Closing of transaction with Kinepolis Group
With reference to current report no. 3/2007 of 16 January 2007 the Board of Managing Directors of Cinema City International N.V. (the "Company") informs that on 19 January 2007 the Company's wholly-owned subsidiary - Cinema City Poland sp. z o.o. completed with companies from Kinepolis Group - Kinepolis sp. z o.o. and Kinepolis Poznah sp. z o.o. ("Kinepolis Group") a deal to operate a 18-screen multiplex in Poznah previously run by Kinepolis.
As a result of this transaction, the Company has acquired, in particular, assets necessary to operate a multiplex, non-material assets of an organised part of Kinepolis sp. z o.o. enterprise and assumed rights and obligations arising from certain agreements and arrangements related to Kinepolis Group cinema activity in Poznan.
The Company also leases 18 out of 20 cinema auditoria located in the building owned by Kinepolis Group in Poznan in which previously Kinepolis Group operated its multiplex. Two lease agreements dated 22 August 2006 between Cinema City Poland sp. z o.o. and IT Poland Development 2003 sp. z o.o. (the Company's wholly-owned subsidiary) on one hand and Kinepolis Poznan sp. z o.o. on the other hand are concluded for 10 years with an option to prolong lease for another 5 years and contain standard clauses typical for such agreements. Rent for lease of 18 auditoria is set on market conditions.
As a result of this transaction, the Company operates the multiplex under the name 'Cinema City Kinepolis' in Poznah: with 18 screens (two remaining auditoria are run by Kinepolis Group and will be used for events or commercial purposes), whereas Kinepolis Group remains the owner of the land and buildings and continues to manage the real estate activities.
Legal grounds: Art. 56.1.1 of the Act of 29 July 2005 on public offering and conditions governing the introduction of financial instruments to trading in the organised trading system and on public companies.
Signatres of persons authorised to represent the Company Mr. Israel Greidinger- proxy.