Pursuant to the provisions of the Ljubljana Stock Exchange (Ljubljanska borza d.d.) and the relevant legislation, the company Poslovni sistem Mercator d.d., Ljubljana, hereby makes the following announcement:

Mercator and Supernova have completed the sale process for ten shopping centres in Slovenia. Supernova paid the acquisition price of EUR 116.6 million, and Mercator will take on long-term lease the parts of the centres in which it is conducting its core activity. This completes the second stage of Mercator's monetization project that will continue in the future. Monetization affords Mercator the conditions for a new investment and development cycle, with the logistics and distribution centre in Ljubljana standing out as the most important investment.

With the monetization project, Mercator's management, headed by Tomislav Čizmić, set a goal to cut Mercator's debt and thus meet the prerequisites for a new investment cycle that is of key importance for Mercator's further development. The monetization project started with the divestment of the shopping centre in Belgrade in late 2017. Early last year, Mercator invited international investors and funds whose core activity is property management to take part in its call for bids; in October last year, it signed an agreement with the company Supernova on the sale of ten shopping centres.

Supernova will thus take over the shopping centres Ajdovščina, Celje, Jesenice, Koper I, Kranj Primskovo, Kranj Savski otok, Ljubljana Šiška, Postojna, Novo mesto, and Slovenj Gradec. The new owner of the shopping centres has also contractually committed to invest into their update. Mercator will lease the premises for its activities in these centres for a period of 15 years, with the option to extend the lease agreement for further 15 years under the same terms. Upon divestment of the shopping centres, Mercator namely sought to ensure a favourable rent for the premises in which Mercator stores operate within these shopping centres.

Tomislav Čizmić, President of the Management Board at Mercator Group, emphasized upon the completion of divestment of the ten centres in Slovenia: "Consistently with the long-term business plan, we shall continue to pursue the strategy laid down, which also includes meeting the commitments and covenants specified in the agreement with our creditor banks. In addition to developing new store concepts, Mercator is now focused especially on updates to its work processes, and on improving its efficiency. Monetization has allowed us to establish the conditions for the pending logistics restructuring with a new logistics and distribution centre that we are planning to construct by the end of 2021. Central supply to stores will considerably decrease the number of deliveries and kilometres clocked up, and significantly cut our logistics costs. The work of our employees in logistics and retail will be easier, and we will be even more successful in differentiation of offer and in development of modern service tailored to the customer."

Frank Albert, owner of the Supernova Group, commented: "Supernova is already renowned in Slovenia and seen as synonymous to a modern shopping centre; with the acquisition of ten new facilities, it is further consolidating its position. With this important expansion of the portfolio of its shopping centres in major Slovenian towns, Supernova is now even closer to customers, and our brand is even stronger. I believe further cooperation will bring numerous advantages to both Supernova and Mercator, and especially for the customers."

Mercator still owns 81% of the real estate in which it conducts its core activities in Slovenia, and it is operating approximately one million of square metres of gross retail area region-wide. Mercator will now proceed with the third stage of monetization.

As of February 14, 2019, 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.