AFI Development might pay off $611 mln debt to VTB with assets
MOSCOW. May 18 (Interfax) - AFI Development, the property developer controlled by tycoon Lev Leviev, might pay off loans totaling $611 million owed to Russian state bank VTB with assets, the company said in a report.
This refers to certain major assets with a combined book value of $877 million, AFI said, without specifying exactly which assets might be handed over to the bank. Interfax has so been unable to obtain comments from VTB.
AFI has studied alternative options, such as refinancing at other banks and raising funds from the holding company, but they were deemed undoable, the company said.
In a press release for the publication of its financial statement, AFI said that the bank and the company "are considering the possibility of reaching an agreement to release the AFI Development Group from both loans owed to the bank of current balance of $611.1 million. The bank has communicated to the company that it expects to conclude the negotiations not later than May 31, 2016."
"I believe that the results of our negotiations with the VTB Bank, while removing credit exposure to the VTB Bank and neutralizing the risks related to servicing a foreign currency loan, will ensure further stable development of the company," AFI chairman Leviev was quoted as saying.
At the end of March, VTB sent LLC AFI Rus, the operating division of AFI Development, a notice of its intent to call in the debts of Bellgate Construction Ltd. and Krown Investments in the amount of $415.8 million and $193 million if within 30 days they did not turn around the deterioration in their financial condition, which the bank suspected might prevent them from meeting their credit obligations on time.
The loan for Bellgate Construction was raised for the construction of the Afimall City shopping and entertainment center, while the loan for Krown Investments was extended to finance the Ozerkovskaya III development project.
