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29.12.2017
Current report no. 66/2017
Current report no. 66/2017

Conclusion of a final agreement on the sale of real property – O3 Business Campus II in Krakow

With reference to the information disclosed in current report No. 31/2016, the Management Board of Echo Investment S.A. (the “Issuer”) reports that, on 28 December 2017, the Issuer"s subsidiary, Echo-Opolska Business Park sp. z o.o. sp. k. acting as the seller, concluded a final agreement on purchase of real property situated in Krakow at ul. Opolska and Al. 29 Listopada (the “Real Property”) with a subsidiary of Echo Polska Properties N.V. (“EPP”), Ventry Investments sp. z o.o. sp. k., acting as the buyer (the “Agreement”). The Agreement was concluded in performance of the preliminary conditional agreement concerning the sale of the property described in current report No. 31/2016 following the satisfaction of the relevant conditions precedent. The terms and conditions of the Agreement are similar to the terms and conditions generally applied in such types of transactions. The Agreement contains representations and warranties of the seller and the buyer and relating to the liability of the parties which are standard for such types of transactions. Under the Agreement, the seller granted the buyer a quality guarantee with respect to the building and the building developments on the Real Property for the periods as stated in the Agreement and compliant with market standards. Under the transaction, the seller and the buyer concluded a rental guarantee agreement (“RGA”). The principal terms of the RGA provide for a guarantee extended to the buyer of the seller"s coverage of rent payments and average service fees for specific sections of the building which are not leased out to third parties on the date of signing of the Agreement and for those sections which have been leased, but with respect to which rent discounts or rent-free periods were applied. Moreover, in connection with the Agreement, the parties thereto concluded: (i) an escrow account agreement; (ii) a fit-out agreement; and (iii) an understanding regarding the repayment of the profit participation loan extended by EPP (Cyprus) 2 Limited, a subsidiary of EPP. The purchase price based on the calculation described in current report No. 31/2016 was finally determined as EUR 43.5 mln plus VAT. Taking into account all additional payments that the seller may obtain pursuant to the fit-out agreement, the total value of revenues related to the sale of the Real Property may increase by the estimated sum of EUR 7.3 mln plus VAT. Simultaneously, under the RGA, the seller is required to pay to the buyer an one-off payment in the amount of EUR 1.6 mln. Legal grounds: Article 17(1) of the MAR – inside information. 

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