VTB fears that AFI Development's subsidiaries will not be able to repay the loan on time. The developer claims that he does not know the reasons that made the bank think about the viability of its structures

Businessman Lev Leviev (Photo: RIA Novosti)

VTB notified the AFI Development company of businessman Lev Leviev that its subsidiaries Bellgate Construction Limited and Krown Investments LLC, which are borrowers in the Afimall City and Ozerkovskaya III projects, are not able to repay their debt obligations on time, Reuters reports from referring to a post by AFI Development on Wednesday.

The bank believes that AFI Development's subsidiaries have experienced "significant adverse changes in financial conditions" and also notes "other circumstances indicating that their obligations under the loan agreements cannot be fulfilled on a timely basis," the company said. VTB gave the developer 30 calendar days to eliminate unfavorable circumstances and reserved the right after the expiration of this period to demand early repayment of debts, AFI Development reported.

“The AFI Development Group is currently exploring opportunities to reach an agreement to resolve this issue with VTB Bank,” said Mark Groysman , CEO of AFI RUS, the management company of AFI Development.

As of December 31, 2015, the balance of the credit debt of Afimall City was $415.8 million, the Ozerkovskaya III project was $193 million, notes Reuters .

Bellgate Construction Ltd. and Krown Investments “deviate significantly from the financial model previously agreed upon with the bank,” VTB’s press service reported on Wednesday. The press service noted that this happened “due to currency revaluation.”

“We expect debt repayment in the near future. We believe that companies have the opportunity to repay their debt ahead of schedule and hope to come to a constructive solution to this issue,” said the VTB press service.

AFI Development was founded in 2001 and is a subsidiary of the international holding Africa Israel Investments Ltd. Among the company's Russian projects are the Afimall City shopping center in Moscow City, the Aquamarine III, Plaza H2O, Riverside Station business centers and others. Lev Leviev, who owns a controlling stake in AFI Group, ranks 23rd in the “Kings of Russian Real Estate” ranking according to Forbes.

In July 2015, RBC, citing sources , wrote that AFI Development froze the construction in Moscow of three office complexes under the general name “Tverskaya Zastava” and the Expolon wholesale trade complex.

The owner of Afimall City reported VTB claims for loans