Frontier Development PLC

Capital/Financing Update • Oct 16, 2014

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RNS Number : 5002U

AFI Development PLC

16 October 2014

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION

IN OR INTO THE RUSSIAN FEDERATION, THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN

AFI DEVELOPMENT PLC

("AFI Development" or "the Company")

moscow court RULES to liquidate former primary investor

in the botanic garden project

London, 16 October 2014 - AFI Development announces today that a Moscow court has decided to liquidate the former "primary investor" in the Botanic Garden project, Novoe Koltso Moskvy OJSC ("NKM"), resuming its bankruptcy proceedings. Under Russian law, creditors who do not consent to the liquidation have the right to appeal within 30 days following publication of such decision (which is expected to take place in the next few days). In the event that no appeal is filed, a liquidation record is made in the State Registry of Legal Entities, following which the liquidation becomes final.

As previously announced, in August 2012 AFI Development wrote-off its rights to the Botanic Garden project following initiation of bankruptcy proceedings against the "primary investor" under the investment contract, NKM, whilst simultaneously continuing its efforts to secure development rights to the project.

On 5 February and 21 February 2013, the Company reported that, as a result of negotiations with Moscow city authorities, the Company's development rights to the project had been recognised through an addendum to the investment contract for the project. According to this addendum, NKM shall not have any claims to the investments made by AFI Development in the Botanic Garden project and its subsidiary, Nordservice LLC, became the sole investor under the investment contract.

Based on the opinion of AFI Development's external legal advisers, the Company cannot restore the Botanic Garden project on its balance sheet until NKM has been legally liquidated. Now, a major step towards liquidation has been made.

At present, AFI Development cannot estimate the quantitative effect of restoration of the project on its books; it is now in the process of commissioning a valuation report from its independent appraisers. 

- ENDS -

For further information, please contact:

AFI Development, Moscow +7 495 796 9988

Ilya Kutnov

Ekaterina Shubina

Citigate Dewe Rogerson, London+44 20 7638 9571

David Westover 

Sandra Novakov

Shelly Chadda

About AFI Development

AFI Development is one of the leading real estate development companies operating in Russia. Established in 2001, AFI Development is a publicly traded subsidiary of Africa Israel Investments Ltd.

AFI Development is listed on the Main Market of the London Stock Exchange and aims to deliver shareholder value through a commitment to innovation and continuous project development, coupled with the highest standards of design, construction and quality of customer service.

AFI Development focuses on developing and redeveloping high quality commercial and residential real estate assets across Russia, with Moscow being its main market. The Company's existing portfolio comprises commercial projects focused on offices, shopping centers, hotels and mixed-use properties, and residential projects. AFI Development's strategy is to sell the residential properties it develops and to either lease the commercial properties or sell them for a favourable return.

AFI Development is a leading force in urban regeneration, breathing new life into city squares and neighborhoods and transforming congested and underdeveloped areas into thriving new communities. The Company's long-term, large-scale regeneration and city infrastructure projects establish the necessary groundwork for the successful launch of commercial and residential properties, providing a strong base for future.

Legal Disclaimer

Some of the information in these materials may contain projections or other forward-looking statements regarding future events, the future financial performance of the Company, its intentions, beliefs or current expectations and those of its officers, directors and employees concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and business. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" or the negative of such terms or other similar expressions. These statements are only predictions and that actual events or results may differ materially. Unless otherwise required by applicable law, regulation or accounting standard, the Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia and market change in the industries the Company operates in, as well as many other risks specifically related to the Company and its operations.

This information is provided by RNS

The company news service from the London Stock Exchange

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