Scully Royalty Provides Company Update

Upon closing of this transaction, and subject to regulatory approvals, it is intended to merge Sparkasse Bank and Merkanti Bank, to form a larger independent institution with projected pro forma combined equity based on December 31, 2021 numbers around 60 million eurostotal assets of €1.1 billionassets under the custody of 8.1 billion euros and the income of 17 million euros.

Sir. Paul Mifsud, CEO and Managing Director of Sparkasse Bank Malta, will become the Chairman and Managing Director of the merged bank. and director of Merkanti Holding plc at closing.

This transaction will provide Merkanti with a broader scale, operational reach and service offering to pursue its strategy as a stand-alone merchant banking institution, reinforcing Scully’s previously announced strategy of focusing on its royalty interests. on iron ore while seeking to rationalize its industrial and corporate banking activities. assets.

Description of Sparkasse Bank:

Sparkasse Bank is a limited company registered in Malta. Sparkasse Bank is authorized by the Malta Financial Services Authority to carry on banking business in accordance with the Banking Act (Malta), to provide investment services and custody and custody services in accordance with the Investment Services Act (Malta), and is authorized to act as trustee of pension schemes within the meaning of the Pensions Act (Malta).

Founded in 2000, Sparkasse Bank is one of the leading providers of custody and deposit services in Europeoperating under four licenses:

  • Credit institution license
    • Corporate and private bank accounts, term deposits, online banking
    • Payment services: SEPA, SWIFT and TARGET connectivity
  • Investment firm license
    • Execution and receipt of transmission of orders
    • Asset Settlement, Custody and Management
    • Investment advice and non-advisory services
    • Currency exchange
  • Custodian License
    • Custodian Services for Alternative Investment Funds (“AIF”) and Undertakings for Collective Investment in Transferable Securities (“UCITS”)
  • Registered Custodian License
    • Custody services for pension schemes under the Superannuation Act (Malta) (Chapter 514 of the Laws of Malta)

In addition, Sparkasse Bank has a branch in Dublin, Irelandwhich provides depositary services to undertakings for collective investment and is authorized by the Central Bank of Ireland act as depositary of Irish authorized investment funds.

Sparkasse Bank key figures:

Total assets
(2021)

Total equity
(2021)

Assets under
Keep

Tier 1 capital
Report (2021)

2021 before taxes
Income

Employees

EUR1.0
billion

€48.3
million

8.1 euros
billion

26.7%

€4.1
million

90 Full Time,
6 administrators

Additional information about Sparkasse Bank, including financial statements, can be found at www.sparkasse-bank-malta.com. Historical financial information regarding Sparkasse Bank is provided for illustrative purposes only and is not necessarily indicative of future results.

transaction details

Merkanti acquires Sparkasse Holdings from Anteilsverwaltungssparkasse Schwaz and the total consideration is approximately equal to the net tangible asset value of Sparkasse Holdings, less certain adjustments, and includes (i) a cash payment upon closing of the transaction, (ii ) three consecutive annual payments of 2.5 million euros; and (iii) a contingent payment, payable only upon recovery (if any) of an asset of Sparkasse Bank which has previously been written off in full. The consideration is expected to be satisfied with cash and liquid assets available within the Company’s group.

The transaction is subject to the satisfaction of certain customary conditions precedent such as regulatory approval from various regulators, including the European Central Bank, the Malta Financial Services Authority and the Central Bank of Ireland. The acquisition is currently expected to close in the second half of calendar year 2022.

Dividend policy

In April 2021, the Company announced that it is determined to focus its efforts on improving shareholder value and maximizing profits and dividends for its shareholders based on its participation in iron ore royalties. Consistent with this direction, the Company announced that its Board of Directors has approved a cash dividend policy designed to maximize potential future dividends payable to common shareholders. considering the Company’s financial condition, results of operations, ongoing working capital requirements and other factors.

In February 2022the Company declared its first dividend of CA$0.25 ($0.18) per share, which was paid on March 4, 2022.

The acquisition of Sparkasse Bank is not expected to impact the Company’s future iron ore royalty based cash dividends. To the extent that Merkanti’s operations achieve a larger scale to operate as a stand-alone entity, it is currently expected that this transaction will improve the ability to fund cash distributions to Scully shareholders over time.

Management statement

“We are delighted to expand Merkanti’s presence in Malta with the acquisition of Sparkasse Bank Malta,” said Samuel MorroCEO of Scully Royalty Ltd. “With the additional scale and operational reach provided by this transaction, our plans to streamline our merchant banking segment are gaining momentum, consistent with our corporate objective of maximizing cash distributions to shareholders. depending on our iron ore. copyright.”

About Scully Royalty Ltd.

Scully Royalty Ltd. is a New York Stock Exchange-listed company (ticker: SRL) whose principal asset is a 7% net revenue royalty from the Scully iron ore mine in Newfoundland & Labrador, Canada.

Scully Royalty Ltd. Communications with stakeholders

The management of Scully Royalty Ltd. welcomes all of your questions and looks forward to discussing this transaction with stakeholders. Further away:

  • stakeholders are encouraged to read our full half-year report, which includes our unaudited financial statements and management’s report, for the six-month period ended June 30, 2021, for a better understanding of our business and operations; and
  • direct any questions regarding the information in this press release to our North American toll-free line at 1 (844) 331 3343 or by email [email protected] to book a conference call with our senior management.

Forward-looking statements

This press release contains statements that are, or may be deemed to be, “forward-looking statements” that are forward-looking in nature, including expectations regarding the proposed transaction, SRL’s and Merkanti’s respective business strategies and plans and any other statement regarding beliefs, expectations or intentions regarding the future. Forward-looking statements are not based on historical facts, but rather on current expectations and projections regarding future events, and are therefore subject to risks and uncertainties that could cause actual results to differ materially. future expressed or implied by the forward-looking statements. statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking terms such as “anticipates”, “expects” or “does not expect”, “is expected”, “expected”, “estimates”, “plans”, “projects”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of these words and expressions or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be carried out. These statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, revenues, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. prospective. Important factors that could cause actual results, revenues, performance or achievements to differ materially from expectations include, among others: (i) economic and market conditions; (ii) risks inherent in litigation or transactions; (iii) any failure to satisfy the terms of the transaction, including obtaining required regulatory approval; (iv) any failure to realize the expected benefits and synergies of the proposed transaction; and (v) other factors beyond the control of SRL and Merkanti. These forward-looking statements should therefore be interpreted in light of these factors. Except in compliance with its legal or regulatory obligations, neither SRL nor Merkanti is under any obligation and they expressly disclaim any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. . Additional information about these and other assumptions, risks and uncertainties is set forth in the “Risk Factors” section of SRL’s most recent Annual Report on Form 20-F and its other public disclosure documents available under its profile at www. sec.gov.

SOURCEScully Royalty Ltd.

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