XXI Century seals restructuring of $60m loan

AIM-listed XXI Century Investments announced on Wednesday that it has reached agreement on the restructuring of a debt facility after months of negotiations. In the larger of the two agreements, the company which develops and invests in Ukrainian real estate, formalised the restructuring of its $60 mln (EUR 41 mln) loan agreement with Eurobank EFG Bank.

A principal repayment of $4 mln was made on the loan in November 2008. Under the agreement with Eurobank EFG, no further principal repayments will be made until June 2010. After that 27 monthly repayments of $667,000 will follow until maturity of the EFG loan in September 2012, at which point the remaining unpaid principal amount will be repaid in full.

Monthly interest payments on the EFG loan will be made by XXI Century, based on an interest rate of 7.2% above LIBOR, with 6% above LIBOR being paid in cash, and the remainder being paid, in cash, as a lump sum 24 months after the signing of the EFG loan. Shares of the company's subsidiary, OJSC Avrora, which is the holding company for the Kvadrat-Perova shopping centre and associated land plot, have been pledged as collateral against the EFG loan.

In addition, the corporate rights to the holding company for the Kvadrat-Simferopol site, as well as the site itself, have been pledged as collateral against the amended EFG Loan. The bank has the right to appoint two out of three directors to the Avrora board until the loan is repaid in full.

All net earnings generated by Kvadrat-Perova will be used to service the EFG Loan repayments and any remaining free cash flow shall be used in the repayment of the loan principal. XXI Century has undertaken not to enter into any further debt financing agreements in 2009 without prior written consent from EFG.

In the second restructuring deal, XXI Century's subsidiary, CJSC Kvadrat-Ukraine, entered into a stand-still agreement with Ukrsibbank to extend the repayment of its multi-currency loan, amounting to $17.54 mln, from 26 October 2009 until 26 January 2010. The negotiations with Ukrsibbank are continuing.