XXI Century reviews strategy due to difficult financing conditions

XXI Century Investments is freezing construction of any projects where financing is not in place as a result of increasing lending costs and liquidity shortages in Ukraine's banking sector. The Ukrainian real estate developer and investor said on Monday that the move is part of a review of its business strategy in view of the continued uncertainty and volatility in global capital and financial markets.

The company swung to a loss of $74 mln at end-June 2008 from a profit of $1 bn a year earlier as a result of a $66 mln decrease in revaluation in the first six months of the year. Looking ahead, XXI Century said that it will seek to maximise liquidity through an 'assertive' cost-cutting program which will involve reducing overheads and administrative expenses as well as selling non-core assets, exiting non-core businesses and attracting investors and partners for its projects and systemic businesses.

'In the immediate and short term, we will concentrate on improving liquidity and generating cash by refocusing the company's business model,' said Lev Partskhaladze, chairman and CEO.

The investor expects difficult financial market conditions will impact Ukraine's banking sector, resulting in increased financing costs and liquidity shortages and affecting both developers and consumers.

Currently, the company has four projects in construction mode: three Kvadrat shopping centres located in Kiev, Lviv and Sevastopol as well as a residential scheme in Sevastopol.