Current report no : 74/2014
Report date : 12/22/2014
Abbreviated name : Ciech SA
Subject : Conclusion of a significant agreement by a subsidiary of CIECH S.A.
Legal basis : § 5 section 1 point 3 of the Regulation of the Minister of Finance of 19 February 2009 on current and periodic information – conclusion of a significant agreement.
Report :
The Management Board of CIECH S.A. ("the Issuer") announces that on 22 December 2014, the subsidiary of the Issuer - Vitrosilicon Spółka Akcyjna, with a registered office in Iłowa ("the Subsidiary") concluded an agreement for supply of sodium silicate ("the Agreement") with SOLVAY ADVANCED SILICAS POLAND Sp. z o.o. with a registered office in Gorzów Wielkopolski ("Solvay").
The object of the Agreement is supply by the Subsidiary of sodium silicate ("the Product") to the Solvay factory in Włocławek, subject to DAP terms, according to Incoterms 2010, not later than from the middle of January 2016.
The Agreement was concluded for a specified period of time, until 31 December 2025, with a possibility of its subsequent extension.
The estimate value of the Agreement, according to the applied price formula and prices of raw materials necessary for the manufacture of Products - throughout the term thereof - amounts to approx. PLN 550,000,000.
The Agreement contains a condition precedent – the Agreement shall be terminated in the event that Solvay, by 30 June 2015 does not obtain the required administrative decision, connected with the operation of its plant in Włocławek. If the Subsidiary does not obtain all the necessary administrative decisions for the extension of its own production line at the plant in Żary – Kunice by 30 June 2015, the Subsidiary shall be entitled to terminate the Agreement with an effect on 31 December 2016.
The remuneration due to the Subsidiary for delivery of the Product is specified by the price formula, based on the prices of raw materials necessary in the process of its production. The Agreement stipulates a formula of guarantee fines reserved for the Subsidiary in the event of collection by Solvay of the minimum quantity of the Product, as specified in the Agreement.
Pursuant to the Agreement, liability of the Subsidiary for failure to perform or undue performance of the Agreement is limited to the amount constituting the equivalent of monthly supply of the Product.
The other terms and conditions of the Agreement do not differ from the terms and conditions commonly applied in transactions covered by this type of agreements.
The criterion for considering the Agreement to be a significant agreement: § 2 section 1 point 44 letter a) of the Regulation of the Minister of Finance of 19 February 2009 on current and periodic information (…) – the value of the Agreement is with at least 10% of the equity capital of the Issuer. Legal basis: Art. 56 section 1 point 2 of the Act of 29 July 2005 on Public Offering (…) and Public Companies, and § 5 section 1 point 3 and § 9, with reference to § 2 section 1 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 on current and periodic information – conclusion of a significant agreement.
Signatures of the Company’s Representatives : Dariusz Krawczyk – President of the Management Board
