16 June 2016

AFI Development Chairman Loan Guarantee - The Telegraph

AFI Development executive chairman Lev Leviev is in talks with VTB Bank on an alternative proposal to the previously announced planned disposal by the company on 26 May of certain of its properties to the bank.

This is in consideration of the settlement of the group's obligations to the bank under loan facilities provided to Krown Investments LLC (the 'Ozerkovskaya III loan facility') and Bellgate Construction Limited (the 'AFIMALL City loan facility').

Leviev has proposed to provide a personal guarantee to the bank in respect of Krown Investments LLC's obligations under the Ozerkovskaya III loan lacility (current balance US$191.1 million) for a period of 12 months from execution of legally binding documents between the Bank and Leviev.

In exchange for the guarantee, it is proposed that the bank would grant the company a 10 month moratorium during which the bank would agree not to accelerate the loan facilities and not to enforce its security under the loan facilities. The guarantee is subject to Leviev retaining effective control over the Company (Leviev currently controls directly and indirectly 48.13% of the voting rights in Africa Israel Investments Ltd, which is the controlling shareholder of the company with a 64.88% in the company). Should Leviev cease to control the company for whatever reason, the Guarantee would terminate.

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