Successful completion of the bond sale

Pursuant to the provisions of the Rules of the Ljubljana Stock Exchange d.d. and the ZTVP-1 (Official Gazette of the Republic of Slovenia, No. 56/99), KD Group, d.d., Ljubljana hereby issues the following announcement:

Pursuant to the provisions of the Rules of the Ljubljana Stock Exchange d.d. and the Securities Market Act (ZTVP-1) (Official Gazette of the Republic of Slovenia, No. 56/99, as amended), KD Holding d.d., Ljubljana, hereby issues the following announcement:

The Management Board of KD Holding, financial company, d.d., Ljubljana (hereinafter: KD Holding) hereby informs the public that, in cooperation with Nova Ljubljanska banka d.d., Ljubljana (hereinafter: Nova Ljubljanska banka), which organised and managed the sale, has successfully completed the sale of the first issue of KD Holding bonds (hereinafter: the bonds).

The bonds will be issued via a private placement, as provided for in point 2 of paragraph 1 of Article 18 of the ZTVP-1. Bonds with a total nominal value of EUR 40,000,000.00 will be purchased by 19 investors on the basis of binding offers to purchase. Nova Ljubljanska banka is acting as adviser, organiser and underwriter for the bond issue.

The purpose of the bond issue is to refinance all of KD Holding’s existing loan obligations to banks, which are encumbering its assets, and to provide ongoing financing for KD Holding’s operations, including, amongst other things, the establishment of a specialised life insurance company in South-Eastern Europe (expected to operate in the markets of Croatia, Romania and Bulgaria), further expansion in the cinema sector (construction of a mixed-use commercial and residential building in Ljubljana, which will also house a multiplex with several cinema screens), the establishment of a private equity fund, which, following the disposal of those assets where KD Holding is unable to actively manage them due to insufficient ownership, is intended to serve as the vehicle for KD Holding’s investment activities, entry into the financial intermediation sector through the acquisition of up to a 33 per cent stake in Deželna banka Slovenije d.d. KD Holding also plans, by the end of 2005, to merge KD Group d.d. and KD Holding, which will result in the creation of a unified KD Group, as well as the merger of the insurance company Slovenica d.d., a subsidiary of KD Holding, and the insurance company Adriatic d.d., which is 51 per cent owned by Slovenica d.d.

The bonds, which mature in 2015, carry a fixed interest rate of 5.45 per cent and were sold at 100.76 per cent of their nominal value, representing a yield to maturity of 5.35 per cent per annum. Payment for the bonds will be made by 10 June 2005 at the latest, after which the bonds will be registered in the central register of the Clearing and Depository Company. The issuer intends, as soon as possible after obtaining authorisation from the Securities Market Agency, to list the bonds on the organised market of the Ljubljana Stock Exchange.

From 30 May 2005 until further notice, the company will also publish this notice on its website www.kd-group.si under ‘Notices’ in the ‘Public Announcements’ section.



KD Holding d.d.
Management Board