Current reports
Current report no. 24/2022
Decision made by ZE PAK SA on the conclusion of Annex No. 2 to the preliminary agreement for the sale of shares in PAK-Polska Czysta Energia sp. z o.o. and transfer of ownership of an organized part of Konin Power Plant enterprise to PAK-PCE Biopaliwa i Wodór sp. z o.o.
Legal basis:
Art. 17 sec. 1 MAR – inside information
Content of the report:
The Management Board of ZE PAK SA („Company”), in relation to the current report no. 31/2021 of December 20, 2021, concerning the conclusion by the Company the preliminary share purchase agreement in PAK-Polska Czysta Energia sp. z o.o. and the current report no. 11/2022 of March 30, 2022, regarding the conclusion of an annex („Annex 1”) to the preliminary share purchase agreement concerning the sale of shares of PAK-Polska Czysta Energia sp. z o.o. based in Konin („PAK-PCE”, „Transaction”), representing 67% of the share capital of PAK-PCE („PAK-PCE Shares”), which was concluded between the Company and Cyfrowy Polsat SA based in Warsaw, on December 20, 2021 („CP”, „Agreement”), hereby informs that the Company has made a decision to conclude annex 2 to the Agreement with CP („Annex 2”) and to finalize the transfer to a subsidiary of PAK-PCE i.e. PAK-PCE Biopaliwa i Wodór sp. z o.o. („PP BiW”) of the entire energy activity carried out at Konin Power Plant, consisting in particular of generating electricity from biomass, and being an organized part of the enterprise („ZCP Elektrownia Konin”).
The conclusion of Annex 2 is planned for June 29, 2022, while the transfer of ownership of ZCP Elektrownia Konin is planned for July 1, 2022.
Annex 2 will be concluded by the Company and CP („Parties”), in particular due to failure to meet one of the conditions precedent of the Agreement, related to the contribution to PAK-PCE of claims of PAK-PCE subsidiaries i.e. the companies PCE OZE 1-6 and a change in the manner and sequence of legal actions performed on the basis of the Agreement.
The parties decided, inter alia, to change the method and the moment of transfer of the ownership of ZCP Elektrownia Konin to the group of subsidiaries of PAK-PCE, which was covered by an additional obligation in the contract. The additional obligation was to be performed after the performance of the Agreement, i.e. the sale of 67% of shares in the share capital of PAK-PCE by the Company to CP. The additional obligation was to take place through the sale to CP for the price of PLN 607,355,000.00 adjusted by the amount of the working capital of ZCP Elektrownia Konin of subsequent newly created shares of PAK-PCE ("Additional Obligation") in connection with the transfer of ownership of ZCP Elektrownia Konin.
In the period from April to May 2022, a number of legal actions took place, as a result of which CP became the owner of 49% of the share capital of PP BiW and the Company became the owner of 51% of the share capital of PP BiW. The change in the ownership structure of PP BiW was accompanied by an increase in the company's capital. The funds from the capital increase were allocated to the purchase of ZCP Elektrownia Konin from the Company.
On May 16, 2022, an agreement was concluded between the Company and PP BiW, under which the ownership of ZCP Elektrownia Konin will be transferred to PP BiW ("Transfer of ZCP ownership"). The closing of the transaction is planned for July 1, 2022. The value of ZCP Elektrownia Konin was determined based on the sum of the valuation prepared by Deloitte Advisory sp. z o.o. and working capital, i.e. on the terms and level exactly the same as envisaged for the Additional Liability.
Under the Agreement amended by Annex 2, the Parties will be obliged to conclude a promised agreement, provided that: (i) the Transfer of ZCP ownership is finalized and (ii) all shares held by the Parties in the share capital of PP BiW as at June 27, 2022 are contributed as a contribution to cover the increased share capital of PAK-PCE. Annex 2 contains the obligation of the Company to cause the Transfer of ZCP ownership.
The subject of the promised agreement will be shares in PAK-PCE representing approximately 26.6% of the share capital of PAK-PCE ("Promised Agreement"). After the performance of the Promised Agreement, the Company will own approximately 33% of the share capital of PAK-PCE, CP will own the remaining 67% of the share capital of PAK-PCE, and ZCP Elektrownia Konin will be fully owned by the PAK-PCE group, in accordance with the original intention contained in the preliminary agreement of December 20, 2021.
Pursuant to Annex 2, the price for PAK-PCE Shares acquired under the Promised Agreement will be changed.
The original price specified in the Agreement will be: (i) reduced due to the failure to fulfil one of the conditions precedent provided for in the Agreement (related to the contribution of PAK-PCE's subsidiaries to PAK-PCE), (ii) reduced by the amount of any possible unauthorized outflow of the specified in the Agreement, and (iii) increased by interest accrued for the period starting from the Locked Box Date and ending on May 13, 2022, according to the average interest rate on cash deposits with banks maintaining current bank accounts of the Company for the period closest to the period indicated; and (iv) increased by the amount resulting from the execution of transactions by the Parties regarding ZCP Elektrownia Konin.
The total proceeds of the ZE PAK Capital Group in connection with the sale of 67% of the share capital of PAK-PCE and the transfer of ownership of ZCP Elektrownia Konin to PAK-PCE (in the absence of unauthorized outflows) will amount to PLN 807,624,246.00, taking into account the adjustment resulting from the working capital of ZCP Elektrownia Konin.
The Promised Agreement will be concluded by the Parties by September 30, 2022.
On June 27, 2022, the Supervisory Board of the Company granted consent to conclude Annex 2.
The transaction is a significant transaction with a related entity within the meaning of Art. 90h of the Act of July 29, 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies (Journal of Laws of 2021, item 1983, as amended).
Given that the Transaction will take place on market conditions, there will be no breach of the interests of the Company or its non-related party shareholders, including minority shareholders.
Legal basis: Art. 17 sec. 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (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:
Piotr Woźny – President of the Management Board
Maciej Nietopiel – Vice President of the Management Board
Zygmunt Artwik – Vice President of the Management Board