Current report no 51 / 2016

Agreement between Budimex SA and LC Corp Invest XVII Sp. z o.o. Projekt 22 sp. k. (“Investor”) and LC Corp S.A.

The Management Board of Budimex SA reports that on 14.07.2016 an agreement was signed with LC Corp Invest XVII Sp. z o.o. Projekt 22 sp. k. („Investor”) and LC Corp S.A. which obligates Budimex to make a bid within 30 days from receiving a request for quotation concerning the implementation of the commercial and service building at 16-20 Skierniewicka St. in Warsaw named: „Wola Retro” („Investment”) and the Investor together with LC Corp S.A. agree to commission Budimex S.A. to implement the aforementioned Investment as a general contractor, on condition that Budimex makes a bid containing unit prices identical to the prices for „Retro Office House” investment implemented in Wrocław (current report no 50/2016) increased by 5% of the net value. The next condition shall be to negotiate a general contractor agreement which – from the perspective of adequate business arrangements – would not diverge from the contract for “Retro Office House” investment in Wrocław. If no proper reference has been made, the prices following from the lowest market prices agreed by the Parties on the basis of subcontractors’ and service provider’s bids increased by a markup of 8% shall be applied.
Unit prices may be modified after negotiations and mutual arrangements.
The expected estimated value of the Investment is over PLN 100 million net.
The final amount will be known after the design process and the negotiations have finished.     
The limit of abandoned works under the 16-20 Skierniewicka St. investment shall be 25% counted against the amount of Budimex’s net remuneration (the sum of fixed and variable amount).
 The subject of the agreement is also a confirmation of fulfillment of the condition, i.e. Budimex’s approval of the arrangement plan for the lease area in respect to which on 29 April 2016 Budimex concluded an office area lease agreement with the investor with the participation of LC Corp S.A. as part of the implemented Investment. Without such approval Budimex could have withdrawn from the lease agreement. The subject matter of the lease agreement is the Investor’s transfer to Budimex S.A. of the area of approx. 7,000.00 m2 increased by the add-on factor i.e. with the total area of approx. 7,343 m2, which constitutes 30% of the expected total area of the building implemented under the planned Investment for the period of 7 years from the date of transfer of the subject of lease. The lease rent and other contractual fees have been set on market conditions.

The estimated value of the investment shall exceed the threshold of PLN 77,010,000.