OREANDA-NEWS. June 01, 2010. XXI Century (AIM: XXIC LN) reported today in a trading update that it entered into an agreement, with the co-owner of the Luteranska project site, to begin the development of a hotel with serviced apartments located in central Kyiv. The co-owner will provide initial financing of up to ~USD 12 mln to commence construction. In return, XXI Century reduced its effective ownership in the project from 50.5% to 13.4%. According to XXI Century, a major international hotel group has expressed strong interest in managing and operating the hotel as its flagship five star hotel in Ukraine upon completion of this project. In addition, the developer said it closed the earlier announced sale of three non-core projects and received ~USD 1 mln payment for them. At the same time, XXI Century re-iterated that it continues searching for a strategic investor, as its current financial condition precludes further development of its property portfolio without such an investor.

Concorde Capital: Our view on XXI Century remains intact: only if the developer secures a strategic investor able to not only invest into its project portfolio development but also repay debts/ or negotiate for a significant haircut, will XXI Century be able to return to a normal operating mode. Otherwise, bankruptcy risk remains imminent.