EMPIK MEDIA & FASHION SA
Dear Sirs,
Warsaw, 4 November 2014.
The Management Board of Empik Media & Fashion S.A. (EM&F), in cooperation with its main shareholders, Penta Investments and Eastbridge, would like to address issues included in the press publication that appeared in today's "Puls Biznesu" newspaper - "Empik's owner becoming increasingly backed against the wall" ("Właściciel Empiku coraz bliżej ściany") by Miss Magdalena Wierzchowska and untrue comments of third parties as well as market speculations included in this article:
1/ Market rumours that allegedly the loans have been called in and that the securities guaranteed to the bondholders have been broken are completely baseless and not true. The Company has notbreached any covenants of the financing agreements (including bank covenants). The entire financingprovided to the Company by banks and bondholders is fully available to the Company.
Current actions undertaken by the Company's Management Board, aimed at obtaining a refinancing, are a standard procedure resulting from the approaching debt maturity dates. The Company is in talks with a number of financial institutions and business partners. We would like to stress that these talks are all held in good faith and with a positive approach from all parties included. We have no information at this stage which would lead us to believe that we may not be able to agree new financing soon.
2/ On the contrary to the information presented in the newspaper article - The Company haspurposely decided to postpone the sale of language schools after the end of the summer holidays,which is very common for such business decisions/processes. The process has commenced last month and is being executed in accordance with the time-table approved by the Company. We would like to point out that there is a large interest in the language school segment, Learning System Group, which is a unique asset with a significant market share. With regard to further development of our language schools in Russia and Ukraine, we would like to confirm that it is being achieved in line with our adopted plan and the economic sanctions that are currently affecting Russia and Ukraine have not had an impact on the schools growth rate. The language schools clients in these two markets value our offer.
3/ To our knowledge, there is no conflict between the Company's main shareholders - Eastbridge and Penta Investments - neither with regard to the financing, nor with regard to further development strategy of the Company.
The full and joint commitment of Penta Investments and Eastbridge has been confirmed by the PLN
80 million loan extended to the Company in September 2014 (Current Report No. 33/2014 dated 11
September 2014). The shareholders decided to provide the loan on a 50%/50% basis. The
cooperation between the main shareholders is harmonious. In addition, both shareholders expressed their willingness to increase financing for the Company under the loan agreement which is being currently finalised.
In accordance with the "Puls Biznesu" publication, the above loan was extended by Penta
Investments only.
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4/ To our knowledge, the third parties opinions cited by "Puls Biznesu" concerning the alleged withdrawal of Eastbridge from the investment in Poland are completely unfounded. We would like to point out that Ms Davina Bruckner - the daughter of the Eastbridge founder, Mr Yaron Bruckner, as the Chairman of the Supervisory Board of Eastbridge, is fully engaged in further development of Empik Media & Fashion Group. She has moved to Poland to be able to cooperate more closely with the Company's Management Board.
5/ We also would like to contradict the speculations included in the "Puls Biznesu" article concerning the alleged exit of Empik Media & Fashion from certain investments (among others Smyk, empik.com or Empik) in the near future. They are completely baseless.
With kind regards,
Management Board of Empik Media & Fashion S.A. Krzysztof Rabiański - Chairman of the Management Board
Jacek Bagiński - Member of the Management Board, CFO
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