XXI Century to restructure two credit lines

XXI Century (XXIC LN) General Director Georgiy Tsagareishvili said that his company is in the final stages of talks with Ukrsibbank and Eurobank EFG Cyprus of restructuring credit lines with each bank, for USD 56 mln and USD 28 mln, respectively, Interfax reported. According to Tsagareishvili, the loans were backed by two different Kvadrat shopping centers in Kyiv, which are now operational and generating income. Tsagareishvili also said that XXI Century was looking to attract strategic investors for two premium-class residential projects and 2-3 commercial real estate projects by the end of the year. He did not disclose the nature of financial support to be provided by the proposed investors nor potential partners. Andriy Gostik: Earlier, the developer reached an agreement from its 2010 Eurobond holders to restructure the bonds with a total face value of USD 175 mln, as letting the company go bust would probably have left the holders with nothing. With the banks, the loans to the developer are pledged with property in operation and risks are much smaller for these creditors. Yet, they can afford to restructure the debts and continue receiving interest payments from the developer for a longer period than the original loan maturity. The news should be supportive to the stock’s price in the short term. In the longer term, it remains uncertain how XXI Century is going to finance its project construction and repay restructured debts.