OREANDA-NEWS. On 03 July 2009 XXI Century Investments Public Limited (LSE: XXIC) announced that it has exited its Kharkiv real estate development partnership in Kharkiv. XXI Century sold its share in Kharkiv joint venture company Starmac Limited to its partner Rodnex Investments Limited and its share in Econom Plus LLC to a local developer Melon Real Estate LLC, for a total consideration of USD5.0 million (the "Exit"). The consideration is payable in instalments and secured by a pledge of shares and mortgages on immovable property situated in Kharkiv. Further details of the Exit are set out below.

XXI Century's current strategy seeks to conserve cash, minimise expenses and focus on core projects in retail and high-end residential developments. The disposal of its interest in the Kharkiv joint venture companies will reduce the Company's operating expenses by eliminating the payments on Kharkiv land leases and the maintenance of the office in Kharkiv. Profits generated to date by these companies have been minimal and insignificant.

As part of the terms of the Exit, the Company has sold its 99.99% share in Econom+ operating office centre which was held through Econom Plus LLC, for USD3.2 million, payable in two equal installments by 21 June 2010 and by 20 December 2010. The 99.99% share of Econom Plus LLC is pledged to XXI Century to secure these payments.

As part of the Exit, XXI Century has disposed of its interest in Starmac Limited, through which it previously held an indirect interest in the following projects, all of which were at the pre-development stage:

48.8% in Kharkiv-Solta mixed-use project;

65.0% in Kharkiv-Korka retail project;

65.0% in Kharkiv-Pesochin logistics project; and

58.5% in Kharkiv-Peski residential project.

The aggregate consideration for the disposal of the Company's interest in Starmac Limited is USD1.8 million, which shall be payable in two installments as follows: USD1.3 million is to be paid by 21 December 2009; and the remaining USD0.5 million by 20 June 2011. The payments are secured by a mortgage in favour of XXI Century over an operating industrial property in Kharkiv.

The Company intends to use the proceeds from the Exit to continue to finance land lease payments on its real estate assets, seek to maintain its operational liquidity and repay a portion of its financial obligations.