On December 20th 2013 Grupa LOTOS S.A. executed a contract with Polskie Górnictwo Naftowe i Gazownictwo Spółka Akcyjna of Warsaw, for the supply of crude oil to Grupa LOTOS (the “Contract”).
The Contract, covering supplies from 2015 to 2019, was concluded with a renewal option for an indefinite period. The estimated value of the Contract as at its date is approximately PLN 3.2bn.
Contractual penalties will only be applicable for the first three months from the Contract's effective date, and amount to 80% of the gross value of crude that PGNiG fails to deliver, or that Grupa LOTOS fails to collect, in a given month. The maximum value of contractual penalties in this period is estimated at approximately PLN 156m.
Payment of a penalty precludes the other party’s right to seek damages. The terms and conditions of the Contract do not differ from the terms and conditions commonly applied in contracts of this kind.
The Contract is classified as significant as its estimated value exceeds 10% of Grupa LOTOS S.A.’s equity.
The legal basis for the publication of this Current Report is Par. 5.1.3 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated February 19th 2009.