Current Report No.: 39/2022
Date of preparation: 27.10.2022
Abbreviated name of the Issuer: CIECH S.A.
Subject: Execution of a Term Sheet with Inowrocławskie Kopalnie Soli „SOLINO" Spółka Akcyjna by the Issuer and a subsidiary of the Issuer
Legal basis: Art. 17 sec. 1 of MAR – inside information
Text of the report:
The Management Board of CIECH S.A. (the “Issuer” or “CIECH”) herewith informs that on October 27, 2022, a Term Sheet (the “Term Sheet”) was executed among the Issuer, CIECH Soda Polska S.A. (the “Subsidiary”) and Inowrocławskie Kopalnie Soli „SOLINO" Spółka Akcyjna (“Solino”) including the definition of key terms and conditions of cooperation in the sale and supply of brine to the Subsidiary and the sale of salt and water to Solino. The execution of the Term Sheet is yet another step to ensuring stable sources of brine supplies to the Subsidiary's production plants in the long term, given that the current contracts can be terminated at the end of 2025, the new terms of cooperation provide for the conclusion of a supply agreement for brine by 2035 with a volume comparable to the current supply volume.
The Term Sheet defines the conditions of cooperation forming the basis for further negotiations aimed at agreeing future contracts regulating the cooperation of the parties in the above-described scope, in particular, the prices of brine, water and salt as well as the volumes of brine and salt, and brine quality parameters.
The Parties also agreed on the scope and rules of incurring the investment costs necessary for the implementation by Solino for the delivery of full brine volumes by Solino, including the Subsidiary's participation in the investment Solino at the level of 2/3 of CAPEX expenses, which the Issuer estimates at about 232 million PLN spread evenly over time in the perspective until the end of 2026.
The Term Sheet assumes, among other things, the conclusion of:
The Term Sheet does not establish any cooperation between the Parties yet, however, it continues to be the basis for further negotiations, taking into account the basic assumptions indicated therein, without specifying the date of the conclusion of the contract.
On the part of the Issuer and the Subsidiary, the conclusion of the aforementioned contracts and agreements will be conditional, among others, on obtaining the required corporate approvals.
The transaction on the conditions agreed in the Term Sheet will positively affect the financial situation of the Issuer's group, of which the Issuer will advise in the report concerning the conclusion of negotiated contracts.
As a result of the analysis, the Issuer decided it was reasonable to classify the aforementioned information as inside information within the meaning of Article 17.1 of the MAR, subject to publication in the form of this report.
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).
Signatures of persons representing the Company:
Dawid Jakubowicz – President of the Management Board
Jarosław Romanowski – Member of the Management Board
