Current report 2/2020 of 20 January 2020

Key investor brought in for first investment project under logistics platform and strategic partnership on warehousing market

The Management Board of REINO Capital S.A., based in Warsaw, (“Issuer”) announces that on 20 January 2020 REINO IO CO INVEST LLP, which is a joint venture established with the participation of IO CO INVESTOR 3 LLP, an entity related to IO Asset Management, as part of a strategic partnership that was disclosed by the Issuer in current report 30/2019 of 4 October 2019, signed agreements with Grosvenor addressing rules for cooperating on the formation and management of investment vehicles on the logistics property market.

POLISH LOGISTICS (UK) LLP was founded in order to execute the first undertaking on the Polish market. This company, through investment vehicles in the form of limited partnerships, will invest in logistics properties located in Poland. The agreement lays out in details rules for financing investments, exercising votes in Polish SPVs and paying out profit.

At this stage, Grosvenor will be the sole equity investor in the aforementioned investment structure. However, REINO Capital and IO Asset Management, as the authors of an investment platform for warehousing projects and managers of its assets, particularly through REINO IO Logistics Sp. z o.o., will each equally invest a total of 1% of the capital necessary to implement the first undertaking, out of which the Issuer’s capital stake is 0.5%  An equity investment at this level performed by asset management entities having decisive impact on the success (outcome) of the investment is typical for this type of case. This way, entities of key importance to the investment’s success participate in the financial risk at the owner level, which is crucial for passive investors. At the same time, REINO IO CO INVEST LLP, with a capital contribution of 1%, will have a 50% stake in voting rights.

According to the first project’s business line, the Issuer’s investment includes a monetary contribution of approx. EUR 212 000. The agreement includes an obligation to make further contributions for further investments being implemented by POLISH LOGISTICS (UK) LLP and a range of obligations for shareholders, failure to perform which would risk losing voting rights or having to sell the stake in companies or return payouts from profit. In extreme cases, the Issuer might lose the invested capital.

According to the Issuer, its group companies involved in the investment have the knowledge and competences necessary to limit risk factors related to executing the agreement. In the context of the risk factors related to the aforementioned agreements and warehousing market platform, also of key importance is the possibility of benefiting from IO Asset Management’s experience and competences, in terms of both managing assets on the warehouse market (which the strategic partner focuses on) and cooperating with as prestigious and demanding an investor as Grosvenor, which has for many years been investing in investment projects managed by IO Asset Management on the U.K. market.

Grosvenor Group is one of the largest private property investors in the world, operating in 60 countries in Africa, Australia, Europe, North and South America. Its assets under management exceed GBP 12 billion. The Group is interested in all property asset classes and its portfolio includes prestigious real estate in up-scale London districts such as Mayfair and Belgravia.

According to the Management Board, bringing in such an experienced and esteemed investor for strategic cooperation will make it possible to significantly grow the Issuer’s operational scale in reference to the composition and value of the assets of the managed investment vehicles, which will be reflected in acquiring new investors for funds and investment projects created and managed by REINO Capital entities to an extent reaching beyond the logistics market.

Legal basis:

art. 17 sec. 1 MAR – inside information