Current Report No. 19/2017

Belongs to:

  • Reports

Date of preparation: 31 March 2017

Subject: Entering into an investment agreement on recapitalization of PGG

Legal basis: Article 17 Section 1 of the Market Abuse Regulation – confidential information

 

In reference to Current Report No. 18/2017 of 29 March 2017, the Management Board of ENERGA SA reports that on 31 March 2017 ENERGA SA’s subsidiary ENERGA Kogeneracja Sp. z o.o. (“ENERGA Kogeneracja”, “company”) signed an investment agreement specifying the terms and conditions of the financial investment in Polska Grupa Górnicza Sp. z o.o. (“PGG”) (“Transaction”, “Investment”) (“Agreement”, “Investment Agreement”).

The parties to the Investment Agreement are ENERGA Kogeneracja, Enea S.A., PGE Górnictwo i Energetyka Konwencjonalna S.A., PGNiG TERMIKA S.A., Węglokoks S.A., Towarzystwo Finansowe “Silesia” Sp. z o.o., Fundusz Inwestycji Polskich Przedsiębiorstw Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych [Polish Corporates Mutual Fund] (hereinafter jointly referred to as “Investors”) and PGG.

The new Investment Agreement amends and supplements the terms and conditions of execution of the investment of the existing PGG shareholders specified in the first investment agreement entered into between the existing shareholders and the company on 28 April 2016.

The Transaction assumes recapitalization of PGG by the Investors (excluding Węglokoks S.A. and Fundusz Inwestycji Polskich Przedsiębiorstw) for the total amount of PLN 1 billion in 3 tranches.

As part of the investment in PGG, ENERGA Kogeneracja has undertaken to subscribe for new shares with the total par value of PLN 100 million in return of a cash contribution of PLN 100 million, in 3 tranches:

  • in the first tranche in April 2017 the company will subscribe for PGG’s shares in return for a cash contribution of PLN 50 million,
  • in the second tranche in June 2017 the company will subscribe for PGG’s shares in return for a cash contribution of PLN 20 million,
  • in the third tranche in Q1 2018 the company will subscribe for PGG’s shares in return for a cash contribution of PLN 30 million.

After the last recapitalization the company will have a 15.32% stake in PGG’s share capital.

The purpose of the investment was to raise funds for PGG to finance the acquisition of the enterprise of Katowicki Holding Węglowy S.A. and PGG’s planned capital expenditures.

The Agreement also regulates the rules for PGG’s functioning and appointing Supervisory Board members according to which each Investor and State Treasury will be entitled to appoint one member in the Supervisory Board with a maximum size of 8 persons.

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