XXI Century mulls partnerships or project disposals

XXI Century (XXIC LN: BUY) said yesterday that in order to form JVs with potential partners or to dispose of current projects, it released subsidiaries, Kvadrat Ukraine, Elit Service, Ozzon Logistic and Evrogradobud from guarantee obligations for its USD 175 mln 2010 Eurobonds, and its USD 150 mln 2011 Eurobonds. According to the company, the subsidiaries developed retail, logistics and residential properties. CEO Lev Partskhaladze said a large international financial institution was among the company’s potential partners. Alexander Romanov: We think that the partnership or disposal of projects is a forced move, given tight conditions on capital markets. At the moment, it is not clear at what price a potential partner would enter XXI Century’s projects or, in case of the disposal, the selling price. In our view, the price ratio to the projects’ NPV will be critical for understanding current valuations of real estate assets and will affect the direction of the stock.