The Management Board of BBI Development S.A. (hereinafter: "the Issuer", "Company") informs that on December 2, 2019 it was decided to start the analysis of the validity and feasibility of the existing assumptions for the "Małe Błonia" project in Szczecin, implemented by the Issuer's subsidiary: Realty 2 Management sp. z o. o Development Project 10 sp.k. (hereinafter: "PD10") and a review of alternative strategic options.
The current assumptions regarding the implementation of the "Małe Błonia" project are based on the concept of designing, constructing and commercializing subsequent stages of housing estates together with a supplementary plan for a possible change in the purpose of land designated for PD10 and its development for commercial and service investments. The implementation of the above assumptions to date has not, however, led to PD10 achieving revenues that would improve the subsidiary's financial result, ensure project profitability, and guarantee liquidity. Rising prices of housing investments, including especially construction materials, high historical purchase price of land, as well as significant financial costs burdening the PD10 result constitute the basis for the Management Board to make a decision on the feasibility and profitability study of existing assumptions for the project and assessment of alternative solutions for its further implementation.
The review of strategic options for the "Małe Błonia" project aims to select the most favorable scenario for the implementation of this project, which would allow to achieve the following strategic goals: improving PD10 liquidity, repayment of existing PD10 debt, faster generation of financial resources and significant reduction of operating costs. The Issuer's Management Board will carry out both an analysis of the current validity of the project assumptions as well as a review of alternative options for the implementation of further housing stages or the sale of PD10 assets.
The intention of the Management Board is to complete the review of strategic options that has already begun and to decide on the way to implement the 'Małe Błonia' project as early as 2019.
Confidential information MAR.
Source: company website, investor relations, current and periodic reports.