Pandora Investments Public : Announcement 21.09.2022

ANNOUNCEMENT

Pandora Investments Public Company Limited (the "Company"), parent company of the Pandora Group of Companies (the "Group"), hereby announces the completion on the 21st of September 2022 of the agreement that had been entered into with Bank of Cyprus (the "Bank") in September 2019 (as subsequently amended), whereby the Group had been granted the right, subject to terms and conditions, for the early repayment of a significant portion of its long-term borrowings from the Bank in return for, amongst others, the transfer to the ownership to the Bank of the four plots of land referenced below (the "Agreement").

The Board of Directors considers that the completion of the Agreement is a positive development for the Group as it results in a significant reduction of its borrowings during a period of substantial financial volatility, while creating opportune circumstances for the further development of the Group's operations, especially in regard to the Neapolis Smart Eco City mega project (the "Project") which is owned by Neapolis Development Properties Limited ("NDP"), a subsidiary of the Company. Specifically, after having secured partial funding from the Bank and the recent issuance of the revised planning permit for the Project, the Group has undertaken the construction of certain infrastructure and other works in the Project in the near future, thereby commencing the construction of this multi-faceted project which encompasses a university, a health park, commercial, residential, hotel and office uses that shall unveil the uniqueness, strategic location and advantages of the Project, with commensurate benefits for the Group as well as the society and the economy of the district of Paphos.

As a result of exercising the aforementioned right, all the convertible bonds that had been issued to the Bank by Neapolis Development Holdings Limited ("NDH"), a wholly-owned subsidiary of the Company and the sole owner of NDP, were settled in full. The settlement involved all the convertible bonds with a nominal value of €100mm that were issued in March 2016, as well as all the convertible

bonds that had been issued since then against the payment of interest ("Payment in Kind Notes") with a nominal value of €69.9 mm. The fair value of all such convertible bonds was €117.0mm as of 31 December 2021 and 30 June 2022.

The settlement of the aforementioned convertible bonds was effected through (i) the provision of a new long-term loan of €10.0mm to NDH from the Bank, and (ii) the transfer by NDP to subsidiary companies of the Bank of the ownership of four plots of land located in the north/northeast edge of the Project that were classified as investment property in the Group's accounts. The total allowable building coefficient of such plots of land as per the Project's revised planning permit is c. 27% of the overall allowable building coefficient of the whole Project. As part of the overall agreement and among other terms and rights, the Bank has agreed to assign to the Group the works required for the conversion of such plots of land into building plots.

It should be noted that the building coefficient of the four plots of land that were transferred to the ownership of the Bank allows solely residential use development, and thus it's fair value is not directly comparable with the fair value of the building coefficient of the remaining Project which, besides residential use development, also includes university, health care, tourist, office, commercial and other development uses and other enhancement works.

It is hereby clarified that the fair value of the Project as stated in the Group's most recent audited financial statements (€333mm as of 31 December 2021) was determined based on a general overall valuation methodology, and did not involve a specific valuation of each area of the Project that would take into account its respective unique characteristics, planning permit terms and conditions and development prospects. The Group is in the process of developing a revised business plan for the Project that shall take into account the completion of the Agreement with the Bank, the terms and conditions of the revised planning permit, the unique characteristics, planning permit terms and conditions and development prospects of each area of the Project, as well as the current macroeconomic environment. The fair value of the remaining Project as well as of the plots of land

that were transferred to the ownership of the Bank shall be determined based on such revised business plan.

As such, the financial impact of the Agreement on the Group can't be determined at present. Such impact will be announced during the first quarter of 2023, promptly following the finalization of the revised business plan for the Project.