Joint Venture Co-operation Agreement Signed by Issuer

Report number 55/2022

Legal basis: Article 17(1) of MAR - inside information

Develia S.A.’s Management Board (the “Issuer”) inform that on 24 October 2022 the Issuer, Hillwood Malin Development Logistics, LLC, based in City of Wilmington (“Hillwood”) and Bunclodico Investments spółka z ograniczoną odpowiedzialnością, based in Warsaw (“JV”), i.e. companies from the group of companies the part of which is Hillwood Polska Sp. z o.o., based in Warsaw (the “Partners”), made a co-operation agreement to carry out together a project using one or more joint ventures on a real property located in Malin, Wisznia Mała Municipality (the “JV Agreement”). In principle, the JV Agreement was entered into under terms and conditions set out in a letter of intent concerning joint venture co-operation made on 23/03/2022 between the Issuer and Hillwood Polska Sp. z o.o., based in Warsaw, which was communicated by the Issuer in the Current Report no. 19/2022 of 23 March 2022.

The co-operation under the JV Agreement will entail setting up one or more investment companies with a view to building a logistic park (centre) along with necessary technical and road infrastructure (the “Project”). The Project will derive from the experience of the Issuer and Hillwood, and responsibility for operational management will rest with the Hillwood team. The Issuer’s committment has been set at 25%, whereas Hillwood’s at 75%. Under the basic scenario, the total capital commitment of the Issuer is estimated to be approx. EUR 8.7m and will be completely financed by selling the real property to the JV company.

At the time the JV Agreement was signed, the owner of the real property designated for the Project was an Issuer’s subsidiary, from which the real property will be acquired in stages depending on the progress of works for the Project. According to the Issuer’s estimates, if the Project is completed as originally envisaged, revenue from the disposal of the whole real property will be approx. EUR 34.7m, which exceeds the current value of the real property recognised in the subsidiary’s books, namely approx. PLN 70m.

The commencement of the Project is conditional on changing the purpose of the real property, which is necessary in order for the Project to serve functions relating to the provision of services. Under the JV Agreement, the Partners committed themselves to work together to obtain necessary decisions, as well as to collaborate on the construction and commercialisation of the Project.

The total projected value of the entire Project will exceed PLN 1.5bn, and it is envisaged that it will be completed within six years after the purpose of the Real Property is changed.

The JV Agreement was entered into under the following conditions precedent:

(i)To obtain the consent of the President of UOKiK (the Polish Office of Competition and Consumer Protection) to concentration that involves the creation of a joint venture by the Issuer and Hillwood Malin Development Logistics, LLC; and

(ii) To amend the JV’s articles of association and have that amendment entered in the register of entrepreneurs of the National Court Register.

The other terms and conditions of the JV Agreement, including those relating to joint venture, do not vary from provisions which are generally applicable to this type of agreements.

Legal basis: Article 17(1) in conjunction with Article 7(1a), (2), (3) and (4) of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on market abuse (the Market Abuse Regulation) repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (the “MAR”) in conjunction with Article 2 and 3 of the Commission Implementing Regulation (EU) 2016/1055 of 29 June 2016 laying down implementing technical standards with regard to the technical means for appropriate public disclosure of inside information and for delaying the public disclosure of inside information in accordance with Regulation (EU) No. 596/2014 of the European Parliament and of the Council.