17 January 2025

Worsley Investors Limited

(the "Company" or together with its subsidiaries the "Group")

Curno Lease Update

Background

The Group's Italian multiplex cinema complex, located in Curno, near Bergamo, is let in its entirety to UCI Italia S.p.A. ("UCI"). Base rental in calendar 2024 was €1,063,436 per annum, and the level is indexed annually to 100% of the Italian ISTAT Consumer Index on an upwards-only basis. The lease benefits from a rental guarantee provided by a U.K. domiciled European holding company for the Odeon cinema group, United Cinemas International Acquisitions Limited. UCI has the unilateral right to terminate the lease as of 30 June 2035.

Recent discussions

It was reported in the Group's Half Year Report to 30 September 2024, released on 12 December, that UCI had again signalled a desire to re-cast materially the terms of the cinema lease in its favour, notwithstanding the many concessions and accommodations which the Group has extended to it over the past five years, including the current terms which UCI had freely entered into as recently as June 2020.

The Group is in dispute with UCI as to whether or not, in the aftermath of the Covid-19 pandemic, it has an extraordinary right to terminate the lease agreement before the end of its initial term. The parties' positions on this matter are entirely divergent, with UCI asserting that it has the right to vacate the premises in January 2025, ceasing payment of the rent. The Group's position, as confirmed by its Italian legal advisers, is that UCI has no legal basis to proceed in this manner.

Despite assurances that it would put forward proposals with a view to resolving the dispute commercially, UCI has proffered no credible basis for a settlement. Shortly before Christmas, the parties reached provisional agreement on a level of rental payment under which, without prejudice to the legal dispute, UCI could in 2025 operate the multiplex on a profitable day-to-day basis. The Group then proposed to UCI an arrangement, incorporating such rental terms, by which UCI could remain in situ until at least 30 September 2025. The arrangement would have delivered material benefits for both parties.

However, notwithstanding this, UCI has responded that it was not prepared to enter such into an arrangement unless the Company's Italian subsidiary, Multiplex 1 S.a.r.l., accepted UCI's withdrawal from the lease without compensation, and has informed the Group that it will vacate the property on 30 January 2025.

The Group's directors have therefore concluded that negotiations with UCI are now at an end.

Way forward

The Group is carefully considering all available alternatives in order to assess how best to ensure that the value of the Group's investment in the cinema is preserved.

In the meantime, the Group's portfolio continues to perform well, it does not carry any debt, and it retains strong liquidity, which is well in excess of its working capital requirements.

Further announcements will be made in due course as required.

END

For further information, please contact:

Worsley Associates LLP (Investment Advisor)

Blake Nixon
Tel:       +44 (0) 203 873 2288

Shore Capital (Financial Adviser and Broker)

Anita Ghanekar / Harry Davies-Bell
Tel:       +44 (0) 20 74080 4090

Sanne Fund Services (Guernsey) Limited (Administrator and Secretary)

Chris Bougourd / Matt Falla

Tel:       +44 (0) 20 3530 3109

LEI: 213800AF85VEZMDMF931