Description

WECITY complies with the provisions of Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European providers of equity finance services for companies and Title V of Law 5/2015 on the promotion of business financing as amended by Law 18/2022 of 28 September on the creation and growth of companies. It is authorized by the CNMV as a Participatory Financing Service Provider, registered under number 9, with a favorable proposal from the Bank of Spain.

Investor, before making your investment, please read the basic information for the investor client, as well as the pre-contractual cooling-off period for inexperienced investors.

Skin in the game: “In compliance with Article 8.2 of Regulation (EU) 2020/1503 of the European Parliament and of the Council of October 7, 2020 on European providers of equity financing, we hereby inform you that partners, managers and employees of wecity may invest in this opportunity. These investments will be made on the same terms as those of other investors without receiving preferential treatment or privileged access to information.”

The investment

The developer Sencelles Real Estate SL, which is a company managed by Numa Management, requests financing through wecity to finance the expenses for part of the acquisition of a commercial company, owner of an asset with a tourist and hotel operating license, and the cancellation of a bank mortgage in the amount of €444,242.37.

The asset is a 16-room hotel in Sencelles, Mallorca, which is intended to be completely refurbished and expanded to 6 additional rooms. The plot has an adopted area of 2,202.31 m2 and is situated in a privileged location in the heart of the island of Mallorca.

The project will be financed through a fixed-rate loan in the amount of €2,700,000, which will be secured by a pledge of the shares of the company that owns the asset. This loan will be the first phase of a total loan, which may amount to a maximum of €3,500,000 in two phases, the second phase being up to €800,000 to finance the refurbishment of the hotel.

To date, the developer has contributed equity of €922,500, which has been used to pay the down payment of the company owning the asset, and will contribute an additional €1,758,180 at the time of the purchase, for a total of €2,680,680 (49.82%) of contributions from the developer.

The repayment of the loan to wecity’s investors will occur with the sale of the hotel.

Through wecity you can participate in a fixed-rate loan operation with an annual interest rate of 13% for an estimated term of 10 months (6 months mandatory) with the possibility of extending for an additional 6 months at .

The payment of interest + the return of the invested capital will be made at maturity.

The project

Location and surroundings

This plot is located in Sencelles, Balearic Islands, a quiet rural setting, typical of the heart of Mallorca. This municipality is known for its authenticity and natural landscapes, making it an ideal retreat for those seeking disconnection and privacy.

Strategically located less than 30 kilometers from Palma, it combines the serenity of the countryside with reasonable access to the capital and its services. The area stands out for its traditional character, being especially attractive for families, investors and nature lovers.

Sencelles offers a perfect setting for residential or rural tourism projects, in line with the growing interest in rustic estates and sustainable properties. In addition, its rich landscape and proximity to picturesque villages make this location a unique option with great projection in the real estate market.

Warranty and appraisal

In this transaction, the collateral for the loan to be granted by the Investors consists of the pledge of the shares of the company owning the asset.

This warranty involves the following aspects:

1. Enforcement of the pledge: in the event of non-payment by the Developer on the due date (or other default in relation to the loan), the Collateral Agent may enforce the pledge, either by judicial means, as regulated in the Civil Procedure Law, or by extrajudicial means, proceeding to the sale of the pledge at public auction before a Notary Public.
2. Political rights during the term of the loan: Simultaneously with the purchase and sale of the shares, the bylaws of the Target Company will be amended to allow the Collateral Agent to exercise the political rights for certain resolutions of the General Meeting related to the Assets.
3. Political rights in the event of default on the loan: In the event of default on the loan agreement, the Collateral Agent may exercise all political rights relating to the shares.

According to the appraisal report made by GESVALT, the current appraisal amounts to €5,012,017.10. The asset is owned by the company to be acquired, and the loan to be made to the developer is €3,500,000, so the Loan to Value (LTV) on the pledge of the company’s shares is 69.83%.

The company

1. Name of the company to be acquired: Pedro Ramonell Colom, S.L.
2. TAX ID: B07791734
3. Current number of members: Sole member.
4. % of shares to be pledged: 100%.
5. Details: It has a debt of 444,242.37 € with a bank that will be cancelled at the time of signing.

Collateral agent

The constitution, conservation, management, administration and, if applicable, execution of the real estate mortgage rights on behalf of wecity investors will be carried out by an entity external to wecity.

In this case, the appointed Collateral Agent shall be the Collateral Agent of the key information sheet.

Rating

wecity, as a provider of equity financing services and in compliance with Delegated Regulation (EU) 2024/358 supplementing Regulation (EU) 2020/1503 of the European Parliament and of the Council, provides a description of the credit rating method
of the projects used to calculate the ratings. If the calculation is based on accounts that have not been audited, this shall be clearly stated in the description of the method.

Monitoring

The promoter must justify the use of the funds in each of the applications. The use of the funds by the promoter will be monitored by a company external to wecity.

Compliance with Regulation (EU) 2020/1503 🇪🇺

Risk warning

Investing in this crowdfunding project involves risks, including the risk of partial or total loss of the money invested. Your investment is not covered by deposit guarantee schemes established in accordance with Directive 2014/49/EU of the European Parliament and of the Council (*). Your investment is not covered by investor compensation schemes established in accordance with Directive 97/9/EC of the European Parliament and of the Council (**). You may not get any return on your investment. It is not a savings product and it is recommended not to invest more than 10% of your net worth in equity financing projects. You may not be able to assign the investment instruments when you wish. Even if you are able to sell them, you may suffer losses.

Pre-contractual cooling-off period for inexperienced investors

Inexperienced investors have a cooling-off period of four (4) days during which they may, at any time, revoke or desist, at any time, from their investment offer or expression of interest in the equity financing offer without having to justify their decision and without incurring a penalty. The cooling-off period begins at the time the potential non-experienced investor makes an investment offer or expresses interest and expires four calendar days after that date. To exercise their revocation rights, Investors may send an e-mail to the following address: reclamaciones@wecity.io, filling in the “subject” field of such e-mail as follows: “REVOCATION – Opportunity Name – Investor’s first and last name”. In the event that you have made a monetary contribution in connection with the financing offer, such amount will be returned as soon as possible to the wallet that you, as an investor/user of the “WECITY” Platform, have open in the “LEMONWAY” Payment Institution.

Credit risk

Credit risk is defined as the loss that may occur in the event of default by the counterparty in a financial transaction. In this specific case, the risk that the Promoter does not pay the principal and/or interest on the Loan.

Sector risk Risks inherent to the specific sector.

Such risks may be caused, for example, by a change in macroeconomic circumstances, a reduction in demand in the sector in which the equity financing project operates and dependencies in other sectors. In any case, the investor should be aware that adverse economic conditions or cyclical changes may lead to a weakening of the Promoter’s ability to meet its financial commitments in connection with the loan.

Risk of noncompliance

The risk that the project promoter may be subject to bankruptcy proceedings and other events affecting the project or the project promoter that result in the loss of the investment for the investors. Such risks may be caused by a variety of factors, including, without limitation: (serious) change in macroeconomic circumstances, mismanagement, lack of experience, fraud, financing not matching the corporate purpose, failure to launch the product or lack of liquidity. In the event of insolvency of the Promoter, the holders of the credits will be considered as credits with special privilege, as they are secured by a mortgage guarantee, in accordance with the cataloguing and order of priority of credits established by Royal Legislative Decree 1/2020, of May 5, which approves the revised text of the Insolvency Law (hereinafter, the “Insolvency Law”), except for those amounts that pursuant to Article 272 of the Insolvency Law must be classified either as ordinary credit or as subordinated credit, as appropriate.

Risk of underperformance or delayed performance

The risk that the return will be lower than expected or that the project will default on principal or interest payments.

Investment illiquidity risk

The risk that investors may not be able to sell their investment. There is no active trading market for the loan, so the investor may not be able to find a third party to whom to assign the loan.

Other risks

Risks that are, among others, beyond the control of the project developer, such as political or regulatory risks.