Conclusion of a significant agreement with a subsidiary - the loan

Current report no : 39/2013
Report date : 12/19/2013
Abbreviated name : Ciech SA
Subject : Conclusion of a significant agreement with a subsidiary - the loan
Legal basis : Art. 56 sec. 1 point 2 of the Act on Offering – current and periodic information 

Report : 

 

CIECH S.A. (hereinafter also referred to as “the Issuer" or “the Company") announces that today (i.e. 19th December 2013) it concluded a loan agreement (“the Loan Agreement”) with its subsidiary - KWG-Kraftwerksgesellschaft Staßfurt mbH, with a registered office in Staßfurt (“KWG”), whereby the Issuer undertook to grant to KWG a loan of EUR 50,500,000.00 (fifty million five hundred thousand euros) (“the Loan").

The amount of the Loan, according to the average exchange rate announced by the National Bank of Poland as of 19th December 2013 (4.1700), constitutes the equivalent of the amount of PLN 210,585,000.00 (two hundred ten million five hundred eighty-five thousand).

According to the Loan Agreement, the Loan:

• is granted for a period to 31st August 2018, with a possibility of its prepayment, in part or in full, at any time by KWG;
• bears interest at a fixed interest rate, determined on market terms;
• will be repaid in monthly instalments;
• will be disbursed in one instalment on 30th December 2013

KWG will use the proceeds from the Loan to pay the purchase price for a power plant and associated rights (the "Power Plant") from VASA Kraftwerke-Pool GmbH & Co. KG, with a registered office in Staßfurt (“VASA”), as notified by the Issuer in current report No. 38/2013 of 17th December 2013 (the “Transaction”).

The Issuer may terminate the Loan Agreement and declare all amounts outstanding to be immediately payable in the event of, inter alia:

• failure by KWG to pay any amounts due and payable under the Loan Agreement;
• change of control in relation to KWG (in this subsection, change of control means a change of the dominant company (spółka dominująca) of KWG, as defined in the Polish Commercial Companies Code, pursuant to Art. 4 § 1 subparagraph 4).

The Loan will be secured on the assets forming an object of the Transaction, in the form of a security transfer of movable assets of the Power Plant, according to the Security Transfer Agreement concluded between the Issuer and KWG.

The agreement is not concluded subject to any condition or term and does not include contractual penalty clauses or conditions different from those commonly used in this type of contracts.

KWG is a subsidiary of SWS (100% stake), which is a subsidiary of Sodawerk Holding Staßfurt GmbH (100% stake, including 82.3% stake directly, and 17.7% stake indirectly) (“SHS”), and SHS is a subsidiary of Soda Deutschland Ciech GmbH, with a registered office in Staßfurt (100% stake), which is the Issuer's subsidiary (100% stake), and therefore the Issuer indirectly holds 100% stake in the share capital of KWG.

The criterion for considering the agreement to be significant: § 2 section 1 point 44 letter a) of the Regulation of the Minister of Finance of 19 February 2009 regarding current and periodic information (...) - the subject of each of the aforementioned agreements has a value of at least 10% of the equity capital of the Issuer.

Legal basis: Article 56 section 1 point 2 of the Law of 29 July 2005 on Public Offering and […] on Public Companies, and § 5 section 1 point 3 and § 9 with reference to § 2 section 1 point 44) of the Regulation of the Minister of Finance of 19 February 2009 regarding current and periodic information […].

Type of occurrence: § 5 section 1 point 3 of the Regulation of the Minister of Finance of 19 February 2009 regarding current and periodic information […] - conclusion of a significant agreement.

Signatures of the Company’s Representatives : Dariusz Krawczyk – President of the Management Board

 

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