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Events with potential impact on GTC`s consolidated financial statements for the six-month period ended 30 June 2020
GLOBE TRADE CENTRE S.A.
(Incorporated and registered in Poland with KRS No. 61500)
(Share code on the WSE: GTC.S.A)
(Share code on the JSE: GTC ISIN: PLGTC0000037)
(“GTC” or “the Company”)
Current report number: 17/2020
Date: 16 July 2020
Subject: Events with a potential impact on GTC`s consolidated financial statements for the six-
month period ended 30 June 2020
The management board of Globe Trade Centre S.A. (“GTC”, the “Company”) informs that based on
preliminary discussions with the valuation expert commissioned to value the real estate portfolio of the
GTC group, it expects that the financial results of GTC will be adversely affected and GTC will report a
consolidated net loss for the six months ended 30 June 2020 due to (i) the expected drop in valuation
of the properties; and (ii) the establishment of a support scheme and multi-pronged measures to support
tenants.
The valuation of the investment property portfolio
Since the outbreak of the coronavirus disease (COVID-19), local governments in each country where
GTC operates have implemented a variety of contingency measures. Consumer behaviour and retail
sales have been adversely impacted and may remain challenging in the near term until the spread of
COVID-19 is effectively contained.
Due to the uncertainty regarding future operating performance as a consequence of COVID-19 and the
dampened economic and operating environment in Central and Eastern Europe (CEE), it is expected
that the appraised value of our investment properties as at 30 June 2020 will decrease when compared
to that as at 31 March 2020. Based on the preliminary assessment by the valuation expert commissioned
to value GTC group’s real property portfolio, the decrease in the value of our investment properties is
expected to amount to EUR 62 million as at 30 June 2020, a decline of 2.7% when compared to the
appraised value of EUR 2,255 million as at 31 March 2020. The decline is primarily attributed to the
retail activity of the Company, and in particular to Galeria Polnocna (situated in Warsaw, Poland) and
Ada Mall (situated in Belgrade, Serbia). As a result of the decline in book value, the loans related to the
above-mentioned retail properties are expected to no longer comply with certain financial covenants
included in the respective loan agreements as of 30 June 2020:
- With respect to a EUR 188.7 million loan from Bank Pekao SA granted to a subsidiary of GTC
operating the Galeria Pólnocna project, the LtV (loan-to-value) and DSCR (debt service
coverage ratio) covenants were not met as of 30 June 2020. Accordingly, the loan will need to
be reclassified as a current liability due to the non-compliance with the respective loan
covenants. In parallel, the Company has initiated negotiations with the financing bank in order
to obtain a waiver in respect to such covenants or to reach a common understanding to relax
the present financial covenants.
- With respect to a EUR 60.8 million loan from Banka Intesa ad Beograd, Vseobecna Uverova
Banka a.s. and Privredna Banka Zagreb d.d. granted to a subsidiary of GTC operating the Ada
Mall project, the DSCR covenant which would not have been met was waived by the banks as
of 30 June 2020 until the end of June 2021.
- With respect to a EUR 128.8 million loan from Erste Group Bank AG and Raiffeisenlandesbank
Niederosterreich-Wien AG granted to a subsidiary (Galeria Jurajska), the DSCR covenant was
waived as of 30 June 2020 until the end of June 2021.
The Company maintains a strong cash position which enables to be compliant with the debt-service
payments obligations.
Establishment of a support scheme and multi-pronged measures to support tenants
GTC group has implemented multi-pronged measures to support tenants and encourage consumer
spending, such as reducing rent, allowing rent payment in instalments, waiving late payment interest
and service charges. Depending on the extent and length of the COVID-19 pandemic, the GTC group
may have to extend further assistance to its tenants across the portfolio.
GTC will continue to monitor and protect its financial and liquidity positions, both of which remain healthy
as of the date of this report, and undertake mitigating steps to reduce the impact of the adverse market
situation.
The information contained in this current report is based only upon the preliminary assessment made
by the management board of GTC with reference to the information currently available, which has
neither been reviewed nor audited by GTC’s auditors. GTC’s consolidated results for the six months
ended 30 June 2020 are expected to be published on 20 August 2020.
Legal basis: Art. 17(1) of Regulation (EU) No 596/2014 of the European Parliament and of the Council
of 16 April 2014 on market abuse (market abuse regulation) and 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 – inside information
Signed by:
/s/ Robert Snow /s/ Yovav Carmi
Member of the Management Board Member of the Management Board
Warsaw, Poland
Sponsor: Investec Bank Limited
Date: 16-07-2020 07:05:00
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