchan, an international retail chain of
supermarkets and hypermarkets. The Investment Agreement in relation
to the development of an Auchan hypermarket on the Vyrlytsa lake,
Bazhana Lane highway site in Kiev (the "Vyrlytsa Project") was
signed in April 2012. There are also ongoing negotiations on the
development of other sites in Kiev and regions in Ukraine.
Other agreements
In January 2013 the Company signed an Investment Agreement with
a major DIY operator, Leroy Merlin. The Investment Agreement is in
relation to the development of a DIY hypermarket at the
Vyrlytsa,site.
There are on-going negotiations with both Auchan and Leroy
Merlin in respect of exchange of bank guarantees which is a key
condition to obtaining financing for development of the initial
phase of the Vyrlysta Project.
Funding requirements
As announced in November 2012 the Company's subsidiary Barwen
Holding Limited signed a loan agreement with the subsidiary of the
Company's significant shareholder DCH IMMO Limited (the "Loan
Agreement"), according to which the Group will be provided with USD
38 million for the development of the Vyrlytsa Project subject to
certain conditions.
The Company has commenced discussions with DCH IMMO Limited
("DCH IMMO") in relation to the fulfilment of these conditions and
a further announcement will be made in due course. To date the
Company has used its existing cash resources to fund on-going
expenses in relation to the Vyrlysta Project in the region of
US$3.5 million. In the event of further delays or issues arising in
relation to any potential drawdown of the DCH loan, the Company
would not be able to commence the initial phase of development of
the Vyrlytsa Project which could also result in additional expenses
being incurred by the Company.
As previously announced, the management of the Company continues
to explore options with regard to financing arrangements with
several leading local and foreign banks operating in the Ukraine to
fund its developments. The availability of bank financing in the
Ukraine for the development and construction of projects is limited
by the substantial write-offs and delinquencies that local banks
experienced following the impact of the global financial crisis on
Ukraine's economy.
In the context of the Company's continued ongoing losses and
expenses incurred in relation to the Vyrlytsa project which have
been funded by the Company's existing cash rather than through
development capital, the Board continues to recognise the need to
supplement the Company's cash resources both for its development
projects and ongoing working capital requirements. Accordingly, the
Directors have instituted measures to preserve cash and discussions
with providers of finance are on-going to secure additional funding
in order for the Company to continue with its activities. The
Company is also exploring other financing options including the
disposal of non-core assets.
Discussions with providers of finance including Ovaro Holding
Limited (a company which currently holds 58.26 per cent. of the
issued ordinary shares of the Company and which is jointly owned by
DCH IMMO and Bremille Investments Limited) have been initiated. The
Company currently has sufficient working capital to fund its
immediate running expenses, following which it will be reliant on
the financial support of its existing substantial shareholders,
with the details of such support dependent on the outcome of
negotiations between the parties.
The significant progress that has been made in the restructuring
of the Group's liabilities and the agreements with Auchan and Leroy
Merlin are positive developments. However, there remain significant
risks primarily in relation to the Ukrainian macro environment.
Although the Ukraine's real estate sector is still vulnerable to
weaknesses in its major markets, the Directors and management
anticipate that the Ukrainian real estate market and property
values are on a path of slow recovery. The Directors believe that
the general long-term outlook for the Ukrainian real estate market
and its participants is cautiously optimistic.
The Company will continue to focus on securing additional
funding to enable it to deliver on its planned developments and
overall strategy.
Enquiries:
XXI Century Investments Public Limited +380 44 2000 457
ir@21.com.ua
Irina Tkachenko, Investor Relations Manager
Shore Capital & 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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