Claridge Public LTD — M&A Activity 2015

Feb 12, 2015

Claridge Public Limited

Office of the Secretary

P.O. Box 50012, 3600 Limassol, Cyprus Tel.:00357 25871600, Facsimile 00357 25362001 e-mail: pmc@pkdlaw.com

ANNOUNCEMENT

SALE OF THE INVESTMENT IN LEISURE HOLDING S.A. AMATHUS BEACH HOTEL RHODES

The board of directors of Claridge Public Limited (the Company) has unanimously approved the acceptance of a written binding offer submitted by Invel Real Estate Management Limited (Invel) to all the shareholders of Leisure Holding S.A. for the acquisition of 100% of their shares. The acceptance of the said written binding offer relates to the grant of exclusivity to Invel until the 15^th April 2015. Until then Invel will carry out the necessary due diligence processes in order to verify the various economic data which were provided to them and If these will be verified then the necessary agreements for the transfer of the shares of Leisure Holding S.A. to Invel or to any of their principals or to any other person which will be indicated by Invel to the shareholders of Leisure Holding S.A. will be signed.

Leisure Holding S.A. is a company registered in Luxembourg in 1999 and owns 100% of the issue capital of the Greek company Landa AXTE, which in its term is the owner of Amathus Beach Hotel Rhodes. The shareholders of Leisure Holding S.A. are the following: Amathus Public Limited 31,2%, Claridge Public Limited 30,9%, Lanitis E.C. Holdings Limited (including Lanitis family members) 26,6%, Osiris Limited 6,1% and Strawdale Limited 5,2%. The proposal of Invel is to acquire the 100% of the issued share capital of Leisure Holding S.A. for the sum of €30.000.000 in cash less any liabilities of Landa AXTE to the Bank (which is €24,4 million approximately) plus or minus its working capital (which on 31/10/2014 amounted to €51.000). If the 31/10/2014 values will not differentiate on the date of completion of the transaction, the shareholders of Leisure Holding S.A. will receive an amount of approximately €5.600.000, which correspond to the shareholders as follows: Amathus Public Limited €1.747.200, Claridge Public Limited €1.730.400, Lanitis E.C. Holdings Limited €1.489.600, Osiris Limited €341.600 and Strawdale Limited €291.200. If the values on 31/10/2014 differentiate, there will be a similar adjustment in the final amount payable to the shareholders of Leisure Holding S.A. The consideration for the said transaction will be paid in a lump sum to the shareholders from Invel, simultaneously with the transfer of their shares in Leisure Holding S.A.

The total investment of the shareholders of Leisure Holding S.A. amounts to $£23.940.860$ . The total loss from the sale of their shares is estimated to be approximately $\epsilon$ 18,9 million. Out of this amount $\epsilon$ 9,4 million approximately was recognized as an impairment of their investment in the financial results up to 31/12/2013, leaving thus an amount of $\epsilon$ 9,5 million to be recognized as a loss to the shareholders upon completion of the sale of their shares in Leisure Holding S.A. The proportion of the shareholders in the loss mentioned above is as

Claridge Public Limited

Office of the Secretary

follows: Amathus Public Limited €2.965.000, Claridge Public Limited €2.935.000, Lanitis E.C. Holdings Limited €2.527.000, Osiris Limited €579.000 and Strawdale Limited €494.000 approximately. Because of the participation of Amathus Public Limited in Claridge Public Limited with a percentage of 40,53%, beyond the direct loss of €2.965.000 to Amathus Public Limited an indirect loss of €1.190.000 will be recognized too.

The closing of the sale depends upon the verification of a series of financial data and representations given by Landa AXTE to Invel as regards to the operation and the performance of the hotel in Rhodes. The due diligence process will start immediately and is expected to be completed by the end of March 2015 early April 2015. As long as the financial data will be verified and there will be no significant deviation, the sale of the shares is expected to be completed immediately and/or the latest by the end of April 2015, provided that the consent of the lending bank for the change of ownership in the shares of the Leisure Holding S.A. and for the completion of the debt restructuring of Landa AXTE will be secured.

The board of directors of Claridge Public Limited taking the decision for accepting the proposal of Invel, although this creates a loss for the Company, have taken under consideration the following:

• 1. The financial results of Landa AXTE during the recent years which were loss making except in 2014 which showed a profit of approximately €600.000, mainly due to the rapid increase of the Russian market, which today shows a downturn, and may bring back Landa AXTE to losses.
• 1. The amount of Landa AXTE loans, which became excessively disproportionate to the profits from its operations.
• 1. The obligation of continuous increases in the capital of Leisure Holding S.A. because of the accumulated losses in the parent company by the results of Landa AXTE mainly and the need to provide adequate working capital both in Leisure Holding S.A. and Landa AXTE, which was provided by the shareholders. All the previous have negatively affected the liquidity of the shareholders of Leisure Holding S.A. It is noted that during the years 2009, 2010 and 2015 Leisure Holding S.A. proceeded to mandatory capital increases of €7,7 million to cover the forgoing.
• 1. The loss of more than 50% of the equity of Landa AXTE, with various burdensome legal obligations under Greek Law.
• 1. The need for renovations to the main building of the hotel in Rhodes which has never been renovated since the date of its acquisition, that were budgeted to be approximately €7 million and the weakness of Landa AXTE to secure the necessary funds

Claridge Public Limited

Office of the Secretary

for this purpose. Without these renovations the hotel in Rhodes could not maintain its performance of last year.

There is no provision for goodwill for the said transaction and the loss that will result will be recognized in the Company's accounts in accordance with the International Financial Reporting Standards.

There is no relationship of any "determined person", as defined under article 137(3) of the Law in the transaction under consideration but the provision for repayment of the debt of Landa AXTE to Amathus Public Limited, which is €2.183.000 and shall be repaid in a period of 4 years.

The said transaction once completed, shall be on an arm's length basis and is expected in the short term to adversely affect the financial results of the Company because of the impairment of the investment in Leisure Holding S.A., however in long term it is estimated that it will relieve the Company from the continuous losses of Landa AXTE and the need for capital increases in Leisure Holding S.A., as more specifically has previously been referred too. It is also pointed out that once the transaction under consideration will be completed the liquidity of the Company will be improved because of the inflow of the amount of the sale.

It is finally noted that all the shareholders of Leisure Holding S.A. have accepted the binding offer of Invel and the completion of the transaction depends upon the successful completion of the due diligence and the various approvals required.

Limassol, 12 February 2015