Current reports
Current report no. 22/2023
Disclosure of delayed inside information regarding the conclusion of a general contracting agreement and a service agreement regarding the construction of a 600 MW class CCGT unit at Adamów power plant
Legal basis:
Art. 17 sec. 4 MAR – notice of delayed disclosure of inside information
Contents of the report:
Acting pursuant to art. 17 sec. 1 and 4 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of April 16, 2014 („MAR”) ZE PAK SA seated in Konin („Company”) provides the following Inside Information regarding the conclusion of an agreement between the Company's subsidiary - PAK CCGT sp. z o.o. and Consortium consisting of: Siemens Energy Global GmbH&Co. KG based in Germany (Consortium Leader), Siemens Energy sp. z o.o. based in Warsaw and Mytilineos S.A. with its registered office in Greece, as the General Contractor of the service in the field of "Construction of a 600 MWe class CCGT unit with associated infrastructure at Adamów power plant" ("EPC Agreement") and conclusion of a long-term LTSA service agreement for the 600 MWe class CCGT unit ("LTSA Agreement") concluded with Siemens Energy sp. z o. o. for a period of 12 years from the date of commissioning of the CCGT unit.
The disclosure of the Inside Information was delayed on September 1st, 2023 pursuant to art. 17 sec. 4 of MAR
Contents of the delayed Inside Information:
The Management Board of ZE PAK SA informs that on September 1, 2023, it received information about the signing of an agreement by the Company's subsidiary - PAK CCGT sp. z o.o. with the Consortium of Siemens Energy Global GmbH&Co. KG based in Germany (Consortium Leader), Siemens Energy sp. z o.o. based in Warsaw and Mytilineos S.A. based in Greece (together the "General Contractor") for the "Construction of a 600 MWe class CCGT unit with associated infrastructure at Adamów power plant" ("EPC Agreement"), ("Project") for an estimated amount of approx. PLN 2.3 billion , and a long-term LTSA service agreement for the 600 Mwe class CCGT unit ("LTSA Agreement") concluded with Siemens Energy sp. z o. o. for a period of 12 years from the date of commissioning of the CCGT unit.
Signing the EPC Agreement and the LTSA Agreement does not result in financial obligations on the part of PAK CCGT sp. z o.o. Financial liabilities of PAK CCGT sp. z o.o. will arise only when PAK CCGT issues an Order to Commence Work ("Notice to Proceed", NTP), effective only when it is submitted together with the Guarantee for payment of liabilities of PAK CCGT sp. z o.o. arising from the EPC Agreement issued by ZE PAK SA to the General Contractor and the provision of a valid Construction Permit to the General Contractor. As a consequence, the General Contractor's issuance of the Advance Payment Guarantee and Contract Performance Bond to PAK CCGT sp. z o.o. implies the need for PAK CCGT sp. z o.o. to pay an advance payment of 20% of the gross price of the EPC Agreement to the General Contractor. Only when the advance payment is paid by PAK CCGT sp. z o. o. will the EPC Agreement formally enter into force and the key dates of the Agreement Implementation Schedule will become binding for both parties. Issuance of NTP by PAK CCGT sp. z o. o. must be made no later than November 30, 2023, otherwise the EPC and LTSA Agreement will be invalidated without financial consequences for both parties.
Rationale for delayed disclosure of the Inside Information:
In the opinion of the Management Board of the Company, the delay in the disclosure of the above Inside Information, at the time the decision on delay was taken, met the conditions set out in MAR and in the guidelines of the European Securities and Markets Authority regarding the delay in disclosure of inside information of October 20, 2016.
At the stage of signing the above-described agreements, it was not yet certain whether they would actually enter into force, i.e. whether the "Notice to Proceed" procedure would be launched, in particular due to the fact that at the time of signing the EPC Agreement and the LTSA Agreement, the Company did not yet have building permits. Therefore, it was not certain whether the subject of the agreements would actually be implemented.
In the opinion of the Company's Management Board, in the described circumstances, immediate disclosure of information about the signing of contracts, constituting a stage of the extended process aimed at initiating the implementation of the project, creates a risk of violating the legally justified interests of the Company and its capital group through a possible negative impact on the course and result of this process, through creating the impression of inevitability of subsequent steps related to the entry into force of the agreements.
In particular, the disclosure of information about the signing of contracts regarding the Project may affect the Company's share price before the final decision of the Company's Management Board and relevant authorities regarding the implementation of the project, which may negatively impact the Company's ability to achieve its business and financial goals. In particular, the situation may have a significant impact on exchange rate volatility when, despite signing contracts, final decisions regarding the implementation of the project result in the contracts having no real consequences for both parties.
In the opinion of the Company's Management Board, there were no indications that the delay in disclosing Inside Information may mislead the public and investors as to the probability of implementation and the conditions of the project and result in an incorrect assessment of this information and its potential impact on the Company's value, in particular due to the lack of significant consequences in the event of abandoning subsequent steps in the form of the "Notice to Proceed" procedure. Only when the final decision is made will the project be implemented in accordance with the signed Agreements. The company has never previously informed about taking any actions related to the commencement of the investment. Therefore, there were no grounds to conclude that the Inside Information that the Company delayed contrasted with market expectations based on the communication conducted so far by the Company.
Pursuant to art. 17 sec. 4, third paragraph of MAR, immediately after the delayed inside information is disclosed to the public, the Company will inform the Polish Financial Supervision Authority of the delay in disclosure of inside information along with an indication of the fulfilment of the conditions for such delay, in accordance with Art. 4 (3) of the Commission Implementing Regulation (EU) 2016/1055 of 29 June 2016 laying down implementing technical standards with regard to technical conditions for the proper disclosure of inside information to the public and delaying the disclosure of inside information to the public in accordance with the Regulation of the European Parliament and Council (EU) No. 596/2014.
Signatures of persons representing the Company:
Piotr Woźny – President of the Management Board
Maciej Nietopiel – Vice President of the Management Board
Andrzej Janiszowski – Vice President of the Management Board