Preliminary Sale and Purchase Agreement for Disposal of Arkady Wrocławskie Real Property Concluded

With reference to Current Reports No. 9/2022 of 04 February 2022, 52/2022 of 03 October 2022, 71/2022 of 29 December 2022, 14/2023 of 29 March 2023, 34/2023 of 28 June 2023 and 46/2023 of 28 September 2023, the Management Board of Develia S.A. (the “Issuer” or the ”Company“) inform that on 19 December 2023 the Company, the Issuer’s subsidiary, Arkady Wrocławskie S.A. (“AW” or the “Seller”), in which the Issuer holds 100% of shares along with 100% voting rights attaching to such shares, giving the right to vote at the general meeting, and Vastint Poland spółka z ograniczoną odpowiedzialnością, based in Warsaw (the “Purchaser”) a preliminary sale and purchase agreement (the “PSPA”) for disposal by (i) the Seller of the right of perpetual usufruct to and ownership of real property on which a multi-functional building called “Arkady Wrocławskie” is erected, which is located in Wrocław at 31-33 Swobodna street / 2-4 Powstańców Śląskich street (the “Real Property 1”), and disposal by (ii) the Company of the ownership of real property on which a retail and shopping centre is erected, which is located in Wrocław at 7-11 Komandorska street (the “Real Property 2”).

The price for the Real Property 1 was fixed at EUR 38,690,409 and for the Real Property 2 at EUR 4,209,591, plus VAT due and payable (the “Price”). The Purchaser, having fulfilled specific conditions and provided specific security for returning them, will be obliged to make advance payments to AW and the Seller in respect of the Price, the total amount of which will be EUR 6,000,000, plus VAT due and payable.

The final sale and purchase agreement is expected to be made no later than 30 August 2025 , however, the said date may be postponed (the “FSPA”). Prior to entering into the FSPA, a number of circumstances and events must occur, some of which are contingent on the satisfaction of conditions precedent, such as: receiving a letter concerning the repayment of loan from the bank that made the loan to AW, as well as obtaining a tax interpretation relating to VAT taxation and taking multiple actions related, among other things, to the preparation of the Real Property 1 and the Real Property 2 for disposal.

The Parties may withdraw from the PSPA in the cases stipulated therein, namely, where the provisions set out therein are not performed. The PSPA provides for contractual penalties of up to EUR 6,000,000, if the conditions precedent have not been satisfied, as the case may be, through the Seller’s or the Purchaser’s fault.

The PSPA contains provisions on the Seller’s and Issuer’s representations and covenants and rules for the Parties’ liability and risk security, which are standard for this type of transactions. In connection with the Transaction, to secure the Issuer’s and Seller’s liability for breach of representations and covenants, the Issuer will obtain an insurance policy covering the Issuer’s and Seller’s liability for their representations and covenants.

The Issuer will provide corporate guarantee up to EUR 12,000,000 to secure the Purchaser’s claims against AW for the return of advance payments made and the payment of contractual penalties.

The consolidated quarterly report prepared as at 30 September 2023 presented the Real Property 1 and the Real Property 2 as non-current assets classified as held for sale, with balance-sheet valuation thereof amounting in aggregate to EUR 42,400,000. Due to the fact that the final Price is conditional on variables, the Issuer will inform in a separate communication about the effect of the disposal of the Real Properties on the consolidated profit or loss made by the Issuer’s group.

This report has been published due to the fact that the event in question is of relevance to the Issuer’s business.

According to the Issuer, this Current Report constitutes inside information within the meaning of Article 7 of the MAR.

Legal basis: Article 17(1) 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”).