Current report no : 6/2012
Report date : 2/2/2012
Abbreviated name : Ciech SA
Subject : Complying with the conditions precedent of the tenancy agreement of the heat and power plant of 16th December 2011.
Legal basis : Art. 56 .1.2 of Public Offering Act – current and periodic information
Report :
Ciech SA (‘Issuer’) Board, informs that on 2nd February 2012 was informed by Sodawerk Staßfurt subsidiary company that on 1st February it complied with all the conditions precedent of the agreement of 16th December regarding lease of heat and power plant concluded between Sodawerk Staßfurt GmbH&Co. KG with its registered office in Staßfurt ("SWS") and KWG-Kraftwerksgesellschaft Staßfurt mbH with its registered office in Staßfurt ("KWG") and Vasa Kraftwerke-Pool GmbH&Co. KG with its registered office in Staßfurt ("VASA"), referred to in current report of Issuer No 74/2011 (‘Tenancy Agreement’).
Conditions precedent of the agreement were as follows:
a) Obtaining permission from the federal antitrust office (Bundeskartellamt) to conclude agreement covered by notarial deed (Kartellrechtsbedingung)
b) Obtaining corporate permission of VASA partners
c) Production of letters of awareness (Patronatserklärung) by CIECH S.A. regarding payments of lease installments since 2012 and VASA liabilities on account of binding agreement to supply energy for the months of November and December 2011 and agreed payment of 3 million Euro on the day of 31.03.2012 r.
d) Release of securities on contracts taken over from KWG and SWS by Unicredit Bank AG
On the basis of Tenancy Agreement the indirect subsidiary of the Issuer – KWG – shall start managing the heat and power plant on its own account which specifically regards gas purchase, electric energy sale and conducting repair policy. Proper profitability of Soda Deutschland Ciech Group shall be an expected effect of concluding the agreement. Total savings resulting from the lease, in accordance with estimates, shall improve profits on the EBITDA level by circa 15 million Euro annually (circa 62,9 million PLN based on average rate stated by National Bank of Poland on the day of the compliance with conditions precedent). Amortization shall amount to circa 5 million Euro annually (circa 21 million PLN based on average rate stated by National Bank of Poland on the day of the compliance with conditions precedent).
Lease rent amounts to Net 13 million Euro annually (circa 54,5 million PLN based on average rate stated by National Bank of Poland on the day of compliance with conditions precedent) and shall be paid in 12 equal monthly installments on the last day of each month. Circa 5 million Euro annually (circa 21 million PLN based on average rate stated by National Bank of Poland on the day of the compliance with conditions precedent) shall debit financial costs. Through the agreement a single impact on the profit of German subsidiary company of the Issuer shall be considered, connected with the updating of the book value of the heat and power plant valued at circa 5 million Euro (circa 21 million PLN based on average rate stated by National Bank of Poland on the day of the compliance with conditions precedent). In connection with the lease of the heat and power plant, renegotiation of the credit agreement had to be conducted between Soda Duatschland Ciech and Commerzbank referred to in the current report of the Issuer No 75/2011. As a result of it financial costs of German companies shall grow by circa 1 million Euro annually (circa 4,2 million annually based on average rate stated by National Bank of Poland on the day of the compliance with conditions precedent).
Signatures of the Company’s Representatives : Artur Osuchowski – Member of the Management Board
Signatures of the Company’s Representatives : Rafał Rybkowski – Member of the Management Board
