DGAP-News

GAGFAH S.A. and the City of Dresden agree on amicable settlement

DGAP-News: GAGFAH S.A. / Key word(s): Legal Matter
GAGFAH S.A. and the City of Dresden agree on amicable settlement

02.03.2012 / 20:05

---

Press Release: March 02, 2012
GAGFAH S.A.
2-4, rue Beck
L-1222 Luxembourg

ISIN: LU0269583422
Frankfurt Stock Exchange, Regulated Market (Prime Standard)

GAGFAH S.A. and the City of Dresden agree on amicable settlement

Luxembourg, March 02, 2012 - GAGFAH S.A. and the City of Dresden agree on
amicable settlement to end legal dispute over the WOBA DRESDEN GmbH
Privatization Agreement. The settlement is subject to approval by the City
Council of Dresden and clearance by the City´s legal supervision authority.
Key points:

  - Resolution of the legal dispute directly benefits the tenants

  - Investment in portfolio agreed to be increased with about EUR 15
    million allocated to social projects

  - Occupation rights for the city increased; Social Charter extended

In the interests of a timely resolution of the disputes and in order to
maintain good relations and cooperation, GAGFAH S.A. and the City of
Dresden have agreed to fully resolve their dispute by way of an amicable
settlement that will primarily benefit tenants in Dresden. Towards that
end, the WOBA companies and the City of Dresden have signed and notarized a
settlement agreement today. This agreement is subject to formal approval by
the City Council and clearance by the City´s legal supervisory authority.
The City Council will probably decide about the approval on March 15, 2012.

The settlement agreement provides for the withdrawal of all lawsuits and
the mutual waiver of all claims made in connection with the litigation. It
has been agreed that in the future disputes between the parties will be
handled through an extrajudicial settlement process, and a cure period will
be employed to avoid contractual penalties. Furthermore, the City of
Dresden and the WOBA companies have agreed on several changes to the social
protection provisions, the ´Social Charter, ´ of the WOBA Privatization
Agreement. Certain defined Social Charter protection provisions will be
extended by five years until April 2021. The current contractual annual
minimum repair and maintenance investments for the properties of the WOBA
companies will be raised from EUR 5.00 per square meter to EUR 7.56 per
square meter (net). The City´s occupation rights will also be raised by
2,000 to 10,000.

In addition, the City of Dresden will receive nine annual payments for the
period between 2012 and 2020 in the amount of EUR 4 million per year (a