Allegro.eu S.A. — M&A Activity 2021

Oct 11, 2021

Current report No. 12/2021

11 October 2021

Title: Allegro Pay sp. z o.o. has signed Receivables Purchase Agreementwith AION Bank S.A.

Legal basis: Article 17 of MAR - inside informationThe Board ofDirectors (the "Board") of Allegro.eu (the "Company" and together withits subsidiaries, which includes among others Allegro Pay sp. z o.o.("Allegro Pay"), the "Group"), hereby announces that on 11 October 2021,Allegro Pay, a wholly owned subsidiary of the Company, signed aReceivables Purchase Agreement (the "RPA") with AION Bank SA / NV, acredit institution incorporated as a joint-stock company (sociétéanonyme / naamloze vennootschap) under the laws of Belgium, with itsregistered office in Brussels, Belgium, acting through its Polish branchtrading under the name "Aion Bank S.A. Spółka Akcyjna Oddział w Polsce"with its registered office in Warsaw ("AION"), concerning the purchaseby AION of consumer loan receivables originated by Allegro Pay (the"Transaction").

The entry into force of the RPA is subject to applicable policies andprocedures, including credit and servicing policies and SLA for ITsystems, being agreed by both Allegro Pay and AION (together the"Parties"), and provided no objection will be made by the Belgianbanking authority exercising its supervision over AION before the firstscheduled date of sale. As such, it will become binding once the abovementioned conditions are met. The RPA is concluded for a fixed termending on 30 November 2023, which may be subject to extension or earlytermination based on termination events agreed in the RPA.

The RPA creates a framework for a series of possible disposals ofreceivables based on an offer and acceptance mechanism. The first offerday is scheduled for November 2021, and subsequent offers may be madeeach subsequent month until the termination date.

Receivables to be offered to AION in the course of the Transaction mustbe compliant with eligibility criteria defined in the RPA, which includeamong others a permissible range of the original number of installmentsof receivables to be disposed of (from three to thirty). Receivablesunder "buy now pay later" 30-day loans will not be subject to sale.

The Transaction will include receivables originated under consumer loanagreements entered into before signing the RPA as well as under newagreements to be entered into later on. The receivables will be sold ona non-recourse basis (subject to liability for breach of warranties(rękojmia) or breach of contract) and are expected to be derecognizedfrom Allegro's balance sheet upon their respective disposal dates.

The Parties agreed in the contract that Allegro Pay does not have tosell its receivables, but if it decides to do so, the receivables mustbe offered to AION (to the extent that they are compliant witheligibility criteria specified in the RPA) on the basis of exclusivity.However, the exclusivity doesn't prevent Allegro Pay from entering intopotential securitization transactions (private or public) that may becarried out in the future.

Allegro Pay will service any receivables sold to AION, in exchange for aservicing fee payable upfront at the time of each tranche of receivablesis purchased. The fee will be set based on a rate agreed in the RPA,intended to cover actual costs of servicing and a reasonable margin.

Receivables will be sold for a price equal to the outstanding principalplus interest (accrued until the sale and forecasted until loanmaturity) less a discount. The discount will be set based on a rate p.a.being the sum of a fixed base rate, an add-on rate (to be agreed by theParties separately for each tranche, intended to reflect expected creditrisk), the cost of capital (based on WIBOR 6M), and the servicing feerate.

The Parties agreed a limit of PLN 500 million, to be renewed every dayon a rolling basis, subject to AION's right to terminate with a 6-monthnotice period (at the time a termination notice is served, the limitwill cease to be renewable and will remain available only until the endof the notice period). Within the limit, Allegro Pay will be able tosell receivables based on pre-agreed price parameters. The actual volumeof sold portfolios may be higher than the limit. The Parties anticipatethat if the cooperation is successful, the total balance of outstandingreceivables purchased by AION may reach PLN 2 bn within the fixed termof the agreement. Furthermore, the Parties expect that the firstdisposals will cover the portfolio of existing receivables for anapproximate amount of PLN 100-200 million to be completed by 2021year-end. The Group expects that the sale of receivables under interestbearing installment loans to AION should generally result in a positivenet margin being retained in Group EBITDA (operating profit beforeinterest, tax, depreciation and amortization expenses), while therelated receivables will be de-recognized from the Group's balancesheet. The Transaction does not affect the shopping experience ofAllegro users as the loans will still be granted, serviced and repaidvia the Allegro platform.