Current report no : 10/2015
Report date : 5/13/2015
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 13 May 2015, CIECH Soda Polska Spółka Akcyjna, with a registered office in Inowrocław ("the Subsidiary") concluded a power coal sale agreement ("the Agreement") with Kompania Węglowa S.A., with a registered office in Katowice ("KW").
The object of the Agreement is sale by KW to the Subsidiary of power coal ("Product") subject to the terms of FCA KW mine stations, according to Incoterms 2010.
The Agreement was concluded for an unlimited period of time, but the commercial terms and conditions, including the volume of the purchased Product were specified only for 2015. For each subsequent year of the term of the Agreement, the Parties shall agree, by 30 November each year, the commercial terms and conditions and the volume of the purchased Product for the following year of the term of the Agreement. In the event that the Parties are unable to reach an agreement regarding the commercial terms and conditions and the volume of the Product for the following year of the term of the Agreement, the Agreement shall be terminated on 31 December (terminating condition).
The estimate value of the Agreement, according to the applied price formula and the current prices of the Product in the period of 5 years shall amount to approx. PLN 340,000,000.
The remuneration due to KW in exchange for the sale of the Product has been specified in the price formula, based on the power properties of the delivered coal.
The Agreement stipulates a 10% contractual penalty reserved for the Subsidiary and KW in the event of, respectively, failure to deliver or collect the minimum quantity of the Product, as specified in the Agreement, decreased by the allowed 15% limit of discrepancy. Each Party may apply general rules to pursue supplementary compensation exceeding the reserved contractual penalties stipulated in the Agreement, if such contractual penalties do not cover the damages incurred.
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 b) 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 value of revenues from sale of the capital group of the Issuer for a period of the last four financial quarters.
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 : Artur Osuchowski - Member of the Management Board, Maciej Tybura - Member of the Management Board
