Preliminary Sales Agreements Concluded for Retro Office House Office Building Situated in Wrocław and Silesia Star Office Buildings Situated in Katowice

The Management Board of LC Corp S.A. (“the Company”) informs that on 11 April 2019 entities controlled by LC Corp Invest XVII spółka z ograniczoną odpowiedzialnością Projekt 20 Sp. k. (“P20”) and LC Corp Invest XVII spółka z ograniczoną odpowiedzialnością Projekt 21 Sp. k. (“P21”) acting as sellers (collectively called “the Sellers”), and Ingadi spółka z ograniczoną odpowiedzialnością (“Ingadi”) and Artigo spółka z ograniczoną odpowiedzialnością (“Artigo”) respectively, acting as purchasers (collectively called “the Purchasers”, with the Sellers and the Purchasers being hereinafter jointly referred to as “the Parties”), entered into preliminary sales agreements (“the Preliminary Sales Agreements”) as part of a single portfolio transaction between the groups of companies (“the Transaction”), under which the following were disposed of:

1. rights of perpetual usufruct to parcels of land located in Katowice, at Roździeński Avenue and Uniwersytecka Street including the rights of ownership to two office buildings erected on the said land together with building structures known as the “Silesia Star” buildings, and tangible and intangible assets associated with the real property in question, owned by P20 and covered under the Transaction by the Preliminary Sales Agreement to Artigo (“the Transaction 1”), and
2. rights of ownership to parcels of land located in Wrocław, at Piłsudski and Komandorska Streets including the office building situated on the said land together with building structures known as the “Retro Office House” building, and tangible and intangible assets associated with the real property in question, owned by P21 and covered under the Transaction by the Preliminary Sales Agreement to Ingadi (“the Transaction 2”).

Entering into final agreements (“the Final Agreements”) for the Transactions is conditional upon the satisfaction, among other things, of the following conditions precedent:

1. tax interpretations concerning the Transaction and supporting a position adopted by the Parties have been issued, and
2. the Parties have obtained all necessary approvals for the Transaction, and
3. lending banks have issued letters relating to the repayment of loans taken out by P20 and P21 for the construction of the buildings, and
4. the Company has granted surety to the Purchasers

The Final Agreements for the Transactions are expected to be concluded not later than on 15 August 2019.

Pursuant to the Preliminary Sales Agreements, should a significant adverse change (contemplated in the Preliminary Sales Agreement) occur, the Purchasers (acting jointly) or the Sellers (acting jointly) will be entitled to withdraw from the Preliminary Sales Agreements entirely.

The total Transaction price agreed by the Parties amounts to EUR 113,175,000 (plus a relevant amount of VAT and transaction costs), with the Transaction 1 price being set at EUR 54,375,000 (plus a relevant amount of VAT and transaction costs) and the Transaction 2 price at EUR 58,800,000 (plus a relevant amount of VAT and transaction costs).

The Sellers, under the Preliminary Sales Agreements, have indemnified and held the Purchasers harmless against liability and made and given representations and warranties to the Purchasers in that respect under rules which are commonly applied to this type of transactions.

Further, according to arrangements made between the Parties, the Sellers committed themselves to furnish the Purchasers with rent guarantees issued for a five-year period (covering, inter alia, not leased floor areas), secured by surety granted by the Company (as the surety of P20 and P21 acting as the Sellers and debtors). In relation to the aforesaid surety, the Company will guarantee that:

1. obligations and liabilities of P20 and P21 arising from the Final Agreements will be discharged by P20 and P21, and
2. obligations and liabilities of P20 and P21 relating to finish works to be done by tenants designated in the Final Agreements will be discharged by P20 and P21, and
3. obligations and liabilities of P20 and P21 arising from the rent guarantee agreements contemplated in the Preliminary Sales Agreements will be discharged by P20 and P21, and
4. the Company will incur debts of P20 and P21 arising from obligations and liabilities of P20 and P21 under the Final Agreements and rent guarantee agreements if the Sellers have ceased their operations, have gone into liquidation or have been dissolved, which circumstances will be described in the surety arrangement.

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

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 relation to 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.