XXI Century Investments has confirmed that it is in talks with a number of potential strategic partners in a bid to address its perilous financial condition. The AIM-listed firm cautioned that the talks are at a preliminary stage. 'There is no certainty that such negotiations will result in a successful conclusion, or that the terms and conditions of any investment would be acceptable to the company's note holders and ordinary shareholders,' XXI Century Investments said in a market update on Tuesday.

Negotiations are also continuing with local banks regarding the restructuring of its secured credit facilities, XXI Century Investments said. The firm sold three non-core assets to a local developer in March for EUR 2 mln to finance ongoing operations.

In addition, XXI Century Investments said it has entered into an agreement with the co-owner of its Luteranska project site to begin the development of a hotel with serviced apartments located in central Kiev.

The partner will provide initial financing of up to circa $12 mln (EUR 9.8 mln) to commence construction and, in return, XXI Century Investment's ownership share in the project will drop from 50.5% to 13.4%. A major international hotel group has expressed strong interest in managing and operating the hotel as its flagship five star hotel in Ukraine.

XXI Century was established in 1999 to develop and manage projects across all major real estate segments in Ukraine. In its half-year report published in June 2009 the company warned that it was in 'survival mode' as its cash position had been aggravated by prevailing poor macroeconomic conditions in Ukraine and associated political uncertainty. XXI Century Investment incurred a loss of $41.5 mln for the six months to end-June 2009 and its liabilities exceeded its current assets by $15.5 mln.