Investor relations

Report concerns:
Conclusion of a material agreement

Report’s text:
Acting pursuant to para. 5 subpara. 1 point 3 of the Ordinance of the Minister of Finance of October 19, 2005 regarding current and periodical information submitted by issuers of securities (Journal of Laws No. 209, item 1744) (“Ordinance”), J.W. Construction Holding S.A. with its registered office in Ząbki (“Company”) hereby announces that on June 24, 2008, it concluded with PKO Bank Polski S.A., Branch No. 15 in Warsaw (“Bank”) an agreement concerning a revolving operating loan in Polish zloty, amounting to PLN 45,000,000 (“Agreement”). The loan will be used to fund the Company’s ongoing operations consisting in the construction of the “Lewandów II” project situated at ul. Lewandów in Warsaw (“Project”).
Pursuant to the Agreement, the loan utilization and repayment term shall expire on the expiry of the lending period, i.e. on September 30, 2010. The loan interest has been set at WIBOR 1M plus the Bank’s margin. Loan collateral consists of a contractual joint mortgage amounting to PLN 45,000,000 securing the principal and a joint capped mortgage up to PLN 13,050,000 established on undeveloped land situated in Warsaw at ul. Lewandów, land and mortgage registers KW No. WA3M/00211006/2, KW No. WA3M/00446053/2, KW No. WA3M/00445516/9, KW No. WA3M/00211332/6 maintained by the District Court for Warszawa-Mokotów, 9th Land and Mortgage Register Division; a blank promissory note issued by the Company with a promissory note declaration; the power of attorney to withdraw funds held in the Company’s current account maintained with Fortis Bank Polska S.A.; a clause concerning the deduction of claims from the Company’s accounts maintained with the Bank; the assignment to the Bank of benefits under the insurance policy against fire and other casualties related to the Project (the policy must be concluded with an insurance company approved by the Bank and the insurance sum must not be less than the amount of the loan granted); the assignment to the Bank of receivables from the agreements already concluded and future agreements to be concluded by the Company with purchasers of apartments and parking spaces constructed under the Project.
The loan will be divided into tranches and will be made available up to the amount of PLN 14,000,000 after the following steps have been completed: the submission to the District Court for Warszawa-Mokotów, 9th Land and Mortgage Register Division, of applications concerning mortgage entries where the applicable fees have been paid; the establishment of the aforementioned collateral; the submission of a statement of consent to enforced collection proceedings under the Agreement and the issue of a promissory note pursuant to Article 97 of the Banking Act; the submission of up-to-date bank opinions from banks where the Company has accounts; the confirmation by a Bank employee who is a professional appraiser of the value of the property serving as mortgage collateral; the submission of a favourable opinion by a person collaborating with the Bank who has a builder’s license regarding the assumptions concerning the floor area projected, the Project completion date and the costs envisaged; the submission of a valid building permit in line with Project assumptions; the confirmation by the Company of the financial statements for the year 2007 amended by the Bank; payment into the separate receipts account, referred to in the Agreement, of the funds that have been received from purchasers before the conclusion of the loan agreement and have not been used for Project funding. The remaining loan amount will be made available after the Company has submitted copies of land and mortgage registers with valid entries concerning the aforementioned mortgages.
The conclusion of the Agreement has resulted in an obligation on the part of the Company to submit a current report pursuant to para. 5 subpara. 1 point 3 in connection with para. 2 subpara. 2 of the Ordinance due to the fact that on June 24, 2008, the Company concluded an agreement with the Bank concerning a revolving operating loan in Polish zloty, amounting to PLN 43,000,000, which will be used to fund the Company’s ongoing operations consisting in the construction of the “Lewandów I” project situated at ul. Lewandów in Warsaw.
The criteria for the Agreement to be deemed material are the provisions of para. 2 subpara. 2 in connection with para. 2 subpara. 1 point 51 of the Ordinance due to the fact that the total amount of all agreements concluded by the Company with the Bank during the last 12 months has been PLN 88,000,000, and thus has exceeded 10% of the Company’s equity.