MERCATOR, d.d., Ljubljana

Public Announcement

Preliminary Sales Agreement Signed

The companies Poslovni sistem Mercator, d.d., and M Hotel, hotel and catering services, d.o.o., signed a preliminary agreement on the disposal of Bor-Grad Hrib hotel complex in Preddvor, with the private business establishment Consulting and Tourism, Tomaž Vrhunec, s.p. Based on this preliminary agreement, the said establishment has already become the proprietor of the Bor-Grad Hrib; hence, the entire Bor-Grad Hrib complex will continue its normal operation, as well as possibly expand its range of services offered. The Sales Agreement will presumably be signed in August. All employees of the Bor-Grad Hrib complex shall continue to be employed by Poslovni sistem Mercator, while any changes to their employment status shall be subject to individual negotiations with the new owner.

The public announcement will be also available on the web-site www.mercator.si.

Date: 19. 7. 2006