Investor relations

Report concerns:
Letter of intent and consent concerning cooperation in scope of an investment in Russia.

Report’s text:
Acting on the basis of art. 56 section 1 point 1 of the Resolution dated on July 29th 2005 concerning public offers and terms of financial instruments implementation into organized system and publics companies (Dz. U. dated on 2005, No. 184, poz. 1539, and later modifications) J.W. Construction Holding S.A with headquarters in Ząbki (“Company”) hereby informs, that on October 29th the Company made with natural person, citizen of Russian Federation, owner of two companies disposing with real properties of total area 5,30 hec. in the territory of Soczi, who has appropriate knowledge and is experienced enough in scope of Russian real properties market (“Natural Person”), letter of intention concerning cooperation in scope of purchasing and managing real properties in the territory of Russian Federation, with special attention to shore of Black Sea and Soczi City. Cooperation is to mutually execute commercial undertakings as well as searching for, by the Natural Person, terrains adequate for housing investments and investments in commercial and office buildings. Letter of intent is of initial declaration character from both parties. Concrete investments and cooperation terms and conditions shall be agreed separately.

At the same day the Company made with the Natural Person agreement on cooperation concerning common execution of two investments in the territory of Soczi:

(i) housing complex including sports complex and complex of commercial-service objects as well (9 housing buildings – about 1.000 locals). Financial engagement of the Natural Person is assessed initially to be 6.000.000 USD / according to average exchange rate by National Bank of Poland on October 29th 2007 - 15.087.000 PLN, and the Company’s engagement to be 12.000.000 USD / according to average exchange rate by National Bank of Poland on October 29th 2007 – 30.174.000 PLN;

(ii) housing building (427 locals) and two office buildings in Soczi Center (financial engagement of the Natural Person is assessed initially to be 5.430.000 USD / according to average exchange rate by National Bank of Poland on October 29th 2007 - 13.653 PLN/, and the Company’s engagement to be 10.860.000 USD according to average exchange rate by National Bank of Poland on October 29th 2007 – 27.307.470 PLN/).

According to the letter of intent and the agreement both investments shall be executed in form of target companies, to which the Natural Person contributes terrains designated for commercial housing construction and includes 1/3 of total shares number, and the Company contributes capital, knowledge and experience, taking 2/3 of total shares number, however, both parties can act due to indicated by them entities. Parties decided personnel content of organs of the target companies, due to which both investments shall be executed. Detailed terms and conditions of cooperation as well as parties’ obligations shall be agreed separately.