The Management Board of Grupa LOTOS S.A. (the “Company”) announces that on October 15, 2014 the Company concluded an agreement concerning non-public aid support with the Minister of State Treasury representing the State Treasury of Poland and acting as the manager of the Enterprises Restructuring Fund (Fundusz Restrukturyzacji Przedsiębiorców) (the “Agreement”).
The non-public aid support (the “support”) is granted on the basis of the Regulation of the Minister of State Treasury of August 11, 2011 on non-public aid support, in the form of agreement concluded between entrepreneurs seeking support and the State Treasury acting as the manager of the Enterprises Restructuring Fund established pursuant to Article 56 Section 1 item 2 of the Commercialization and Privatization Act of August 30, 1996. The support is granted on market terms for the purposes of financing investments, including new investments, or for protecting the fundamental security interests of the Republic of Poland.
The Agreement sets out the value, form and purposes of support to be granted by the Minister of State Treasury in order to provide the Company’s group with arm’s-length financing of the delayed coking unit investment project including its ancillary infrastructure (known as Project EFRA and previously as DCU Project). This project will expand existing enterprise and significantly improve the production technology of the Company’s group (the “Project”).
According to the Agreement, the Minister of State Treasury as the manager of the Enterprises Restructuring Fund will provide the Company with support in an amount up to PLN 530,000,000. The State Treasury, represented by the Minister of State Treasury, will purchase new shares of the Company by exercising its preemptive rights.
The final number of the new shares to be subscribed for by the Company’s shareholders and the price for new shares will be established by the Company in such a manner as to ensure that the State Treasury retains its interest in the Company’s share capital as well as in the total number of votes at a General Meeting at the same level (to the Company’s knowledge the State Treasury holds 69,076,392 shares representing 53.19% of the total votes in the Company).
The Company is obliged to use the support proceeds to finance the Project EFRA which aims at increasing the effectiveness of the Group’s refinery business by improving its conversion ratio. The Company is required to use the support provided in accordance with its purpose set out in the Agreement.
The Agreement imposes certain disclosure obligations on the Company to provide the Minister of State Treasury with tools to monitor and account for the support granted. These obligations include the preparation and submission of periodic reports to the Minister of State Treasury concerning the use of the support and such support’s effects. Insofar as required by law, the Company will publish the information prepared for the purposes of its disclosure obligations under the Agreement.
According to the Agreement, the Company will be required to return the received support with statutory interest only if the Minister of State Treasury concludes that: (i) the Agreement was concluded based on inaccurate data provided by the Company; (ii) the support provided to the Company is or was used for other purposes than those designated in the Agreement; or (iii) the support provided was not used for the purposes designated in the Agreement, and the Minister of State Treasury did not give its consent, in a process provided for in the Agreement, to use if for other projects. The support may be returned through a redemption of the Company shares held by the State Treasury. In such event the Company will be required to promptly take actions required by law in order to redeem such number of the Company shares owned by the State Treasury as will entitle the State Treasury to a remuneration equal to the amount of support provided plus the statutory interest referred to above. In particular, the Company will be required to cause that the necessary actions are taken in order to convene a General Meeting with an agenda including the adoption of resolutions necessary for the Company to buy-back or redeem the shares owned by the State Treasury.
The Agreement took effect as of the date of its execution and will remain in force until the Minister of State Treasury approves the Company’s final report on the use of the support which should take place in 2018.
Pursuant to § 6 Section 2 of Resolution No. 2 of the Extraordinary General Meeting of the Company of September 8, 2014 on an increase of the Company’s share capital through the issuance of new shares, a public offering of the new shares, setting the record day for the preemptive rights for the new shares on November 18, 2014, dematerialization and application for admission of preemptive rights, rights to shares and the new shares to trading on a regulated market operated by the Warsaw Stock Exchange, on amendments to the Articles of Association of the Company and on the authorization for the Supervisory Board to adopt an amended and restated version of the Company’s Articles of Association (the “Issue Resolution”), the Issue Resolution will become ineffective if the Company and the State Treasury do not conclude an agreement concerning the State Treasury’s application of proceeds from the fund referred to in Article 56 Section 1 item 2 of the Commercialization and Privatization Act of August 30, 1996 towards the payment of the issue price for the new shares before the first day of the subscription period for the new shares specified in the issue prospectus (the “Condition Subsequent”). With the Agreement executed, the Condition Subsequent can no longer materialize and, therefore, the Company can conduct the subscription for the new shares on the terms set out in the Issue Resolution. The Issue Resolution was attached to the Company’s current report No. 19/2014 of September 8, 2014.
A prospectus needs to be first drafted and approved by the Polish Financial Supervision Authority for the purpose of conducting a public offering in Poland of the new shares of the Company to be subscribed based on the preemptive rights granted to the shareholders. The Company will also apply for the admission of the preemptive rights, rights to shares and new shares to trading on the main market of Warsaw Stock Exchange.
In an announcement published on the web site of the Ministry of State Treasury on September 8, 2014 a representative of the State Treasury declared that the State Treasury would respond to this offering and subscribe new shares of the Company.
This current report is published pursuant to Article 56 Section 1 item 1 of the Act of July 29, 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies.
Not for release, publication or distribution, directly or indirectly, in or into the United States of America, Australia, Canada or Japan.
This communication is for informational and promotional purposes only and under no circumstances shall constitute an offer or invitation to make an offer, or form the basis for a decision, to invest in the securities of Grupa LOTOS S.A. (the “Company”). The prospectus which will be prepared in connection with the offering of the Company’s shares (the “Shares”) subject to pre-emptive rights (the “Prospectus”), upon its approval by the Polish Financial Supervision Authority, will be the sole legally binding document containing information about the Company and the offering of its Shares in Poland. The Prospectus will be made available in an electronic format on the website of the Company (www.lotos.pl) and, additionally, for information purposes, on the website of Powszechna Kasa Oszczędności Bank Polski S.A. Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie (www.dm.pkobp.pl).
This communication does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers Thereof dated 19 October 2005.
This communication (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States, Australia, Canada or Japan, or any other jurisdiction. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States of America, unless registered under the Securities Act or unless an exemption from the registration requirements set forth in the Securities Act applies to them. No public offering of the securities will be made in the United States of America.
Neither the Company nor any of its subsidiaries or any other related entities shall be held accountable for any damage resulting from the use of this communication or a part thereof, or its contents or in any other manner in connection with this communication