ZAK-SYSTEM

PROJECT of the creation and development of the WHOLESALE TRADING CENTER „ New Stadium ”

INTRODUCTION
In the very near future the Warsaw National Stadium located bazaar „BAZAR EUROPA” will be eliminated piece by piece in order to avoid any protests of the local traders. And the large part of those local traders can use this enforced situation to change and improve their material status, and to try implement larger investment projects within own company, using own trading experiences. It’s common knowledge that certain part of mentioned foreign (mostly Asian) traders is characterized by an unregulated, unclear legal and material situation in Poland as emigrants. The proposed by us solution is giving some chance to secure such large group of foreigners in terms of their legal and economic status in Poland, and entitle them to run and develop legal business activity, as proved traders with Poland’s based and international experience.
PHASES OF THE VENTURE
1. In order to enable that group of traders coming out of the bad, enforced situation, one should find in the first step an existing business entity (limited company) with some own property, which can be multiplied, and used for the traders business purposes. Later on, one should buy out the majority of that limited company shares, in a comparatively cheap way. That company should be focused on developing trading business and should own some significant property in a form of real estate, but should be easy for quick and cheap development. Additional conditions for such company are: relatively long history in the Polish market and proved experience in international trade area. The company must have some real market records, and not making impression of a “fake company”. Within several weeks one should start increasing its turnovers with participation of new co-owners, and increase its own property, preferably in form of extended storehouses, store-squares and, brand new wholesale warehouses, and logistic, fully equipped back office administration.
2. All mentioned in step one is necessary, in order to be able quickly in step two of the venture apply for a bank loan for buying the common land for own trading center in Warsaw. This transaction should be made quickly, right after marking off the desired location, optima for running the shareholders’ band traders’ business activity, including retail.
3. In step three the partly extended preliminary property, primary capital band the newly purchased land are the assets to be used in the new detailed business plan and related feasibility study. Another condition for a bank loan is a minimal shareholders’ own capital, required by a bank in case of a loan for construction of “New Stadium” trading (wholesale and retail) center. Crucial thing in this project is the Warsaw based location of the “New Stadium” trading center, attractive both from the commercial and transportation point of view, very carefully selected and accepted location by the shareholders. At the moment we do have several differently priced and attractive locations, in different distance from the Warsaw city.
THE WAY OF CONSTRUCTING THE FINANCIAL AND PROPERTY STRUCTURE
In order to buy out the mentioned existing ltd. company with 500 new shareholders the initial capital is around 13 thousand PLN per shareholder in step one of the project. The shareholders of the company co-own property located on around 22.000 m2 land, including own office and warehouse buildings. This land can be easily adopted to the company profile and banking mortgage requirements. The final goal of this process is creating Asian trading center in the city of Warsaw.
WAYS OF GAINING MONEY FOR INVESTMENTS
Raising the money from the new shareholders having some 90 % majority of the votes, the company gets around 6. 500.000 PLN, which is the initial capital of the Project. In the next steps of investment process the money invested will be relevant to the expansion of the company and its properties, according to the business plan, and changing market evaluation of company real estate assets. The dividends, additional investment costs are, of course, proportional to the shareholding structure of the company. The shareholding structure reflects decision-making structure and other important proportions about running this company, according to the Polish commercial code.
WAYS OF DEVELOPMENT OF THE WHOLE TRADING STRUCTURE
The project of construction and expansion of the trading center in Warsaw can fill in the market niche caused by the process of elimination of the former trading facility at the former Warsaw National Stadium. The business plan of this project is based on an idea of systemic development of a company dealing with a complete trading process in case of the company clients, including international trade negotiations and contracts of goods, and wholesale / retail trading inside the center with country-wide distribution and delivery of traded goods. The trading center will be dedicated also to many local traders with the support of own storehouses and Rother trading facilities located from the beginning at the location owned by the company purchased by the traders-shareholders.
USING COMPANY SHARES FOR INDIVIDUAL PURPOSES OF THE OWNERS
The fact of becoming a foreign shareholder of a legally Polish company and participating actively in the management process brings other opportunities such as shareholders’ employment, their relatives employment and ability to implement individual business ideas under umbrella of a larger company. Most of the company potential new shareholders will be able to increase their own credibility and scale of business activity.
PROCEDURE AND PHASES OF DEVELOPMENT OF THE PROJECT
The before leveraged property of the company, including multiplied value of its real estate is the mortgage base for the project business plan. The investors capital supported by a bank loan are the main sources of financing the transaction of buying the new land for the new trading center “New Stadium”. When the primary trading center becomes operational and its Markey value starts increasing, the company can start applying for a bank loan for the “New Stadium” Center in a new Warsaw location.
WHAT CAN WE GUARANTEE TO THE PRIMARY GROUP OF NEW SHAREHOLDERS
The first new shareholders of the company will be given such designed buildings and business space inside them as they precisely need for their particular businesses. Their share in the real estate ownership will reflect the shareholding structure. The primary group of the shareholders will become decision-makers about the rules of renting the commercial space and bringing next people and companies to the company. The company by the decisions of General Meeting of Shareholders and according to its Statue will be signing long-term contracts regulating who and under what conditions will use the commercial space under particular shareholders management.
In the time of implementation of this project the company with the decision of the General Meeting of Shareholders can change its legal form from limited company to the form of joint stock company. The founding capital by such occasion is taxed with the 2 % state treasury tax.
WAY OF EXECUTION OF THE INVESTMENT PLAN
The construction of the „New Stadium” Trading Center will be based on a energy-saving, ecological technology called „System R”, which is described in one of the attachments to this information material. This system is patented by the Polish company Polgips. Building with this method is not only quicker than in classical way, but one can also apply for EU funded subsidies for ‘termo-audit’ of the constructed buildings.
ADDITIONAL POSSIBILITIES AND BENEFITS COMING FROM THE PARTICIPATION IN THE PROJECT
Co-ownership on this company can solve many legal immigration problems, such as visas, “Polish green card”, work permits, and other documents necessary for non-EU residents of Poland.
BASIC NEEDS FOR COMERCIAL SPACE IN THE TRADING CENTER
A. Assuming we have 500 primary new shareholders, and around 20 % of them (about 100 shareholders) Leeds for wholesal purposes about 80 m2, which makes together about 8000 m2 of commercial space, they will manage some 75 % of total space, which is about. 10.700 m2.
B. About 80 % of remaining shareholders needs some 20 m2 per shareholder for their retail trading purposes, which gives about 8000 m2 of commercial space, totally another 10.700 m2 of commercial buildings space.
Summarizing all we have about 21.400 m2 of total space of the buildings, which amounts for about 40 % of total surface of the building plot. These needs suggest buying a plot of about 53.500 m2. Some 60 % part of the plot May be used for other purposes like transportation facilities, or housing areas.
PRELIMINARY ANALYSIS OF NECESSARY COSTS FOR BUYING LAND
A cost of a well located plot with developed transportation and telecom infrastructure around and parameters preferred by the shareholders, one can estimate as about 1000-1500 PLN/m2. Then just the cost of a plot can be estimated as the following range: 53.500.000 - 80.000.000 PLN. A cheaper plot much further for the Warsaw city center , and without construction permissions can be purchased within the cost range of 300 to 450 PLN/m2, which gives a total transaction cost from 16.050.000 to 24.000.000 PLN.
COMPLEMENTARY AND ALTERNATIVE PROPOSITIONS OF FINANCING THE PROJECT OF THE NEW TRADING CENTER
A bank loan can be given to a existing company, but the minimal own capital share should be at least some 40 % of the investment budget. Another condition would be mortgage protection instruments using the company property. Our land primarily is the existing and operating wholesale facility with own warehouses and administration buildings, located in the village CYBULICE close to the expressway Warsaw-Gdansk. The investment bank loan in this case can be for a longer term of 5 to 10 years with the interest rate at the level of 8-9 % annually.
SUMMARY OF THE PROPERTY VALUE OF THE COMPANY AFTER IMPLEMENTATION OF THE PROJECT
The shares of the company can be subject of resale at any moment, band their value reflects the market value of the property being the subject of the investment process. After the construction investment is finished the market value of the storehouse-administrative center in CYBULICE might be (after its expansion) worth about 20 million PLN. The new trading center (21.400 m2) estimated value could be about 113 million PLN + 20 million (Cybulice center) gives altogether about 133 million PLN of value in market estimated prices.
PRELIMINARY ANALYSIS OF POTENTIAL GROWTH OF CREDIBILITY OF THE COMPANY AFTER PROJECT IMPLEMENTATION
The own cost of construction of 1 square meter of „New Stadium” trading center on a selected building plot (financed mostly from a bank loan) is about 2.500 PLN/m2 x 21.400 m2 (buildings with infrastructure) = ok. 53.500.000 PLN. This gives after implementation of the project growth of the company credibility up to about 80 million PLN. Such financial situation gives much better conditions for the shareholders-traders in terms of negotiating contracts with potential wholesale clients.
ESTIMATED SUMMARIZED VALUE OF SHARES
With 500 shareholders, the value of the real estate property per 1 shareholder having 0,2% of votes can be in our case worth some 266.796 PLN, not counting the “good will’ value, and ongoing trading contracts. The first group of shareholders pays relatively lower price for a share than any further shareholder in the future, joining the company with first group shareholders acceptance.