The Management Board of Polenergia S.A. (‘Company’ or ‘Polenergia’), acting pursuant to Art. 17 (1) of the 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 the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 2014, p. 1, as amended, hereinafter referred to as ‘MAR’), hereby notifies, with reference to Current Report No. 3 of 5th March 2018, that on 5th March 2018, having collected relevant corporate approvals on the same day, the Company entered into a preliminary conditional agreement (‘Preliminary Agreement’) for the sale of 50% of shares (‘Shares’) of each of the following Company’s subsidiaries: Polenergia Bałtyk II sp. z o.o. and Polenergia Bałtyk III sp. z o.o. (together ‘SPV’), which implement the project of construction of offshore wind farms in the Baltic Sea (‘Project’). The Preliminary Agreement was concluded with Statoil Holding Netherlands B.V. (‘Statoil Holding Netherlands’), an entity belonging to Statoil capital group (‘Statoil’).
The sale of shares of the SPV is to be carried out as part of cooperation agreed upon by the parties in terms of the joint implementation of the Project (‘Transaction’). The rules of the Project realization as well as the rights and obligations of the parties within the Project implementation are subject to other agreements to be concluded as part of the Transaction and the main elements of which were described below.
Preliminary Agreement
The Preliminary Agreement provides for the conclusion of a final agreement transferring the ownership of the Shares owned by the Company to Statoil Holding Netherlands. The conclusion of the final transferring agreement is conditional upon satisfaction of conditions precedent, including (i) obtaining by each party of an unconditional consent of the President of the Office of Competition and Consumer Protection for realization of the Transaction (described below) and (ii) obtaining by Polenergia and the SPV of a legally binding registration of resolutions on an increase of the share capital by amending the articles of association of each of the SPV that were made prior to the conclusion of the Preliminary Agreement. The total base selling price of the SPV Shares is PLN 94,275,000 and was calculated on the basis of the actual costs incurred for the Project, including the standard mechanism of correction of this amount based on the SPV financial position at the time of transfer of ownership of the Shares described in the Preliminary Agreement, increased by EUR 5,000,000 payable in installments by 30th September 2019. The parties also agreed on the additional conditional payments, depending on the completion of the specified stages or parameters of the Project.
It was established that meeting both conditions precedent should take place by 31st October 2018 (the so-called long-stop date of an agreement), and that in the case of failure to obtain the consent of the President of the Office of Competition and Consumer Protection and to complete registration for both SPV by this date, the Preliminary Agreement will be terminated. Polenergia will publish information on fulfillment or non-fulfillment of these conditions in the form of current reports.
The Preliminary Agreement includes, among others, (i) a catalogue of agreed upon by the parties statements and assurances of the Company regarding the legal title to the Shares to be sold and the legal and actual status of the Project as well as the business situation and condition of the SPV, in particular conduction of business in compliance with the applicable anti-corruption regulations and principles, and (ii) rules of liability of the parties for breach of the agreement, including the Company’s liability for the submitted statements and warranties described above. The Preliminary Agreement also provides for the rules of the SPV activity in the period between signing the Preliminary Agreement and concluding the final agreement.
The Preliminary Agreement shall be governed by the laws of Poland.
Other agreements to be concluded as part of Transaction
As part of the Transaction, Polenergia and Statoil Holding Netherlands also plan to conclude other agreements regarding determination of the rights and obligations of the parties as partners at the SPV, as well as the principles of the Project implementation. In particular, at the latest upon the finalization of the sale of the SPV Shares it is planned to conclude two shareholder agreements regarding the SPV (‘Shareholder Agreement’). The Shareholder Agreement defines the mutual rights and obligations of Polenergia and Statoil Holding Netherlands as partners at the SPV as well as the terms of their cooperation in the Transaction realization.
Moreover, it is planned that the SPV and an indicated entity of Statoil capital group (which is to provide certain services to the SPV as Project Manager) will enter into a number of agreements referring to the Project development and implementation by each of the SPV (the so-called Development and Execution Services Agreements and Operation and Maintenance Services Agreements), specifying the scope of services provided by the Project Manager, its obligations and responsibilities, the Manager’s remuneration, and the principles of involvement of subcontractors for the delivery of services. The parties agreed that Polenergia (or selected entities of Polenergia capital group) will work for the SPV in consultation with the Project Manager in terms of implementation of a specific scope of services for the purposes of the Project.
As regards the rights and obligations of the parties as partners at the SPV, the Shareholder Agreement defines, among others, (i) the rules of the SPV internal organization and business, and (ii) the principles on the disposal and acquisition of the SPV shares as well as the restrictions concerning them.
As for the rules of the Project implementation, the Shareholder Agreement formulates the main stages of development and the principles of the Project management, the rights and obligations of the parties in terms of planning, budgeting and financing of the Project, as well as the procedures of addressing the potential decision-making deadlocks in the Project.
The Shareholder Agreement shall be governed by the laws of Poland.
Option for purchase of 50% of another Polenergia subsidiary shares
Under the Shareholder Agreement, Polenergia will grant to Statoil Holding Netherlands an option for the purchase of 50% of shares of another Polenergia’s subsidiary, i.e. Polenergia Bałtyk I S.A.
Required consent of President of Office of Competition and Consumer Protection Carrying out of the Transaction, which was classified as creation of a joint venture for the Project purposes, requires obtaining by each party of an unconditional consent of the President of the Office of Competition and Consumer Protection. In the case of a conditional consent granted, the Preliminary Agreement provides for the possibility of further discussion between the parties on the continuation of the Transaction, taking into consideration the extra conditions stipulated in this consent.
To the extent permitted by applicable laws, the parties plan to coordinate their activities in terms of preparing of the required information and data for the application needs. In this regard, the parties agreed to choose a common legal adviser who will be responsible for preparation of the application and will represent the parties in the proceedings before the President of the Office of Competition and Consumer Protection. The rules for submission of information and data to the appointed adviser were settled in order to maintain the confidentiality of a certain sort of information belonging to each of the parties. This procedure is intended to ensure the most effective preparation of the application and participation in the proceedings of an authority, while excluding the need to transfer data directly between the parties.
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