RB nr 9/2005

Legal basis: Art. 81 subpar. 1 pt. 2 PPO

The Management Board of MCI Management S.A. informs of the current status of the process of purchase of Wirtualna Polska S.A. assets by the dependent company PWM S.A.

On May 26, 2004 on the initiative of Sokrates Inwestycje Sp. z o.o. (SI) and MCI Management S.A. (MCI) ‘Portal Wykup Menedżerski’ (PWM) – a joint stock company was set up. The objective of the company is to take over the assets of Wirtualna Polska (WP) and ensure the continued operations and further development of the portal. PWM submitted to Wirtualna Polska S.A. an offer to take over Wirtualna Polska for 36 mln PLN (details of the offer were published in the current report no. 40/2004 from May 27, 2004).

At present the bankruptcy process of Wirtualna Polska S.A. is going on with a possibility of composition. According to the information received by MCI, Wirtualna Polska S.A. received two offers of purchase of the assets of wp.pl portal – an offer of PWM for 36 mln PLN and an offer of people personally connected with the minority shareholders of the portal for 6 mln PLN. According to the information possessed by MCI the court at the moment is considering the appeals of the creditors to the list of receivables received by Wirtualna Polska S.A..

If the meeting of the creditors of the Company is convened by the court commissioner and the people personally connected with the minority shareholders have a majority at the meeting which will enable them to adopt a composition (at present the submitted list of undisputed receivables of Wirtualnej Polski S.A. reaches in total the amount of 6 mln PLN and they are controlled by the people personally connected with the minority shareholders), then, in the opinion of the Management of MCI Management S.A., it is fairly unlikely that the meeting of the creditors of the Company will accept the offer of PWM as one may rather expect that the offer of the takeover of the assets of wp.pl portal for the amount of 6 mln PLN, that is the takeover by the creditors personally connected with the minority shareholders will be voted for.

Taking into account the fact that both offers are for the values much lower than the estimated market valuation of the portal, one can expect a possible submission of claims by the other creditors (disputed receivables) or the shareholders of WP, possible losses which might arise from them, being the difference between the market value of the assets of wp.pl portal possible to get through the sale according to the market rules and the amount which will be reached. In the opinion of MCI such an assumption is justified and if so, it cannot be disregarded that the court, after consideration of the current actual situation, will transform the current bankruptcy with a possibility of composition into bankruptcy with liquidation of the assets of WP.

If a possibility of bankruptcy with liquidation process is chosen, it will mean the sale of the assets of Wirtualna Polska at the highest possible price through market auction. In such a case PWM is interested in the purchase of the wp.pl portal as a member of the consortium established jointly with MCI and other strategic/financial investors. In the opinion of MCI the estimated transaction value of the purchase of Wirtualna Polska in market auction in the process of bankruptcy with liquidation can reach about 100 – 150 mln PLN. The increase of the valuation is justified by the improved results of the wp.pl portal, increase of the valuations of the horizontal portals and a marked improvement of the results in the Internet branch in Poland in 2004 as well as forecasts as to its dynamic growth in the coming years.