KDD Group Receives Zoning Permit for Kureni Project

According to Interfax, Kyiv Council gave KDD Group (KDDG LN: N/R) a zoning permitfor Kureni project. The project implies building a luxury seven-storey hotel & apartment complex in downtown Kyiv on a land plot of 0.52 ha. The complex’s total area is 7.6 ths m2. The groundbreaking is scheduled for 1Q08, the commissioning for 3Q09. Andriy Gostik: Thezoning permit should enable the company to bring the Kureni project out of the development stage, which should raise the project’s value by the company’s next portfolio valuation by a professional appraiser. However, we think the news will hardly have an immediate material effect on the company’s value, as the Kureni project makes up about 4% of the company’s portfolio NAV. At the same time, the major concern of the market, financing of KDD Group’s portfolio (needs USD 2.0 bln in external funds in 2008-2010), is still unresolved.