Pursuant to the Rules and Regulations of the Ljubljana Stock Exchange, d.d, and the relevant legislation, the company Poslovni sistem Mercator, d.d., Ljubljana, hereby announces the following:

Mercator will not assume any liabilities from Konzum BH; it will, however, provide a broad, market-adjusted offer that also includes local suppliers.

At today's session, the board of Agrokor creditors approved the proposal and thus adopted the formal basis for Mercator's re-entry into the market of Bosnia and Herzegovina. Transfer of possession and establishment of retail operations in 83 stores will take place gradually. In any case, Mercator will offer its customers a broad assortment of products adjusted as much as possible to the specifics of the market. At the same time, the board of creditors adopted commitments on Konzum's restructuring in BiH where it would manage 156 of its stores in the future. Konzum BH restructuring does not include any transfer of liabilities to Mercator.

Based on the agreement, 83 stores will be returned to Mercator's operations. Re-entry is based on positive experience from the period when Mercator managed its stores in Bosnia and Herzegovina. Integration after Mercator's acquisition has resulted in a drop of revenue and had a direct negative impact on business efficiency of retail in this market.

Mercator has recently developed several scenarios for trade operations development, not only in Bosnia and Herzegovina. The concept adopted today means that Mercator will not assume any Konzum's liabilities in BiH. Mercator will acquire the equipment and inventory in its stores, based on arm's length principle, i.e. at market price, and thus mostly resolve its challenges regarding the existing receivables from Konzum BH. Mercator has been intensively developing this project in the recent period, as it has to settle its relations with the suppliers and employees, and organize logistics and a number of other activities that are the basis for Mercator's business success. Mercator's entry into the new market also means a business opportunity for Slovenian suppliers whose brands are perceived as being of high quality in the Federation and Republika Srpska. Mercator does not expect any problems in cooperation with the local and regional suppliers, also because the board of Agrokor creditors adopted commitments that include a capital increase and liquidity of Konzum BH.

Transfer of possession and establishment of retail activity in the Federation and Republika Srpska will take place gradually. Mercator's goal is not to merely re-brand the stores, but to offer the local consumers a new store concept as developed by Mercator, and especially a broad assortment tailored as closely as possible to the needs and desires of the customers. According to all surveys, Mercator is still a recognized brand in Bosnia and Herzegovina, which is one of the preconditions for the satisfaction of customers, suppliers, and employees.

As of August 31, 2017, this announcement will also be posted on the company website at www.mercatorgroup.si where it shall remain available for a period of no less than 5 years.