City Service SE
Notification on material event

AB City Service reached important agreement in negotiations on acquisition of an enterprise in Poland

Vilnius, Lithuania, 2012-12-06 08:18 CET -- On 4 December, 2012 AB City Service has reached an important agreement in negotiations on acquisition of an enterprise in Poland, Zespół Zarządców Nieruchomości WAM Sp. z o.o. (ZZN further on) 100% share stock.

The Company and the representatives of employees of ZZN have agreed on terms of social package. This agreement frames preconditions for signing a sale – purchase agreement with Ministry of Treasury of Poland in a short term. The Company will take over ZZN after agreement of privatization is signed and shares are paid. Management of the Company plans to finish the transaction before the end of 2011.

Žilvinas Lapinskas, General Director of AB City Service, stated: Entering market of Poland is the most important step in history of City Service group since 2006, when we started activities in St.Petersburg, Russia. ZZN is the largest enterprise acting in the market of residential facility management in Poland with 8.5 million sq. meters of facilities under management. This composes only 3.4% market share, that is why we hold this acquisition as a very important platform for a strategic step into large and prospective market of facility management services. In Poland, we plan to provide services not only for residential buildings, but also for commercial, public buildings and industrial objects.

As Mr.Lapinskas remarked, by expanding its geography into Central Europe, City Service group opens new opportunities in the future.

ZZN manages 8.5 million sq. meters of residential facilities and maintains 22 offices in main towns in Poland. The enterprise holds 3.4% share of Poland’s residential facility management market and provides services to approximately 4000 commonwealths of residential apartment houses. In Poland there are approximately 146.000 commonwealths with 250 million sq. m. of residential housing area in their possession. There are also approximately 3700 cooperatives of residents with 150 million sq. meters of housing area in their possession.

Privatization of 100 share stock of ZZN is in progress since June 2012. ZZN provides residential apartment building management, technical supervision, cleaning and other utility services, also acts as producer and supplier of heat in some of the managed buildings.

         Vilius Mackonis,
         Head of communication
         +370 5 239 4900