Notification regarding the Extraordinary General Assembly of shareholders of Monbat AD

An Extraordinary General Assembly of shareholders of Monbat AD  was held on April 21, 2022

According to the preliminary submitted materials, the purpose of the General Assembly of Shareholders was to inform the shareholders about the prospects, regarding the investment in the capital of the subsidiary Monbat Immobilien GmbH.

Since the initial acquisition, the investment has been treated as an asset for potential sale, and the Management of Monbat making continuing efforts to find a buyer. The balance sheet of Monbat Immobilien GmbH includes real estate assets – land, buildings and facilities that have no production purpose. The company has neither other assets, nor liabilities other than to the parent company. The acquisition of the Austrian company was fulfilled in return for the sale of Monbat’s investment in Octa Light AD. The reasons for the sale have been publicly announced.

The effect achieved of the counter-sale was the suspension of subsidies for the activities of Octa Light – necessitating from lack of funding, aimed at manufacturing modernization of the company mentioned. The purchase of Monbat Immobilien GmbH had the effect of fixing the amount of the investment and preventing it from being further reduced due to the growing need for subsidies.

At the time of Monbat Immobilien GmbH acquisition and in immediate perspective, the price of the company assets indicated proportionality to the counter-value of the sold investment in Octa Light. Considering the volatile situation in real estate prices and in particular – in the segment of Monbat Immobilien GmbH property – the management of Monbat undertook immediate action for seeking prospects. Therefore, initially in the United Kingdom, and later in Austria, specialized real estate companies were engaged. Property information was distributed among potentially interested buyers from Russia, China, and the Middle East.

Unfortunately, due to the COVID-19 pandemic and the ensuing war in Ukraine, interest in this type of real estate radically decreased resulting in only two offers eventually received, indicative of the potential parameters, under which the properties could be realized in the near future.

The Board of Directors considers it necessary to inform the shareholders about the conditions in the offers:

Offer 1 – Sale of the subsidiary Monbat Immobilien GmbH

Price offer: 8,000,000 euros

Buyer: a not interested person within the meaning of Article 114, paragraph 7 of the Public Offering of Securities Act.

Offer 2 – Sale of the land plots, buildings and fixed facilities owned by the Monbat AD’s subsidiary company Monbat Immobilien GmbH in Schwarzenau Austria.

Price offer: 7,200,000 euros

Buyer: a not interested person within the meaning of Article 114, paragraph 7 of the Public Offering of Securities Act.

The intention of Monbat management is to obtain approval for further actions for the sale of the Monbat Immobilien GmbH under conditions,  not worse than those in the bids submitted, regardless of how this may happen – by selling its assets or sale of shares in the Austrian company. The aim is to provide the necessary liquidity to Monbat by using the funds from the sale to support working capital and planned investments.

Given the stable rate of return on capital employed in the core business of Monbat, these funds will generate added value, compensating in the foreseeable future any potential negative price deviation from the value of the investment, and will also prevent the risk of further reduction of the net value of the properties, taking into account the emerging innate maintenance costs.