RB nr 32/2010

Legal basis: Art. 56 subpar. 1 pt. 2 of the Act on Public Offering – current and periodic information

The Management Board of MCI Management S.A. (hereinafter “Company”, “MCI”) informs that on October 31, 2010 MCI signed with Immoventures Sp. z o.o. (main shareholder of the Company) an agreement obliging Immoventures Sp. z o.o. to sell to MCI 100% of the shares and bonds in IMMOPARTNERS SpĂłłka z ograniczoną odpowiedzialnością w organizacji SpĂłłka komandytowo-akcyjna based in Wrocław (hereinafter “IP SKA”) and 100% of the shares in its general partner – IMMOPARTNERS Sp. z o.o. based in Wrocław (hereinafter “IP”). As provided in the agreement MCI shall purchase from Immoventures Sp. z o.o.: (i) 42,150 bonds in IP SKA for the total price of PLN 42,150,000.00 ; (ii) shares in IP SKA the total price of PLN 50,000.00, (iii) shares in IP the total price of PLN 5,000.00 . All transactions shall be made by December 31, 2010.
IP SKA shall issue bonds of the total value of PLN 42.150.000,00 to finance the purchase price of real estate assets of the total value of PLN 42,150,000.00 from Immoventures Sp. z o.o. The value of real estate assets to be traded between Immoventures Sp. z o.o. and IP SKA was established on the basis of valuation by an independent appraiser and additionally verified and confirmed by a reputed independent auditor.
According to the concluded agreement MCI shall be obliged toward Immoventures Sp. z o.o. to pay the purchase price of the bonds and shares described above within 7 working days from the date of conclusion of the agreements transferring the ownership of these assets to MCI. Additionally, as provided in the agreement MCI shall at the request of Immoventures Sp. z o.o. pay for the assets referred to above in the form of an offer of subscription of the newly issued MCI shares by Immoventures Sp. z o.o. at the price of 7.53 PLN/share, which price of MCI shares was established on the basis of the average closing price of the shares of MCI Management S.A. on the regulated market of the Warsaw Stock Exchange from the period of one month immediately preceding the date of conclusion of the agreement described in this current report.
In that obliging agreement Immoventures Sp. z o.o. took on an obligation towards MCI that after the assets in question have been purchased by MCI it shall not purchase any real estate (including land, buildings, apartments, etc.) in Poland or abroad without the consent of MCI, and in the case of failure to meet that obligation it shall be charged with a contractual penalty.
Furthermore, Immoventures Sp. z o.o. guaranteed to MCI that in the case when, over the period of twenty four months from the date of purchase of the real estate assets by MCI Management S.A. (ultimately brought to the newly created “MCI.ImmoVentures Closed-End Investment Fund”), the fund incurs a loss from the sale of the real estate assets purchased from Immoventures Sp. z o.o., then Immoventures Sp. z o.o. shall: (i) cover all and any losses of MCI.ImmoVentures FIZ (ii) or buy back from MCI.ImmoVentures FIZ (or from an entity indicated by the fund) specific real estate at the price equal to the full cost of purchase of the real estate from Immoventures Sp. z o.o.
Furthermore, Immoventures Sp. z o.o. took on an obligation towards MCI that over the period of twelve months from the purchase of assets in question by MCI it shall change the name of the company and cease to use the name “Immoventures” or similar names and it shall transfer free of charge all rights to the domain www.immoventures.pl to MCI or MCI.ImmoVentures FIZ or to the entity indicated by them, and that with the approval of MCI it shall cause the transfer of the whole team managing the real estate in Immoventures Sp. z o.o. to the entity indicated by MCI or by MCI.ImmoVentures FIZ.
The agreement does not include any provisions regarding contractual penalties for MCI.

The Supervisory Board of MCI granted the consent to the purchase of assets from Immoventures Sp. z o.o. and the consent to issue new MCI shares within the authorized capital as well as to organize and create the new real estate fund in the resolutions adopted on August 27, 2010 and October 22, 2010.

The conclusion of the obliging agreement and the intention provided for therein to purchase the real estate assets by MCI from Immoventures Sp. z o.o. is a step in preparation of the execution of a new MCI project, consisting in creating a new fund under the name of “MCI.ImmoVentures”. The real estate held by IP SKA shall be the first real estate brought to the new fund.
MCI.ImmoVentures shall operate as a closed-end investment fund (FIZ) within MCI Capital TFI S.A. The launch of MCI.ImmoVentures FIZ and the contribution of real estate assets to it by MCI Management S.A. is scheduled by the end of 2010. Initially MCI Management S.A. shall be a 100% investor in the fund. Roman Cisek, who has been CFO/Member of the Management Board of MCI Management S.A. and MCI Capital TFI S.A., will be the Managing Partner of the fund. The investments of the fund shall be supervised by an Investment Committee to be appointed with 5 members recruited from among experienced professionals from the real estate and financial market.
At present there are no decisive leaders on the Polish real estate management market. By creating a real estate fund MCI Management S.A. wants to make the best of the situation favorable for investments in the market to create the leading entity managing the investments in the real estate market in Poland. The managers of the fund expect the professionalization of the Polish market of real estate to take place in the future where asset management shall be separate from development operations.
The investment strategy of MCI.ImmoVentures FIZ assumes investments in projects in four areas:
– special situations – acquisition of non-performing assets (NPA) from banks, operative companies and in an asset liquidation process (companies, lands, projects in developments, buildings),
– residential portfolio deals with developers – volume transactions on discounted conditions in development stage or ready to sale,
– investments in the holiday resorts and hotel sector – acquisition of land and real estate projects to develop or re-develop holiday resorts and hotels with potential partners,
– real estate mezzanine projects.

The following connections exist between the Company, its executives or supervising management, and the seller of bonds and shares and between the issuer of bonds:
1) Immoventures Sp. z o.o. is the main shareholder in MCI Management S.A.,
2) 100% of the shares in IP SKA belong to Immoventures Sp. z o.o.
3) IP is a general partner of IP SKA in which 100% of the shares belong Immoventures Sp. z o.o.
4) Members of the Management Board of MCI Management S.A. in the persons of President of the Management Board Tomasz Czechowicz and member of the Management Board Roman Cisek are at the same time members of the Management Board of Immoventures Sp. z o.o.
5) Member of the Management Board of MCI Management S.A. in the person of Vice-President of the Management Board Konrad Sitnik is at the same time member of the Supervisory Board of Immoventures Sp. z o.o.
6) Member of the Management Board of MCI Management S.A. Roman Cisek is at the same time member of the Management Board of IP SKA and of IP.

The obliging agreement which is described above concluded with Immoventures Sp. z o.o. is considered significant agreement as its objects are assets of the value in excess of 10% of the equity of MCI Management S.A.

Legal basis: § 5 subpar. 1 pt. 3 of the Directive of the Minister of Finance on current and periodic information.