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Current Report No. 31/2019

27.08.2019 15:50

Adoption of the terms and conditions related to the acquisition of wind farms

In reference to current report No. 27/2018 of October 2, 2018 on the commencement of negotiations regarding acquisition of wind farms, the Management Board of TAURON Polska Energia S.A. (“Issuer”) informs that on 27 August 2019 they adopted the terms and conditions of the transaction involving the acquisition of five wind farms owned by in.ventus group and bank receivables held by Hamburg Commercial Bank AG (formerly HSH Nordbank AG) with its registered office in Hamburg (“Bank”) against the wind farm operating companies (“Transaction”) and decided to submit a request to the Supervisory Board to determine the method of exercising the right to vote by the sole partner, i.e. TAURON Polska Energia S.A., at the extraordinary shareholders’ meetings of the Issuer’s wholly owned subsidiaries: TEC 1 Sp. z o.o., TEC 2 Sp. z o.o., TEC 3 Sp. z o.o. (“Subsidiaries”) in matters related to the Transaction.

Transaction will be executed through the acquisition by Subsidiaries of Polish partnerships that own the wind farms and German partnerships that are their limited partners (“Project Companies”). Subsidiaries will assume all rights and obligations of the existing partners of the Project Companies and, at the same time, acquire the Bank’s receivables against the Project Companies.

The total acquisition price was agreed as of the date of this report at approx. EUR 137 million and will be subject to adjustments resulting, in particular, from the effects of cooperation between the parties. The acquisition price was calculated using the “locked-box” mechanism as of December 31, 2018.

The acquisition price will be paid with funds from the Issuer’s recapitalization of the Subsidiaries acquiring the Project Companies. The Issuer will finance the capital increase of the Subsidiaries using funds accumulated on its bank accounts.

Subject to the completion of the Transaction, the parties to the negotiations have also agreed that the Bank will undertake to withdraw the lawsuit filed against TAURON Sprzedaż sp. z o.o., of which the Issuer informed in current report No. 4/2019 of March 7, 2019.

At the same time the Issuer informs that subject to the completion of the Transaction, it will be possible to close the proceedings in the lawsuit filed by in.ventus group companies against the Issuer’s Capital Group companies.

The wind farms are located in the north of Poland and were commissioned in 2009-2011. Their total installed capacity is 180 MW and the average annual electricity production is approx. 450 thousand MWh.

It is not possible to present estimated impact of the financial data of the Project Companies and the Transaction on the Issuer’s financial statements as of the date of this report because at present the Project Companies’ financial statements are prepared in accordance with, respectively, Polish or German accounting regulations while the Issuer’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).

The Issuer will perform fair value valuation of identifiable assets and liabilities acquired under the Transaction as of the date of the acquisition of the Project Companies, however, in accordance with the IFRS the valuation should be completed not later than within a year from the acquisition date. Until the date of completing the valuation the Issuer will present in the financial statements temporary values of the assets and liabilities acquired.

The Issuer obtained merger clearance from the President of the Office of Competition and Consumer Protection, as disclosed by the Issuer in current report No. 27/2019 of July 25, 2019.

The acquisition of wind farms is in line with the update of strategic directions that are an addendum to TAURON Group’s 2016-2025 strategy announced on May 27, 2019. The update envisages a significant increase of low and zero-emission sources’ share in the installed capacity structure of the Issuer’s Capital Group.

The Issuer will inform about further material events concerning the Transaction in current reports.

Article 17 section 1 of MAR – inside information

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