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22

Dec

Acquisition of shares in Rilon Bulgaria Jsc. - Bulgarian Mall of Plovdiv deal closing

The Board of Managing Directors of Cinema City International N.V. (the "Company") is happy to announce that on 21 December 2006 the Company's wholly-owned subsidiary -IT Sofia B.V. - completed the deal to acquire 3,000 ordinary shares with a nominal value of BGN 10 each (consisting of 500 existing shares and 2,500 newly issued shares) in a Bulgarian joint stock company Rilon Bulgaria Jsc The shares represent 30% of the share capital of Rilon Bulgaria Jsc and were acquired under the share purchase agreement between IT Sofia B.V., Sapphire Development EOOD (a company from the Aviv group) and Rilon Israel Ltd, Danmar Bulgaria Ltd and Centra Plovdiv Ltd. The share acquisition was financed from the Company's internal sources.

Rilon Bulgaria Jsc owns the land in a city of Plovdiv with around 400 thousand of inhabitants, which the Company, together with the Aviv group, is going to develop for its next shopping centre in Bulgaria, i.e., Mall of Plovdid. Together Aviv and the Company hold 60% of Rilon Bulgaria Jsc and will control the process of the mall development.

Furthermore, the Company completed a deal to lease space in the Mall of Plovdiv to operate a 10-screen multiplex. The lease agreement contains standard clauses typical for such agreements and gives the Company the exclusivity right to operate the cinema in the Mall of Plovdiv.

Earlier in the week, and in the presence of the Interior Affairs Ministry of Bulgaria, Mall of Plovdiv corner stone was celebrated in Plovdiv.

The Mall of Plovdiv project will be developed at the total cost of around EUR 40 million. Mall of Plovdiv will consist of approximately 24,000 sq. m, with over 100 shops spread on two floors, and over 600 car parking space. The mall is scheduled to open during 2008

The Development of the Mall of Plovdiv is important part of the Company's real estate strategy. The Company intends to sell the Mall of Plovdiv during the construction, like in the case of the Mall of Sofia, while holding the lease to operate the multiplex to be located therein.

Legal grounds: Art. 56.1.1 of the Act of 29 July 2005 on the public offering, conditions governing the introduction of financial instruments to organised trading system and on public companies.