Current Report No.: 12/2019
Date of preparation: 30 April 2019
Short name of issuer: ENEA S.A.
Legal basis: Article 17(1) MAR - confidential information
Subject: Conclusion of a memorandum of understanding on financing the Ostrołęka C project
Content of report:
The Management Board of ENEA S.A. ("Issuer") hereby informs that on 30 April 2019 the Issuer concluded a memorandum of understanding ("Memorandum") with Energa S.A. ("Energa") on financing the construction project of the new coal-fired unit - the planned Ostrołęka C power plant in Ostrołęka with a gross capacity of 1,000 MW ("Project"). By means of the Memorandum, the Issuer and Energa have resolved to further specify the details of the financing terms for the Project, which were preliminarily agreed upon in the memorandum of understanding concluded between the Issuer, Elektrownia Ostrołęka sp. z o.o. ("Company") and Energa on 28 December 2018, about the conclusion of which the Issuer informed in Current Report No. 68/2018 of 29 December 2018.
In the Memorandum, the Issuer has undertaken to provide the Company with funds for the implementation of the Project in the amount of PLN 819 million from January 2021 as part of the financial involvement in the amount of PLN 1 billion declared in the memorandum of understanding of 28 December 2018, taking into account the funds already transferred to the Company for the purposes of making an advance payment to the general contractor of the unit in the amount of approximately PLN 181 million. However, if the Issuer fails to conclude a new Shareholders' Agreement / Investment Agreement with Energa by 31 December 2020, the Issuer will, on the dates specified in the Memorandum and within the limit of PLN 819 million, be obliged to refund to Energa half of the funds that Energa will independently provide to the Company in that period.
If, within the time limit stipulated in the agreed schedule, the Issuer or Energa should fail to provide the Company, due to their fault, with the funds in a manner other than, in particular, through granting a loan or taking up shares, then the Issuer or Energa, accordingly, will be obliged to pay the relevant amount specified in the schedule to the Company's account. The Memorandum also contains a provision protecting the Issuer against the Company's claims for reimbursement of the funds for the Project's financing which were returned directly to Energa in connection with the financing provided to the Company by Energa in the period before the conclusion date of the new Shareholders' Agreement / Investment Agreement.
The Parties to the Memorandum have agreed that any other agreements concerning the Project shall specify the rules of their participation in the Project's risks, the rules of profit and loss sharing and the corporate governance principles which will secure the rights and obligations proportional to their involvement in the Project.
The Parties to the Memorandum have undertaken to strive to ensure that the Company's results are not consolidated with their results.