OREANDA-NEWS. August 12, 2011. XXI Century is pleased to announce that multi-currency term loans totaling circa USD 32.7 million originally provided by UkrSibbank PJSC to wholly-owned subsidiaries of XXIC have been successfully assigned and restructured with two independent third parties, both of which are controlled by the same independent group.

In view of the complexity of the arrangements, the assignment and restructuring was executed in several stages. In the first stage, UkrSibbank PJSC assigned the term loans of Kyivsky Kashtany LLC, Khrizolit LLC, Torgovy Centre A CJSC and Kvadrat Ukraine CJSC, all of which totaled USD 32.7 million to third parties.

In the second stage, liabilities amounting to USD 12.1 million (representing 37.0% of the total outstanding loans USD 32.7 million) were cancelled on the condition that XXIC immediately repaid USD 16.6 million of loans and agreed to pay the balance of USD 4.0 million prior to 12 May 2012. This USD 4.0 million loan is secured by a pledge of corporate rights belonging to the aforementioned wholly-owned subsidiaries which, in turn, control sites in Kyiv, Sevatopol and Lviv.

In the third stage, in order to fund the USD 16.6 million repayment of loans mentioned above, the Company has also sold its shopping centre, Kvadrat Lukyanivka, to Monkar Limited for USD 14 million and also executed an option agreement which enables XXIC to repurchase Kvadrat Lukyanivka in the fifth year following the date of sale.

The appraisal value of the Kvadrat Lukyanivka shopping centre in the Company's report and accounts for the year ended 31 December 2010 amounted to USD 18.5 million and the net operating income attributable to the shopping centre for the 12 months ended 31 December 2010 was approximately USD 2.1 million and was fully dedicated to serving the aforementioned term loans.

In summary, important and immediate benefits arise from this transaction, namely:

• The elimination of USD 32.7 million of senior secured term loans at a discount of

USD 12.1 million, or 37.0%, together with attendant carrying costs;

• The transaction effectively deleverages the Company's business and balance sheet. As

a result, the directors expect there to be improvements in liquidity and the general working capital position since the net operating income from Kvadrat Lukaynivka was insufficient to service the term loans; and

• By removing the pledge as described above, the Company has eliminated the high risk

of losing 4 attractive sites in Kyiv, Sevastopol and Lviv, all of which are earmarked for developing shopping centers.