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Current Report No.: 37/2016

Title: Approval by Enea S.A.'s Supervisory Board of the joint engagement with Energa S.A. in the preparation for construction, construction and exploitation of the new power unit in Ostrołęka Power Plant
Date: 2016.30.11
Report no.:  Current Report No.: 37/2016

Current Report No.: 37/2016

Date of preparation: 30.11.2016

Short name of issuer: Enea S.A.

Subject: Approval by Enea S.A.'s Supervisory Board of the joint engagement with Energa S.A. in the preparation for construction, construction and exploitation of the new power unit in Ostrołęka Power Plant

Legal basis: Article 17 item 1 of MAR - confidential information

Content of report:

The Management Board of Enea S.A. ("Company"), in relation to the current report of 19 September 2016 No. 28/2016 informs that on 30 November 2016 the Company's Supervisory Board approved the conclusion of the Investment Contract by Enea S.A. with Energa S.A. and Elektrownia Ostrołęka S.A. and acquisition by Enea S.A. of 50% of shares held by Energa S.A. in the share capital of Elektrownia Ostrołęka S.A., and as a consequence, approval of the cooperation of Enea S.A. and Energa S.A. in relation to the implementation of Ostrołęka C project, whose goal is preparation, construction and exploitation of a 1,000 MW bituminous coal fired power unit ("Project", "Investment", "Ostrołęka C").

The cooperation, as a rule, will be organised in three stages: Development Stage - until the instruction to commence works for the general contractor; Construction Stage - until the commissioning of Ostrołęka C for commercial exploitation and Exploitation Stage - commercial exploitation of Ostrołęka C. After the Development Stage Enea S.A. is obliged to participate in the Construction Stage with the assumption that the Project profitability condition is satisfied, and Project financing will not infringe upon the Company's bank covenants.

It is estimated that Enea S.A.'s total capital expenditures until the completion of the Development Stage will amount to ca. PLN 128 million.

For the implementation of the Investment Energa S.A. will dispose of the shares held in Elektrownia Ostrołęka S.A., constituting 50% in the share capital, to Enea S.A., in the amount of ca. PLN 101 million. A condition precedent suspending the Investment Contract's entry into force is obtaining the consent of the President of the Office of Competition and Consumer Protection to perform the consolidation being the acquisition of the shares in the special purpose vehicle to implement the Project.

Elektrownia Ostrołęka S.A. on the realisation of specific assumptions (with a relevant share of Enea S.A., Energa S.A. and potential Financial Investors) and assuming the introduction of the Capacity Market or other support mechanisms, will be able to undertake a comprehensive implementation of the Project.

Another step is conclusion of the Investment Contract by Energa S.A., Enea S.A. and Elektrownia Ostrołęka S.A. The terms of cooperation agreed upon following the execution of the Investment Contract should contribute to the announcement of a tender for the selection of a general contractor for the power unit until the end of 2016, with the aim of completing the Investment in the second half of 2023.

Having in mind the diverse and international nature of Enea SA's shareholding, and also the provisions of the Best Practices of WSE Listed Companies, Enea SA guarantees the availability of its website also in English. In case of any interpretation doubts and discrepancies between the Polish and English versions, the Polish version shall prevail.