Obbligazione CPI Real Estate Group SA 5% ( XS1279550260 ) in EUR

CPI Real Estate Group SA

100 EUR ⇌

Rep. Ceca

XS1279550260 ( in EUR )

5% per anno ( pagato 1 volta l'anno)

19/08/2025

Prospetto opuscolo dell'obbligazione Cpi Property Group SA XS1279550260 en EUR 5%, scadenza 19/08/2025

100 000 EUR

170 000 000 EUR

20/08/2025 ( In 47 giorni )

CPI Property Group SA è una società immobiliare con sede a Lussemburgo, specializzata nell'acquisizione, gestione e sviluppo di immobili commerciali di alta qualità in Europa Centrale e Orientale, principalmente in Repubblica Ceca, Polonia, Germania e Romania.

The Obbligazione issued by CPI Real Estate Group SA ( Czech Republic ) , in EUR, with the ISIN code XS1279550260, pays a coupon of 5% per year.
The coupons are paid 1 time per year and the Obbligazione maturity is 19/08/2025

CPI PROPERTY GROUP
330 million 5.0 per cent. Notes due 2025
(to be consolidated and form a single series with the
170 million 5.0 per cent. Notes due 2025 issued on 20 August 2015)
Issue price: 100 per cent.
(plus 77 days' accrued interest in respect of the period from and including 20 August 2015 to but
excluding the Closing Date (as defined below))
The 330 million 5.0 per cent. Notes due 2025 (the Notes) are issued by CPI PROPERTY GROUP, a public limited liability
company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 40,
rue de la Vallée, L-2661 Luxembourg and being registered with the Luxembourg trade and companies register (Registre de
Commerce et des Sociétés Luxembourg) under number B 102 254 (the Issuer). The Notes are unsecured obligations of the Issuer
only, and are not guaranteed by any other person. The Notes are to be consolidated and form a single series with the
170,000,000 5 per cent. Notes due 2025 issued on 20 August 2015. Any reference herein to the "Notes" includes, following
such consolidation, the Notes issued on 20 August 2015.
Interest will be payable annually in arrear on 20 August of each year (each an Interest Payment Date), subject to adjustment for
non-Business Days in accordance with the Conditions of the Notes. Interest will accrue from and including 20 August 2015 to
but excluding the Final Maturity Date and will be at a rate of 5.0 per cent. per annum, as further described under "Terms and
Conditions of the Notes - Interest". The Notes mature on 20 August 2025 (the Final Maturity Date). See "Terms and
Conditions of the Notes - Redemption".
Payments of interest under the Notes will be made without deduction or withholding for tax, unless required by law. If any such
deduction or withholding is required to be made, neither the Issuer nor any paying agent will be obliged to make any additional
payments to holders of Notes in respect of such withholding or deduction.
The Issuer may, at its option, redeem all, but not some only, of the Notes on any Interest Payment Date at par plus accrued
interest, upon giving not less than 30 days nor more than 45 days' notice to Noteholders.
Application has been made to the Luxembourg Stock Exchange, in its capacity as market operator of the Euro MTF market (the
Euro MTF Market) under the rules and regulations of the Luxembourg Stock Exchange, to approve this document as a
Prospectus (the Prospectus) pursuant to Part IV of the Luxembourg law on prospectuses for securities dated 10 July 2005, as
amended. Application has been made for the Notes to be listed on the official list of the Luxembourg Stock Exchange and to be
admitted to trading on the Euro MTF Market. The Euro MTF Market is not a regulated market for the purposes of the Markets in
Financial Instruments Directive (Directive 2004/39/EC). This Prospectus does not constitute a prospectus pursuant to the
Directive 2003/71/EC as amended.
The Notes will initially be represented by a temporary global note (the Temporary Global Note), without interest coupons,
which will be deposited on or about 5 November 2015 (the Closing Date) with a common safe-keeper for Euroclear Bank
SA/NV (Euroclear) and Clearstream Banking, société anonyme (Clearstream, Luxembourg). Interests in the Temporary
Global Note will be exchangeable for interests in a permanent global note (the Permanent Global Note and, together with the
Temporary Global Note, the Global Notes), without interest coupons, upon certification as to non-U.S. beneficial ownership.
Upon exchange of the Temporary Global Note for the Permanent Global Note, the Notes will be consolidated and form a single
series with the 170,000,000 5 per cent. Notes due 2025 issued on 20 August 2015. The Global Notes will be exchangeable for
definitive notes only in the limited circumstances described under "Description of the Notes in Global Form".
An investment in Notes involves certain risks. Prospective investors should have regard to the factors described under
the heading "Risk Factors" on page 5.
The date of this Prospectus is 5 November 2015

The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge
of the Issuer, the information contained in this Prospectus is in accordance with the facts and does not omit
anything likely to affect the import of such information.
This Prospectus is to be read in conjunction with all documents which are deemed to be incorporated herein by
reference (see "Documents Incorporated by Reference"). This Prospectus should be read and construed on the
basis that such documents are incorporated and form part of the Prospectus.
No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is
accepted by any person other than the Issuer as to the accuracy or completeness of the information contained or
incorporated in this Prospectus or any other information provided by the Issuer in connection with the offering
of the Notes. No person other than the Issuer accepts any liability in relation to the information contained or
incorporated by reference in this Prospectus or any other information provided by the Issuer in connection with
the offering of the Notes or their distribution.
No person is or has been authorised by the Issuer to give any information or to make any representation not
contained in or not consistent with this Prospectus or any other information supplied in connection with the
offering of the Notes and, if given or made, such information or representation must not be relied upon as
having been authorised by the Issuer.
Neither this Prospectus nor any other information supplied in connection with the offering of the Notes (a) is
intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation
by the Issuer that any recipient of this Prospectus or any other information supplied in connection with the
offering of the Notes should purchase any Notes. Each investor contemplating purchasing any Notes should
make its own independent investigation of the financial condition and affairs, and its own appraisal of the
creditworthiness, of the Issuer. Neither this Prospectus nor any other information supplied in connection with
the offering of the Notes constitutes an offer or invitation by or on behalf of the Issuer to any person to subscribe
for or to purchase any Notes.
Neither the delivery of this Prospectus nor the offering, sale or delivery of the Notes shall in any circumstances
imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date
hereof or that any other information supplied in connection with the offering of the Notes is correct as of any
time subsequent to the date indicated in the document containing the same. The Notes have not been and will
not be registered under the United States Securities Act of 1933, as amended, (the Securities Act) and are
subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or
delivered within the United States or to U.S. persons (as defined in Regulation S under the Securities Act). For
a further description of certain restrictions on the offering and sale of the Notes and on the distribution of this
document, see "Subscription and Sale" below.
This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy the Notes in any
jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The
distribution of this Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions.
The Issuer does not represent that this Prospectus may be lawfully distributed, or that the Notes may be lawfully
offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or
pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution
or offering. In particular, no action has been taken by the Issuer or any other person which is intended to permit
a public offering of the Notes or the distribution of this Prospectus in any jurisdiction where action for that
purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this
Prospectus nor any advertisement or other offering material may be distributed or published in any jurisdiction,
except under circumstances that will result in compliance with any applicable laws and regulations. Persons
into whose possession this Prospectus or any Notes may come must inform themselves about, and observe, any
such restrictions on the distribution of this Prospectus and the offering and sale of Notes. In particular, there are
restrictions on the distribution of this Prospectus and the offer or sale of Notes in the United States, the

European Economic Area (including the United Kingdom and Luxembourg) and Japan; see "Subscription and
Sale".
Each person receiving this Prospectus, by acceptance hereof, hereby acknowledges that this Prospectus has been
prepared by the Issuer solely for the purpose of offering the Notes described herein.
All references in this document to euro and refer to the currency introduced at the start of the third stage of
European economic and monetary union pursuant to the Treaty establishing the European Community, as
amended.

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___________________________________
CONTENTS
Page
Risk Factors ............................................................................................................................................................ 5
Documents Incorporated by Reference ................................................................................................................. 18
Terms and Conditions of the Notes ...................................................................................................................... 19
Description of the Notes in Global Form .............................................................................................................. 29
Use of Proceeds .................................................................................................................................................... 32
Description of the Issuer and the Group ............................................................................................................... 33
Capitalisation of the Issuer ................................................................................................................................... 48
Taxation ................................................................................................................................................................ 49
Subscription and Sale ........................................................................................................................................... 54
General Information ............................................................................................................................................. 56
Index of Defined Terms ........................................................................................................................................ 58
Index to the Extracts from the Financial Statements of the Issuer ........................................................................ 59
Appendix 1
Extracts from the Issuer's consolidated financial reports as of 31 December 2014 ............ F-1
Appendix 2
Extracts from the Issuer's consolidated financial reports as of 31 December 2013 ............ F-6

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RISK FACTORS
The Issuer believes that the following factors may affect its ability to fulfil its obligations under the Notes.
These factors are contingencies which may or may not occur and the Issuer is not in a position to express a view
on the likelihood of any such contingency occurring.
In addition, factors which are material for the purpose of assessing the market risks associated with the Notes
are described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the
Notes, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with the
Notes may occur for other reasons which may not be considered significant risks by the Issuer based on
information currently available to it or which it may not currently be able to anticipate. Prospective investors
should also read the detailed information set out elsewhere in this Prospectus and reach their own views prior
to making any investment decision.
Factors that may affect the Issuer's ability to fulfil its obligations under the Notes
Risks related to the business of the Issuer and its subsidiaries (together, the Group)
Any decline in occupancy levels may have a direct impact on the Group's cashflows.
The Group invests in real estate and derives a significant proportion of its cashflows from rental payments
received from the tenants occupying its properties (the Properties) Any significant decline in occupancy levels
in respect of the Properties could have a material adverse effect on the ability of the Issuer to make payments of
interest on the Notes. Factors affecting occupancy may include, but are not limited to:
1.
age, quality and design of a property relative to comparable properties in the local market;
2.
location relative to public transportation;
3.
relative maintenance and upkeep of a property, including any work done by third-party service
providers; and
4.
perceptions regarding the safety, convenience and attractiveness of the property.
As leases expire, there can be no assurance that the tenants will renew their leases on terms favourable to the
Group at the end of their current tenancies or, if they do not, that new tenants of equivalent standing (or any new
tenants) will be found to take up replacement leases.
Any failure of the Group to sustain an adequate occupancy level could have a material adverse effect on any
Group member's ability to collect rent payments. Further, the relevant Group member would continue to face
fixed costs (subject to certain exceptions) to cover service charge contributions in respect of any vacant units,
which would reduce amounts available to make payments of interest on the Notes.
The valuations performed on the Group's real estate portfolio represent the analysis and opinion of
independent experts and are not guarantees of present or future value.
The financial statements of the Group reflect property valuations performed by external valuation agents and are
not guarantees of present or future value. One external valuation agent may reach a different conclusion to the
conclusion that would be reached if a different external valuation agent were appraising the same property, and
similarly the same external valuation agent may come to a different conclusion at different periods of time. This
variation may be due to the use of different methodologies and assumptions.

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Any change to valuation methodology may result in gains or losses in the Group's consolidated income
statement, based on the change to each property's valuation compared with prior valuations. There can be no
assurance that any revaluation could be realised in a third-party sale.
The valuations given to properties by any external valuer and reflected in the Group's financial statements may
exceed or be below the actual amount of net proceeds which would be realised on the relevant property at the
time of any sale, and are subject to fluctuation over time. Such variations may be driven by factors outside the
control of the Group. The net proceeds realised from any future disposal may vary from the related valuation
and such variations may be material and the relevant Group member may not be able to realise the full property
value reflected in any valuation report. This could have a material adverse effect on the ability of the Issuer to
repay in full principal under the Notes.
The Group's consolidated income statement has been and may be significantly affected by changes in the fair
market value of the Group's Properties.
The Group's investment properties are generally revalued annually in accordance with IAS 40 at their respective
market value on the reporting dates. Since changes in the fair value of investment property are recognised in the
Group's consolidated income statement for the period in which they arise, such non-cash valuation gains or
losses can materially affect the Group's consolidated income statement.
If the values of comparable commercial real estate properties decrease, the Group may experience revaluation
losses in the future.
Geographic concentration.
The Properties are located throughout Central and Eastern Europe, with a material concentration of units located
in Berlin and Prague. The market value of the Properties and ultimately, funds available to the Issuer to make
repayments under the Notes and could be adversely affected by conditions in the property markets where the
Properties are located, acts of nature, for example floods (which may result in uninsured losses), and other
factors which are beyond the control of the Group. In addition, the performance of the Properties will be
dependent upon the strength of the economy in the regions in which the Properties are located.
The Group is exposed to general commercial property risks.
The Group is exposed to all of the risks inherent in the business of owning, managing and using commercial and
residential real estate. Its performance may be adversely affected by an oversupply or a downturn in the
commercial real estate market in general, or the commercial real estate market in those cities in which the
Properties are located. For example, rental income and the market value for properties are generally affected by
overall conditions in the EU and national and local economy, such as growth in gross domestic product (GDP),
inflation and changes in interest rates. Changes in GDP may also impact employment levels, which in turn may
impact the demand for premises generally.
Other factors which could have an impact on the value of a Property are more general in nature, such as
national, regional or local economic conditions (including key business closures, industry slowdowns and
unemployment rates, and any cyclical patterns relating to these trends); local property conditions from time to
time (such as the balance between supply and demand); demographic factors; consumer confidence; consumer
tastes and preferences; changes in governmental regulations including retrospective changes in building codes;
planning/zoning or tax laws; potential environmental legislation or liabilities; the availability of refinancing, and
changes in interest rate levels or yields required by investors in income producing commercial properties.
The demand for commercial properties and the ability of such properties to generate income and sustain market
value is based on a number of factors, including:

the economic and demographic environment;

6

renovation work required on vacant units before they are re-let;

tenant credit risk;

workplace trends including its growth rate, telecommuting and tenant's use of space sharing;

local infrastructure and access to public transportation;

the competitive environment; and

tenant expectations of facility quality and upkeep.
Any deterioration in demand may result in increased pressure to offer new and renewing tenants financial and
other incentives, which may lead to an overall negative impact on net rental incomes as operating expenses
increase. The occurrence of any one or a combination of the factors noted above may have a material adverse
effect on the value of the Properties and any potential to increase rent following rent reviews. Any deterioration
on net rental income or the value of the Properties could adversely affect the ability of the Issuer to make
payments of interest and/or principal on the Notes.
The Group may not be able to successfully refinance its obligations under the Notes on the Final Maturity
Date.
Unless previously redeemed, the Notes will be required to be repaid by the Issuer in full on the Final Maturity
Date. The ability of the Issuer to repay the Notes in their entirety on the Final Maturity Date will depend, among
other things, upon it having sufficient available cash and/or upon its ability to find a lender willing to lend to it
sufficient funds to enable repayment of the Notes. The availability of funds in the credit market fluctuates and it
is always possible that at the relevant time there will be a shortage of credit to redeem the Notes or other
indebtedness.
If the Issuer is unable to refinance the Notes, it may be forced, in unfavourable market conditions, into selling
some or all of the Properties in order to repay the Notes, and there can be no assurance that the assessed fair
value of the Properties would be realised under such circumstances. Failure by the Issuer to repay or refinance
the Notes or by the Group to sell the Properties on or prior to the Final Maturity Date (or any sale occurring at
an unfavourable price) may result in the Issuer defaulting on the Notes and in its insolvency.
Certain of the Group's Properties are subject to legacy restrictions incurred through historical receipt of
public subsidies.
GSG Berlin (as defined below) is a part of the Group and operates Properties of the Group in Berlin. GSG
Berlin was the beneficiary of subsidies granted pursuant to the German Act on the Joint Scheme for Improving
Regional Economic Structures (Gesetz über die Gemeinschaftsaufgabe "'Verbesserung der regionalen
Wirtschaftsstruktur"), which are specified by Regional Development Strategic Frameworks (Rahmenplan) that
apply for set periods of time. The Properties to which these subsidies have been applied remain subject to
certain conditions and restrictions, including on rent levels and tenant requirements.
Compliance with these restrictions may limit the Group's ability to fully exploit those Properties until the
relevant expiration dates of such restrictions. Furthermore, there is some uncertainty as to the interpretation and
period of application of these restrictions, and any breach by GSG Berlin of these obligations may lead to a full
or partial revocation of the subsidies for the affected Properties, which may lead to GSG being required to
reimburse the relevant public authorities. There can be no assurance that any interpretations made now may not
be subsequently challenged as a result in change of interpretations or a change in the relevant agency.

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The members of the Group may be exposed to the credit risk of their tenants and the risks of the industries in
which they operate.
The Group may be exposed to the credit risk of its tenants. There can be no assurance that a tenant will remain
solvent and able to perform its obligations throughout the term of its lease.
Income from, and the market value of, the Properties would be adversely affected if material numbers of tenants
were unable to meet their lease obligations, were to become insolvent, or if, for any other reason, rental
payments could not be collected.
An economic decline in the businesses operated by tenants can affect a building, including the Properties, and
cause one or more significant tenants to cease operations and/or become insolvent. Further, the Group faces
certain fixed costs which it is obligated to pay regardless of whether or not it receives payments from tenants to
fund such expenses.
The Group may not be able to successfully recover operating, maintenance costs and capital expenditure
costs from its tenants.
To maintain the Properties and comply with applicable law, it is necessary to perform maintenance and/or
repairs. Such measures can be time consuming and expensive, and risks can arise in the form of higher costs
than anticipated or unforeseen additional expenses for maintenance, repair or modernisation that cannot be
passed on to tenants. Moreover, work can be delayed, for example, because of bad weather, poor performance or
insolvency of contractors or the discovery of unforeseen structural defects. In the ordinary course of events, the
Group may fund such capital expenditure out of cash flow generated by the Properties. If the necessary capital
expenditure is not undertaken, this could lead to a decline in the value of the relevant Properties, impacting on
the liquidation or refinancing value thereof and hence the ability to generate sufficient disposal refinancing
proceeds. Changes in government regulations may result in additional capital expenditure requirements to
modernise or maintain the Properties, for example refurbishment to comply with energy efficient standards or
health and safety requirements, which may not always be possible to charge to tenants.
The Group is exposed to risks relating to hotel properties.
Ten per cent. by value of the Group's Properties are operated as hotels by the Group or by third parties. A
number of factors may adversely affect the value and successful operation of a hotel property. Some of these
factors include general economic conditions, the level of business and leisure travel in the local economy, the
franchise affiliation of the hotel, the competition for the hotel and the desirability of the hotel's location.
Adverse economic and social conditions, either local or national, may limit the amount that can be charged for a
room and may result in a reduction of occupancy levels. The construction or development of competing hotels
can have similar effects. To meet competition in the industry and to maintain economic values, continuing
expenditures must be made for modernising, refurbishing and maintaining existing facilities prior to the
expiration of their anticipated useful lives. As hotel rooms generally are rented for short periods of time, hotels
tend to respond more quickly to adverse economic conditions and an operator of a hotel may have an impact on
such hotel's quality of service and economic performance. Additionally, the hotel industry is generally seasonal
in nature and this seasonality can be expected to cause periodic fluctuations in a hotel property's room and other
hotel revenues, occupancy levels, room rates and operating expenses. The demand for particular
accommodations may also be affected by changes in travel patterns and other factors. In addition, as seen in
recent years, acts of terrorism, outbreaks of disease and other difficulties not directly related to an economic
downturn can have an adverse impact on both leisure and business travel and, therefore, should be considered as
a potential factor in evaluating the performance of a hotel property.
Adverse changes in any of the factors described above could adversely affect income derived from the Group's
hotel properties, which could in turn affect the ability of the Issuer to meet its obligations in respect of the
Notes.

8

The Group's agricultural business is exposed to the risk of adverse weather, commodity prices or disease.
The Group has investments in farmland and agricultural production, which are primarily focussed on high-
quality and vertically integrated production of beef, lamb and chicken.
Its agricultural business operates in a highly competitive environment. In addition to the risk of over-supply and
competition from both domestic and imported products, the Group is exposed to volatility in commodity prices,
which may affect both the prices it is able to achieve for its products, and the cost of its inputs such as stock feed
and fertiliser, as well as drought, disease and the imposition of quarantine, import or export restrictions. Such
factors may adversely affect the Group's return from its agricultural investments and therefore on its business,
financial condition, results of operations and prospects.
The Group has significant investments in emerging markets.
The Group has significant investments in Central and Eastern Europe. Investors should be aware that these
markets are subject to greater risk than more developed markets, including in some cases significant legal,
economic and political risks. Investors should also note that emerging economies are subject to rapid change and
that the information set out herein may become outdated relatively quickly. Accordingly, investors should
exercise particular care in evaluating the risks involved and must decide for themselves whether, in light of
those risks, their investment is appropriate. Generally, investment in emerging markets is only suitable for
sophisticated investors who fully appreciate the significance of the risks involved, and investors are urged to
consult with their own legal and financial advisors before making an investment in the Notes.
The Group is exposed to exchange rate risk.
The Notes are denominated in Euro, while the Group derives revenues and holds assets in currencies other than
Euro. Any fall in the value of such currencies relative to the Euro may reduce the Euro amount of the Group's
revenues and assets which is available to pay interest and principal on the Notes.
The Group is dependent on co-operative relations with its employees.
Any sustained labour dispute affecting the Issuer or any of its direct or indirect subsidiaries which employ
property and asset management teams, could lead to a substantial interruption of the business of the Group and
could have a material effect on their operating results or financial condition and the ability of the Issuer to make
payments on the Notes. Furthermore, the Group's employees are critical to the successful implementations of its
business strategy. If the Group fails to retain and attract the necessary and effective employees to fill
management and technical roles and at economically reasonable compensation levels, such a failure will
adversely affect the Group's ability to operate its business effectively and this could have a material effect on its
operations which could indirectly have a material adverse effect on the Issuer's ability to make payments on the
Notes.
The Group depends on its asset and property managers and other key personnel.
The Group's Properties require intensive management and the success of the Group and therefore indirectly the
ability of the Issuer to make payments on the Notes depends on the performance of its asset and property
managers and certain key personnel. Were such asset or property managers or key personnel to depart, the
Group may not be able to find effective replacements in a timely manner, or at all. The loss of these individuals,
or of any senior member of management, or any delay in replacing a departed member, may result in the loss of
industry and property specific knowledge as well as relationships with lenders, potential tenants and industry
personnel.

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Interruption or failure of the Group's information technology systems could damage its reputation and
business.
The Group is dependent on the proper functioning of its information systems and processes. The Group's
systems and the systems on which it relies are vulnerable to damage or interruption from various factors,
including but not limited to power loss, telecommunication failures, data corruption, network failure, computer
viruses, security breaches, natural disasters, theft, vandalism or other acts. A disaster or disruption in the
infrastructure that supports the Group's businesses could have a material adverse effect on its ability to continue
to operate the Group's business without interruption.
The Group is also reliant on the general and timely functioning of banking systems and associated technology in
order to receive and make payments. Any cessation of the ordinary functioning of the banking system or any
interruption of payment systems may impact the ability to collect rents from tenants and could prejudice the
ability of the Issuer to make payments in respect of the Notes.
The members of the Group may sustain losses from damages or risks not covered by, or exceeding the
coverage limits of, its insurance policies.
The Group maintains insurance policies (including with respect to the Properties) which it considers appropriate
to the nature of its business.
However, there are certain types of losses (such as losses resulting from war, terrorism, nuclear radiation,
radioactive contamination and heaving or settling of structures) which are or may be or become either
uninsurable or not insurable at economically viable rates, or which for other reasons are not covered by the
Group's insurance policies. The Issuer's ability to make payments on the Notes might be affected adversely if
such an uninsured loss were to occur or the relevant insurer became insolvent or otherwise unable to satisfy any
claim, and the Group was not able to shift the cost burden to the tenant or another third party.
No assurance can be given that material losses in excess of insurance proceeds will not occur in the future. Any
such uninsured loss or a loss in excess of insured limits may have a material adverse effect on the Group's
business, financial condition, results of operations and prospects.
Unexpected problems and unrecognised risks could arise in the Group's future conversion or development
projects.
The Group is engaged in development projects and may undertake further development or conversion projects in
the future. The real estate construction and development business is subject to certain risks arising from the
complexity of the projects, including higher than expected costs, breaches of labour laws, delays in completion,
the application of regulations, health and safety or environmental constraints, the multiplicity of participants and
the need to obtain permits. These risks could result in the abandonment of projects after significant feasibility
study costs and management attention have been expended.
The Group's controlling shareholder's interest may differ from the interests of Noteholders.
The Group is indirectly controlled by Mr. Radovan Vítek, who, through his associated entities, controls 75.47
per cent. of the Issuer's shares and 90.57 per cent. of voting rights. In his position, Mr. Vítek has the power to
influence the outcome of most material matters that require the election of the majority of board members and,
subject to contractual and legal restrictions, the distribution of dividends. He could exercise influence over the
Group's legal and capital structure, day-to-day operations and business strategies, and his interests may in some
cases differ from those of the Issuer or of Noteholders.

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