Report 18/2022


Conclusion of a transaction regarding purchase of shares in Selsey sp. z o.o. and disposal of shares in Homebook sp. z o.o.

Current Report No. 18/2022 dated October 17, 2022

Conclusion of a transaction regarding purchase of shares in Selsey sp. z o.o. and disposal of shares in Homebook sp. z o.o.

Legal basis: Article 17 sec. 1 of MAR.

Content of the report:

The Management Board of Wirtualna Polska Holding S.A. ("Issuer" or "WPH") informs that it has received the notification on the signing on 17 October 2022 of a preliminary conditional share purchase agreement by Wirtualna Polska Media S.A. with its seat in Warsaw ("WPM") - a subsidiary of the Issuer – regarding shares in Selsey sp. z o.o. with its seat in Wrocław ("Selsey"), ("Shares"), ("Transaction"). The shares subject to the Transaction constitute a total of approx. 44.5% of Selsey's share capital and jointly represent approx. 44.5% of votes at the Selsey Shareholders' Meeting. The total value of the Transaction is PLN 32.9 million.

As part of the Transaction, WPM:

1)       concluded a preliminary share purchase agreement, in which it undertook to acquire 51 Selsey shares representing 12.8% of Selsey's share capital in exchange for the payment of the price of PLN 6.0 million;

2)      undertook to conclude an agreement to acquire 229 shares in the increased share capital of Selsey (pursuant to a resolution of the Selsey Shareholders' Meeting to be adopted in performance of the obligations contained in the Agreement) for a cash contribution of PLN 14.9 million and a non-cash contribution in the form of an in-kind contribution 100% of shares in the company Homebook Sp. z o.o. based in Wrocław ("Homebook") with a value of PLN 12.0 million;

3)       undertook to conclude a shareholder agreement between WPM, Mr. Mirosław Mikołajczak ("MM") and Selsey regulating the corporate governance and mutual relations, obligations and rights of Selsey shareholders

The transaction was concluded under the conditions precedent in the form of:

1)       obtaining, in connection with the facilities agreement of February 25, 2020 (of which the WPH informed in the current report 8/2020 of February 25, 2020), Release Letters from the consortium of banks financing the Issuer regarding the unconditional and irrevocable release of all securities credit agreements established by or in relation to the Homebook;

2)      obtaining the consent of the President of the Office of Competition and Consumer Protection for the concentration by creating a joint undertaking or jointly controlling Selsey by WPM and MM

After the fulfillment of the conditions precedent, the Parties undertook, within 5 working days, to perform the Closing Action, in particular to conclude a promised agreement, conclude a shareholders' agreement, adopt a resolution on increasing Selsey's share capital and submit a declaration on taking up shares in the increased Selsey's capital referred to in the first part of this report as well as to pay the price for the shares. The Company will inform about the closing activities in a separate report.

The transaction is financed in cash from WPM's own funds.

The remaining terms of the Transaction do not differ from other customary terms for this type of transaction.

Selsey is one of the largest e-commerce stores in its category in Poland. It offers furniture, interior furnishings, decorations and garden accessories. The company has been operating in Poland for almost 10 years, it also sells its products in many European countries, incl. France, Germany, Great Britain and Italy. In the financial year 2021/2022, ended in June 2022, the Company had approximately PLN 118 million in revenues and a negative EBITDA result.

As a result of the Transaction, the financial results of the Homebook will not be recognized in the Issuer's consolidated financial statements in accordance with the full consolidation method used so far. However, due to the fact that in the period of 12 months ended June 30, 2022, Homebook's revenues accounted for approx. 1.4% of the Issuer's consolidated revenues, the Transaction will not have a material impact on the financial results of WPH. After finalizing the Transaction, the stake of shares and the rights resulting from the investment agreement will enable the Issuer to have significant influence on the operations of Selsey. Accordingly, Selsey will be classified as an associate consolidated under the equity method.

Legal basis: Art. Article 17 sec. 1 of European Parliament and Council Regulation No 596/2014 of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directive 2003/124 / EC, 2003/125 / EC and 2004/72 / EC

Signatures of the representatives of the Company:

Jacek Świderski – President of the Management Board/CEO,

Elżbieta Bujniewicz – Belka – Member of the Management Board/CFO