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Disposal of office portfolio
ECHO POLSKA PROPERTIES N.V.
(Incorporated in The Netherlands)
(Company number 64965945)
JSE share code: EPP
ISIN: NL0011983374
LEI Code: 7245003P7O9N5BN8C098
(“EPP or “the company”)
DISPOSAL OF OFFICE PORTFOLIO
1. INTRODUCTION
Shareholders are advised that EPP has reached an agreement for the disposal of a portfolio of office properties Tryton
Business House in Gdansk, A4 Business Park in Katowice and West Gate in Wroclaw (the “Office Portfolio”). The
agreed estimated transaction price for the shares in the companies controlling the Office Portfolio shall amount to
EUR 160 million (the “Price”), (jointly the “Transaction”).
The company intends utilising the sale proceeds from the disposal to finance further retail acquisitions.
Further details of the Office Portfolio are set out in paragraph 4 below.
2. RATIONALE
Consecutive sale of the Office Portfolio forms significant part of the company’s strategy, as EPP is planning to
become a purely retail investment platform over the period of next 3-4 years. The Office Portfolio subject to the
Transaction consists of pre-selected assets, which represent high investment value. The Transaction generates profit
on initial investment and proceeds can be used to fund further retail acquisitions limiting the necessity to raise capital
from the market.
3. TERMS OF THE TRANSACTION
A preliminary agreement has been entered into on 3 October 2017 between EPP and Echo Polska Properties (Cyprus)
PLC (EPP’s wholly owned subsidiary), as the sellers (the “Seller”) and Griffin Premium RE..N.V., as the purchaser,
(the “Purchaser’) in terms of which, the Seller shall sell and the Purchaser shall buy the shares (the “Shares”) in the
companies (being wholly-owned by the Seller)) which control the Office Portfolio.
Subject to the satisfaction of certain conditions by 31 January 2018 (with a mechanism for prolonging the long stop
date in case the condition listed under item 3 below is not satisfied on time), the Seller and the Purchaser shall be
obliged to enter into a final share purchase agreement in respect of the Shares, and consequently the Purchaser shall
pay the Price and the Seller shall transfer the Shares.
The conditions include:
1. the acquisition of at least 50% plus one share in the share capital of the Purchaser by Globalworth Asset Managers
SRL and/or Globalworth Real Estate Investments Limited (“GREIL”) in the tender offer announced by GREIL
pursuant to an investment agreement relating to the shares in the Purchaser executed on or about the date of the
agreement for the disposal of the Office Portfolio; and
2. the receipt by the Seller of the originals, and by the Purchaser of copies, from the relevant financing banks of a
payoff letter(s) specifying the amount to be paid to the financing banks upon the completion of the Transaction
to discharge the in-place financing;
3. the approval of the acquisition of Shares by the general meeting of shareholders of the Purchaser.
On the completion of the Transaction the Seller shall execute the rental guarantee agreements (the “RGAs”) pursuant
to which the Seller shall guarantee the rent for the vacancies in some of the buildings as well as certain parameters
of the currently existing rental agreements. The term of the RGAs shall be from three to five years commencing on
the day of the completion of the Transaction.
The Seller has provided standard warranties and indemnities for a transaction of this nature. It envisaged that the
business representations and warranties (i.e. other than the representations and warranties related to the title to the
Shares and the real properties) will be insured.
4. PROPERTY SPECIFIC INFORMATION
Value
attributed to
Weighted the property
average office as at 30 June
Property Geographical GLA rental per m2 2017
Seller Subsidiary name location Sector (m2) (EUR/m2) (EUR)
Ormonde spolka z
organiczona
odpowiedzialnoscia
– Limited Partner
Tryton
Tryton
Business Gdansk, Poland Office 23,997 12.62 50,200,000
Emfold Investments House
spolka z
organiczona
odpowiedzialnoscia
– General Partner
Tryton
Wetherall
Investments spolka
z organiczona
odpowiedzialnoscia
– Limited Partner A4 Business
Park Katowice, Poland Office 30,556 13.17 65,200,000
Iris Capital spolka z
organiczona
odpowiedzialnoscia
– General Partner
Wagstaff West Gate Wroclaw, Poland Office 16,646 13.25 39,400,000
Investments spolka
z organiczona
odpowiedzialnoscia
Westgate spolka z
organiczona
odpowiedzialnoscia
Total 71,198 13.02 154,800,000
The net operating income for the 12 months ended 30 June 2017 attributable to the Office Portfolio amounted to
EUR 9,791,000. This historic information is not representative of the income generating capabilities of the assets due
to some of them not being held for a full 12 month period. Annualized fully-let net operating income attributable to
all assets from the Office Portfolio amounts to EUR 11,719,000.
The values attributed to each of the properties comprising the Office Portfolio as of the date hereof is considered to
be its fair market value, as determined by the directors of the company. The directors of the company are not
independent and are not registered as professional valuers or as professional associate valuers in terms of the Property
Valuers Act, No.47 of 2000.
5. CATEGORISATION OF THE TRANSACTION
In accordance with the JSE Listings Requirements, the Transaction is classified as a category 2 transaction and
accordingly does not require approval by EPP’s shareholders.
6. CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement issued on 26 September 2017 (“cautionary
announcement”), wherein shareholders were advised that EPP had entered into negotiations regarding certain
potential acquisitions which, if successfully concluded, may have a material effect on the price of the company’s
securities. The Transaction has no impact on the cautionary announcement and shareholders are accordingly advised
to continue to exercise caution when dealing in the company’s securities until a further announcement is made.
4 October 2017
JSE Sponsor
Java Capital
LuxSE Listing Agent
M Partners
For more information:
Magda Cieliczko, Marketing Director Echo Polska Properties
Mobile: +48 603 203 619
magda.cieliczko@echo-pp.com
Java Capital, JSE Sponsor
Phone: +27 11 722 3050
M Partners, LuxSE Listing Agent
Phone: +352 263 868 602
Singular System IR
Michèle Mackey / Jacques de Bie
+27 (0)10 003 0700/+27 (0)82 497 9827
michele@singular.co.za; Jdebie@singular.co.za
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