AFI Development PLC AFI DEVELOPMENT AGREES TO SELL BUILDING 3 (7081W)
April 23 2019 - 2:00AM
UK Regulatory
TIDMAFRB TIDMAFID
RNS Number : 7081W
AFI Development PLC
23 April 2019
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")
AFI DEVELOPMENT AGREES TO SELL
THE REMAINING BUILDING AT AQUAMARINE III
(CLASS 2 TRANSACTION NOTIFICATION)
London, 23 April 2019 - AFI Development Plc announces that it
has agreed to sell Building 3 at the completed Aquamarine III
Business Centre in Moscow to a leading Russian bank (the "Buyer")
for a total cash consideration of RUR4.45 billion (circa US$69.5
million), net of the applicable Russian VAT.
The transaction comprises the sale of office premises,
underground parking and a share of commonly owned service areas at
the Aquamarine (Ozerkovskaya) III Business Centre at 22-24,
Ozerkovskaya embankment, Moscow, Russia. The transaction consists
of two Russian law governed agreements: a sales-purchase agreement
related to 18,758.6 sq.m of gross buildable area (including 199
underground parking units) and a sale-purchase agreement related to
a circa 27% share in the title to the premises of 3,728.6 sq.m of
gross buildable area ("the Transaction agreements").
The Aquamarine (Ozerkovskaya) III Business Centre is an office
complex forming part of the "Aquamarine" mixed-use development,
located on the Ozerkovskaya embankment in the historical
Zamoskvorechie district of Moscow. The development includes four
Class A buildings with shared underground parking. In 2013, AFI
Development disposed of Building 1, while in 2017 it disposed of
Buildings 2 and 4. Following the disposal of the three buildings,
the Business Centre has 18,758.6 sq.m of gross buildable area and
199 parking units.
The transaction consideration shall be satisfied in two
tranches: 50% of the consideration is to be paid upon execution of
the Transaction agreements, with the remaining 50% due once the
Buyer has been registered as owner, in accordance with Russian
law.
The value of the gross assets subject to the transaction is
US$57.4 million, as recorded in the consolidated IFRS accounts of
the Company.
The disposed property is leased to a number of office tenants.
Based on the 2018 preliminary annual financial results, the
property contributed US$2.4 million to the gross profit and
negative US$10.6 million to the net profit in the consolidated
financial statements of AFI Development.
The transaction will be subject to Russian profit tax estimated
at RUR347 million (circa US$2.3 million on the consolidated level
net of deferred tax liability). As a result of the transaction on
the consolidated IFRS accounts, the Company expects to incur a net
profit of about US$8.1 million. After the disposal, the Company
will no longer pay property tax on the property, which amounted to
RUR48 million (circa US$750 thousand) in 2018.
The Company intends to use net proceeds of the sale to partially
repay external loans (to Bank VTB PJSC) and to finance construction
of its development projects.
- ENDS -
For further information, please contact:
AFI Development, +7 495 796 9988
Ilya Kutnov, Corporate Affairs/Investments Director (Responsible
for arranging the release of this announcement)
Citigate Dewe Rogerson, London +44 20 7638 9571
Sandra Novakov
Lucy Eyles
This announcement contains inside information.
About AFI Development
Established in 2003, AFI Development is one of the leading real
estate development companies operating in Russia.
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 favorable 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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