Preliminary Sales and Purchase Agreement Concluded for “Wola Center” Office Building Situated in Warsaw

Report number 37/2019

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

The Management Board of Develia S.A. (“the Company”) inform that on 24 September 2019, a subsidiary wholly owned by the Company: Warszawa Przyokopowa Spółka z ograniczoną odpowiedzialnością (“WP”), acting as the seller (hereinafter referred to as “the Seller”) and a company controlled by Hines European Value Fund SCSp, based in Luxembourg, i.e. Gisla Spółka z ograniczoną odpowiedzialnością, acting as the purchaser (hereinafter referred to as “the Purchaser”, with the Seller and the Purchaser being hereinafter jointly referred to as “the Parties”), entered into a preliminary sales and purchase agreement (“the PSPA”) under a transaction concluded between companies (“the Transaction”) and concerning the sale of the perpetual usufruct right to parcels of land located at 33 Przyokopowa Street in Warsaw, including the right of ownership to an office building erected on the said land, known as the “Wola Center” building, along with tangible and intangible assets related to the said real property, which are owned by WP and covered by the PSPA.

Entering into a final sales and purchase agreement (“the FSPA”) is conditional upon the satisfaction of, among other things, the following conditions precedent:
(i) Concurrent tax interpretations supporting a position adopted by the Parties have been issued, and
(ii) the Parties have obtained all necessary approvals for the Transaction, and
(iii) The lending bank has issued a letter relating to the repayment of loans taken out by WP for the construction of the building in question, and
(iv) The Purchaser has been given a loan decision for the partial financing of the Transaction, and
(v) The Seller’s title to the real property designated for disposal has not been changed adversely, and
(vi) the Company has granted surety to the Purchaser.

It is expected that the FSPA will be executed until 31 December 2019 at the very latest, provided, however, that the condition precedent concerning the concurrent tax interpretations has been satisfied before the said date; otherwise both the Seller and the Purchaser will have the right to postpone the FSPA execution date for one month, i.e. to 31 January 2020, by giving the other Party a written notice.

Pursuant to the PSPA, should a significant adverse change (contemplated in the PSPA) occur or where the conditions precedent have not been satisfied due to reasons attributable to the other Party, the Purchaser or the Seller (as the case may be) will be entitled to withdraw from the Preliminary Sales and Purchase Agreement entirely and a contractual penalty may be charged, if applicable.

The total price of the transaction was agreed by the Parties at EUR 101,900,000 (plus an applicable amount of VAT and transaction costs).

The Seller, under the Preliminary Sales and Purchase Agreement, has indemnified and held the Purchaser 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.

Furthermore, following the arrangements between the Parties, the Company represented to the Purchaser that it stood surety for the Seller and debtor, giving a guarantee that:
(i) The Seller would perform the obligations and discharge the liabilities of Warszawa Przyokopowa, acting as the Seller, arising from agreements covering the subject-matter of the Transaction, and
(ii) The Company would incur debts of WP arising from obligations and liabilities of WP under the FSPA, if the Seller has ceased its operations, has gone into liquidation or has been dissolved, which circumstances were described in the surety arrangements,
(iii) The contractual penalty would be paid, should the Purchaser withdraw from the agreement due to reasons attributable to the Seller.

Gisla Spółka z ograniczoną odpowiedzialnością is a part of the Hines European Value Fund (HEVF) SCSp. HEVF is a Core-Plus and Value-Add closed-end property investment fund, which was established in 2017 and is managed by Hines. Its main investment purpose includes office and retail properties and mixed-use projects on the major European markets.

The responsibility for the management of Hines European Value Fund’s investment properties in Poland rests with Hines.

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.