Current Report No.: 2/2022
Date of preparation: 23.02.2022
Abbreviated name of the Issuer: CIECH S.A.
Subject: Execution of a letter of intent to cooperate in the construction of a thermal waste treatment plant by a subsidiary of the Issuer.
Legal basis: Art. 17.1 of the MAR – inside information.
Report:
The Management Board of CIECH S.A. (the “Issuer” or “CIECH”) herewith informs that on 23 February 2022, a letter of intent was signed between the Issuer, CIECH Soda Polska S.A. (hereinafter referred to as the “Subsidiary”), Budimex S.A. (hereinafter referred to as “Budimex”), EEW Energy from Waste GmbH (hereinafter referred to as “EEW”), EEW Energy from Waste Polska sp. z o.o. (hereinafter referred to as “EEW Polska”), FBSerwis S.A. (hereinafter referred to as “FBSerwis”) and the Town of Inowrocław (hereinafter jointly referred to as the “Parties”), on their cooperation in the preparation of conditions for making a decision on the investment consisting in the construction by EEW, EEW Polska and FBSerwis, on the property owned by the Subsidiary (hereinafter referred to as the “Property”), a thermal waste treatment installation (hereinafter referred to as: the “Letter of Intent”, “Potential Investment” and “Installation”, respectively).
The purpose of the Letter of Intent is the cooperation of the Parties in the work on the assessment of profitability and feasibility, preparation of conditions for making a decision on the Potential Investment and construction of the Installation. The parties will be conducting, in good faith and an atmosphere of mutual loyalty, activities, talks, meetings, research and analyses in order to clarify all technical, financial, legal and business issues related to the implementation of the Potential Investment and the operation of the Installation.
The main objective of the Potential Investment, from the point of view of the CIECH Group, will be to supply the Subsidiary's production plant located in Inowrocław (the “Production Plant”) with thermal energy (process steam).
The Issuer assumes that the establishment of this cooperation and the receipt of thermal energy from the Installation will have a positive impact on the consolidated financial results of the CIECH Group by reducing the price of thermal energy, which is a key component in the production of soda and salt, and the target reduction of CO2 emissions by the Production Plant by approximately 300.000 tonnes per annum.
The Potential Investment will be carried out by a special purpose vehicle established by EEW and FBSerwis (hereinafter referred to as the “SPV”). Budimex agreed to support FBSerwis in this venture with its human, technical and financial resources. The Parties do not exclude participation of other entities in the SPV. The Issuer and the Subsidiary will not participate in financing the Potential Investment.
The planned commissioning of the Installation should take place in 2026, provided that the SPV has obtained the necessary decisions and permits by 2024 at the latest.
The parties assume that the Subsidiary will receive heat energy in the amount of approximately 850 GWh per year. The first deliveries of process steam to the Subsidiary's production plant should start at the beginning of 2027. The Installation will be powered by a stream of waste other than hazardous and other than inert, supplied by a company from the FBSerwis group.
The Issuer expects that the cooperation in the supply of thermal energy from the Installation will be analogous to the solutions already functioning within the CIECH Group, where a similar cooperation exists between CIECH Soda Deutschland and the heat supplier from the REMONDIS Group.
The cooperation between the Parties is in line with the Group's ESG Strategy adopted by the Issuer and available at: https://esgciech.com/ and the Group's activities aimed at:
At the same time, the Issuer, the Subsidiary, Budimex, EEW, EEW Polska and FBSerwis intend to terminate their cooperation under the letter of intent concluded on 26 March 2021, regarding the continuation of cooperation in the construction of a thermal waste treatment plant, which was to supply the Subsidiary’s Janikowo production plant with process steam (“Production Plant 2”). The Issuer and the Subsidiary are carrying out analyses of other solutions to lower the price of heat and limit CO2 emissions in Production Plant 2.
In its current report number 11/2020 of 28 February 2020, the Issuer informed about the execution of a letter of intent to establish cooperation in the construction of a thermal waste treatment plant in Inowrocław between the Subsidiary and REMONDIS Energy & Services Sp. z o.o. with its registered office in Warsaw. The letter of intent has expired due to:
Legal basis: Article 17.1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on Market Abuse (the Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of the European Union L No. 173, p. 1).
Signatures of the Company’s representatives:
Dawid Jakubowicz – President of the Management Board
Jarosław Romanowski – Member of the Management Board
