Grupa Kapitałowa Grupa Azoty
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These documents have been prepared and executed in the Polish language. In case of any inconsistency between the Polish language version and any translation hereof made for any purpose, the Polish version shall prevail.
Legal basis: Art. 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the „Company”) announces that as a result of impairment tests carried out at the Company for non-current assets of the Fertilizers cash generating unit (CGU) and Plastics CGU, in the case of the Plastics CGU a negative difference has been identified between the recoverable amount and carrying amount of the assets, and a decision has been made to recognise impairment losses of PLN 88m. No impairment losses were necessary in the case of the Fertilizers CGU.
The impairment has been recognised based on the projected financial performance of the Plastics CGU in the context of the significant capital expenditure that will be required, in particular in connection with the more stringent requirements regarding environmental protection and reduction of the energy and emissions intensity of the Company’s manufacturing activities, as well as a material increase in market interest rates, affecting the discount rate for projected future cash flows.
Recognition of the impairment losses will have an effect on the Company's 2022 financial statements by reducing separate EBIT by PLN 88m. In accordance with the Grupa Azoty Group’s accounting policies, impairment losses are one-off non-cash charges and have no effect on the Company's separate EBITDA.
At the same time, impairment tests carried
out for non-current assets of the Company's subsidiaries led to the
identification of a negative difference between the recoverable amount and the
carrying amount of the assets, and decisions have been made to recognise
impairment losses on non-current assets of the Plastics and Melamine CGUs of
Grupa Azoty Zakłady Azotowe Puławy S.A. and of the Fertilizers and Pigments
CGUs of Grupa Azoty Zakłady Chemiczne Police S.A.
Recognition of the impairment losses on non-current assets at the Company and its subsidiaries will have an effect on the Group's 2022 consolidated financial statements by reducing consolidated EBIT by a total of PLN 963m. In accordance with the Grupa Azoty Group’s accounting policies, impairment losses are one-off non-cash charges and have no effect on the Company's consolidated EBITDA.
The Company's Management Board further announces that inventory write-downs have been recognised as at the reporting date in the Company’s financial statements. Net inventory write-downs recognised in Q4 2022 totalled approximately PLN 64m, and had the effect of reducing the Company's EBIT and EBITDA.
Inventory write-downs have also been recognised in the financial statements of the Company's subsidiaries. They will reduce the consolidated EBIT and EBITDA in the 2022 consolidated financial statements of the Grupa Azoty Group by approximately PLN 404m.
The inventory write-downs were required in view of the lower product selling prices seen since the beginning of 2023, which in the case of some of the products are below cost.
The write-downs are non-cash charges and have no effect on the liquidity position of the Company or its Group.
Information on expected impairment losses and inventory write-downs to be recognised in the 2022 financial statements has been reported by the subsidiaries, i.e. Grupa Azoty Zakłady Azotowe Puławy S.A. and Grupa Azoty Zakłady Chemiczne Police, in their Current Reports No. 9/2023 of March 13th 2023 and No. 6/2023 of March 13th 2023, respectively.
As the audit of the 2022 financial statements of the Company and its subsidiaries has not yet been completed, the amounts above are not final and are subject to change. The Company's full-year report is scheduled to be issued on March 30th 2023.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Grupa Azoty Group’s estimated consolidated production output in February 2023 and scheduled maintenance shutdown of the ammonia and urea production lines at the Company's subsidiary
Further to Current Report No. 7/2023 of February 22nd 2023, the Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached hereto, estimates of consolidated production output in February 2023.
Actual quarterly output figures will be released in the consolidated report for the first quarter of 2023.
At the same time, the Management Board announces that on March 10th 2023, the Management Board of the Company's subsidiary Grupa Azoty Zakłady Azotowe Police decided, despite activities undertaken to increase sales, to continue the scheduled maintenance shutdown of the ammonia and urea production lines until March 31st 2023. The decision was made in view of the aggravating negative supply and demand situation in the market.
Information on the shutdown was released by the subsidiary in Current Report No. 5/2023 of March 10th 2023.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Text of the report: The Management Board of Grupa Azoty S.A. (the “Company”) announces that on March 10th 2023 it was notified that the National Fund for Environmental Protection and Water Management had granted the Company’s request for financial support as part of aid to energy-intensive sectors related to sudden increases in natural gas and electricity prices. The amount of aid granted to the Company is PLN 52.3m.
Financial support was also granted to other companies of the Grupa Azoty Group. The aggregate amount of support granted to the Group companies, i.e. Grupa Azoty S.A., Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A., Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. and Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A., is PLN 234.2m.
The aid amount will be included in their respective separate and consolidated Q1 2023 accounts by increasing EBITDA.
The funds were granted under the Act on the rules of implementation of business support programmes in view of the situation on the energy market in 2022-2024,dated September 29th 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on March 9th 2023 the Management Board of the Company’s subsidiary Grupa Azoty Zakłady Azotowe Puławy S.A. (the “Subsidiary”) made a decision to suspend production of caprolactam (Plastics Segment) and operation of the Melamine III unit (Agro Segment) effective from March 10th 2023 until further notice. Production at the remaining melamine units (Melamine I and Melamine II) was halted in the summer of 2022, as announced by the Subsidiary in Current Report No. 21/2022 of July 8th 2022 and Current Report No. 23/2022 of August 10th 2022.
The current stoppage of caprolactam and melamine production is associated with the supply and demand situation on the European market.
The information on the production closedown was released by the Subsidiary in Current Report No. 6/2023 of March 9th 2023.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) hereby announces that, with a view to enhancing the transparency of the Company’s information disclosure policy intended to ensure that investors are provided with access to information relevant to the assessment of the Company’s and the Grupa Azoty Group’s situation and outlook, a decision was made on February 22nd 2023 to commence regular publication of estimates of the Group’s consolidated production output on a monthly basis.
Monthly reports on estimated production output will be released as soon as data for a given month are aggregated, but in any case no later than by the 15th day of the following month.
Accordingly, the Company publishes, attached hereto, estimates of consolidated production output in January 2023.
Actual quarterly output figures will be released in the consolidated report for the first quarter of 2023.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on February 9th 2023 the Supervisory Board of the Company appointed Marcin Kowalczyk as Vice President of the Management Board of the 12th term, with effect from February 10th 2023.
The Management Board further announces that Marcin Kowalczyk has made a representation to the effect that he is not engaged in any activities competing with the Company’s business, nor is he a partner in any competing partnership under civil law or any other type of partnership, a shareholder in any competing incorporated company or a member of a governing body of any other competing legal entity.
Marcin Kowalczyk is not entered in the Register of Insolvent Debtors maintained pursuant to the National Court Register Act.
A brief description of the newly appointed Vice President’s educational background, qualifications, previously held positions and employment records is attached to this current report.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Grupa Azoty S.A. (the “Company”) will announce its 2022 full-year results and 2023 interim results as per the following schedule:
1. First and third quarter interim results:
- Q1 2023 complete consolidated report – May 25th 2023
- Q3 2023 complete consolidated report – November 8th 2023
2. Half-year interim results:
- H1 2023 complete consolidated report – August 30th 2023
3. Full-year results:
- 2022 separate full-year report – March 30th 2023
- 2022 consolidated full-year report – March 30th 2023
The 2022 consolidated report on payments to governments will be released on March 30th 2023.
Furthermore, the Company announces that no separate quarterly results will be published by the Company, as permitted under Par. 62.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757) (the “Regulation”). The consolidated quarterly reports will incorporate quarterly condensed consolidated financial statements and quarterly financial information.
Also, the Company will not publish a separate (non-consolidated) half-year report, as permitted under Par. 62.3 of the Regulation.
Further, the Company will not publish separate or consolidated quarterly results for Q4 2022 and Q2 2023, as permitted under Par. 79.2 of the Regulation.
Legal basis: Par. 80.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that the Company’s Supervisory Board, at its meeting held on January 16th 2023, passed a resolution to remove from the Management Board one of its Vice Presidents Mr Tomasz Hryniewicz. The removal of Mr Tomasz Hryniewicz from the Management Board becomes effective as of the end of day January 16th 2023.
The resolution of the Supervisory Board regarding the removal of the Vice President took effect upon its adoption.
Legal basis: Par. 5.4 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 2/2023 of January 11th 2023, the Management Board of Grupa Azoty S.A. (the “Company”) presents, attached hereto, a brief description of the educational background, qualifications, previously held positions and employment record of the newly appointed Member of the Company’s Supervisory Board, Ms Marzena Małek.
The Management Board further announces that Ms Marzena Małek has made a representation to the effect that she is not engaged in any activities competing with the Company’s business, nor is he a partner or shareholder in any competing partnership or company or a member of governing bodies of such partnership or company.
The representation received by the Company includes a statement to the effect that the new Member of the Supervisory Board is not entered in the Register of Insolvent Debtors maintained pursuant to the Act on the National Court Register.
Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on January 11th 2023 it received a notification from the Minister of State Assets, dated January 10th 2023, of the appointment, pursuant to Art. 16.2 of the Company’s Articles of Association, of Ms Marzena Teresa Małek to the Company’s Supervisory Board of the 11th joint term of office as of January 11th 2023.
A brief description of the newly appointed Supervisory Board Member’s educational background, qualifications, previously held positions and employment records, together with all the representations required from him, will be published by the Company as soon as practicable.
Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on January 3rd 2023 it received a notice of resignation from Mr Marcin Mauer from his position as Member of the Company’s Supervisory Board.
Mr Mauer did not specify the reasons for his resignation.
Legal basis: Par. 5.4) of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 22/2022 of July 20th 2022, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 23rd 2022 the Company, VSB Holding GmbH of Dresden, Germany and Mr Janusz Franciszek Siemieniec (collectively the “Sellers”) defined the term sheet for the purchase of 100% of shares in the share capital of Solarfarm Brzezinka sp. z o.o. (the “Transaction”).
In accordance with the Term Sheet, the Transaction will be carried out by entering into a preliminary conditional share purchase agreement to acquire in the future 100% of shares in Solarfarm’s share capital, followed by the purchase of the shares under a share purchase agreement in the first half of 2024 by the Company or another company of its Group, provided that technical conditions are adjusted and building permits for the construction of a power plant are obtained.
The Brzezinka solar farm, located in Brzezinka and Syców, together with infrastructure with a power output of 270 MWp or more, will be built as a turn-key project under an EPC contract planned to be concluded by Solarfarm with VSB Energie Odnawialne Polska sp. z o.o., a member of the VSB Group, as the general contractor.
The total value of the investment is estimated at EUR 240m.
The execution of the Term Sheet does not give rise to any obligation to enter into the contemplated Transaction, or any share purchase agreement, and is not binding on the parties. However, the parties undertook to negotiate the share purchase and the contemplated transaction in good faith, in accordance with the Term Sheet.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Grupa Azoty S.A. (the “Company”) announces that on December 16th 2022 it was notified by its subsidiary, Grupa Azoty Polyolefins S.A. (the “Subsidiary”), of a contract for the purchase of propane signed with Trafigura Pte Ltd, Singapore.
The contract provides propane will be delivered to the Subsidiary from December 2022 to December 2024 in accordance with the agreed schedule and commercial terms. Deliveries of propane made under the contract will cover more than 50% of the Subsidiary’s demand for propane in 2023 and 2024. Propane is the key raw material for production due to commence once the Subsidiary brings the Polimery Police project online.
The value of the deliveries to be made under the contract is estimated at approximately USD 250m.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached hereto, estimated selected consolidated financial results of the Grupa Azoty Group (the “Group”) for the third quarter and the first nine months of 2022.
Discussion of the results for the first nine months of 2022:
In the first nine months of 2022, the Grupa Azoty Group generated consolidated revenue of PLN 19,551m, EBITDA of PLN 2,842m, and an EBITDA margin of 14.5%.
In the reporting period, the Group’s performance was affected by the consequences of Russia’s armed aggression against Ukraine and the unprecedented spike in prices of commodities, in particular natural gas, being the main raw material used in fertilizer production.
Discussion of the results for the third quarter of 2022:
In the third quarter of 2022, the Group generated consolidated revenue of PLN 6,314m, EBITDA of PLN 267m and EBITDA margin of 4.2%. Year on year, the Group recorded a drop in results.
The above figures were delivered amid high uncertainty caused by soaring and volatile prices of commodities, in particular natural gas, which resulted in temporary production cuts at certain units of the Company and its subsidiaries: Grupa Azoty Zakłady Azotowe Puławy S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A.
Main factors with a bearing on the Group’s financial performance in the key segments in the third quarter of 2022 compared with the third quarter of 2021:
1. In the Agro segment:
The reporting quarter saw further increases in the prices of raw materials used in fertilizer production, in particular natural gas, being a consequence of Russia’s armed aggression against Ukraine.
The rapid growth in natural gas prices which began in the second half of 2021 continued, reaching a peak at the end of August 2022. The average market price of natural gas in the third quarter of 2022 compared to the same period last year rose by more than 300%.
As a consequence of the unprecedented increases in the price of natural gas, a decision was made in August 2022 to temporarily reduce production at three key companies of the Group: the Company, Grupa Azoty Zakłady Azotowe Puławy S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. The Group companies were among the last producers in the European Union who decided to cut production.
The Agro Segment’s EBITDA margin generated in the third quarter of 2022 stood at 1.6%.
2. In the Chemicals segment:
In the third quarter of 2022, the product demand situation and growing prices of raw materials used in production were the main determinants of the Chemicals Segment’s performance. Demand on the target markets was relatively weak and European producers came under significant competitive pressure from non-EU imports.
As a result of the adverse market situation, melamine production at Grupa Azoty Zakłady Azotowe Puławy S.A. was temporarily suspended.
The products for which a year-on-year growth in sales volumes was reported were sulfur and NOXy.
The EBITDA margin achieved by the segment in the third quarter of 2022 stood at 0.8%.
3. In the Plastics segment:
In the third quarter of 2022, the Plastics Segment reported significant volatility in prices of key raw materials: benzene and phenol. The prices climbed to record highs in July 2022 to start a steep decline in August. The high cost of raw materials prompted the decision to temporarily halt production.
The Plastics segment was mainly affected by poor demand from the main markets of polyamide applications. The demand situation was additionally aggravated by the summer holiday season. The exception was the packaging sector where demand remained stable throughout the reporting period. There were no signs of any significant demand recovery in the EU automotive industry, an important customer for the Plastics segment. Moreover, the reporting period saw higher imports of more attractively priced polyamide products and derivatives into the European market.
The segment’s EBITDA margin generated in the third quarter of 2022 was negative at -2.7%.
The amounts presented above are estimates and may be subject to change. The final results will be presented in the consolidated report for the third quarter and the nine months ended September 30th 2022, to be issued on November 9th 2022.
Information on decisions concerning production cuts at the Group companies was published by the Company in Current Reports No. 23/2022 and No. 24/2022 of August 22nd 2022, No. 25/2022 of August 23rd 2022, No. 31/2022 and No. 32/2022 of October 12th 2022, No. 33/2022 of October 21st 2022, and No. 34/2022 of October 27th 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (the “Company”) announces that item 3 of the list of shareholders holding 5% or more of total voting rights at the Company’s Annual General Meeting (the “AGM”) held on June 29th 2022, published in Current Report No. 19/2022 of June 29th 2022, erroneously included a Shareholder, registered and entitled to participate in the AGM, who eventually did not confirm their presence at the AGM on June 29th 2022.
The Company publishes, attached to this report, a corrected list of shareholders holding 5% or more of total voting rights at the Annual General Meeting held on June 29th 2022, specifying the number of voting rights conferred by the shares held by each shareholder, and their percentage share in the voting rights represented at the Annual General Meeting and in total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2021, item 1983, as amended).
Further to Current Report No. 23/2022 of August 22nd 2022 and Current Report No. 32/2022 of October 12th 2022, the Management Board of Grupa Azoty S.A. announces that on October 27th 2022 Grupa Azoty Zakłady Azotowe Puławy S.A. (the “Subsidiary”) decided to resume the production of melamine (Agro Segment) by putting in operation the Melamine III unit, and caprolactam (Plastics Segment).
The information was released by the Subsidiary in Current Report No. 30/2022 of October 27th 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 25/2022 of August 23rd 2022, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on October 21st 2022 the Management Board of Grupa Azoty Zakłady Azotowe Kędzierzyn S.A., the Company’s subsidiary, decided to scale up the operation of the Fertilizer Production Unit to full available capacity.
The capacity will come on stream following a periodic maintenance shutdown, with the production restart due to begin on October 21st 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Further to Current Report No. 23/2022 of August 22nd 2022, the Management Board of Grupa Azoty S.A. announces that on October 12th 2022 Grupa Azoty Zakłady Azotowe Puławy S.A. (the “Subsidiary”), in response to a change in market conditions, resolved to increase capacity utilisation and start up the Agro Segment’s process units used to make nitrogen fertilizers (PULAN®, PULAN® MACRO, SALETRZAK 27N, PULREA®, PULREA®+INu, RSM ®) as of October 12th 2022.
Taking into account the current production (Agro Segment: ammonium sulfate from the Flue Gas Desulfurisation Unit, non-fertilizer products excluding melamine), the process plant that will remain shut down after the full start-up of the fertilizer production units will be the caprolactam unit (Plastics Segment) and the melamine unit (Agro Segment).
The information was released by the Subsidiary in Current Report No. 29/2022 of October 12th 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Further to Current Report No. 24/2022 of August 22nd 2022, the Management Board of Grupa Azoty S.A. (the “Company”) announces that, in response to a change in market conditions, it has resolved to start production at the previously shut-down nitrogen fertilizer, caprolactam and polyamide 6 units as of October 12th 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 26/2015 of April 23rd 2015, Current Report No. 52/2016 of September 20th 2016 and Current Report No. 34/2018 of June 29th 2018, the Management Board of Grupa Azoty S.A. (the “Company” or the “Borrower”) announces that on September 26th 2022 the Company and selected other companies of its Group (the “Borrowers” or the “Group Companies”) signed an annex to a PLN 240m multi-purpose credit facility agreement (the “MPCF Agreement”) with Powszechna Kasa Oszczędności Bank Polski S.A. (the “Bank”). Under the annex:
a) Group Companies which had not been parties to the MPCF Agreement joined the MPCF Agreement as borrowers;
b) the term of the MPCF Agreement, expiring on September 30th 2022, was extended until September 30th 2025 (the “Facility Term”), with the option to extend it for subsequent 12-month periods;
c) the credit limit under the MPCF agreement was increased to PLN 1bn (the “Facility Limit”);
d) an overdraft facility was made available within the Facility Limit to Grupa Azoty S.A.;
e) a revolving working capital facility, bank guarantees and bank letters of credit were made available within the Facility Limit to Grupa Azoty S.A. and the Group Companies that are parties to the MPCF Agreement;
f) bank guarantees issued by the Bank to Group Companies under separate agreements were incorporated into the MPCF Agreement as of September 30th 2022;
g) the following companies: Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. and Grupa Azoty Zakłady Chemiczne Police S.A. (the “Key Subsidiaries”) were released from their obligations under a surety agreement for the MPCF Agreement of June 29th 2018.
As at the annex date, the following limits and sub-limits were set within the Facility Limit with effect from September 30th 2022:
1) limit of the overdraft facility for Grupa Azoty S.A.: up to PLN 300 m;
2) sub-limits for the revolving facility, guarantees or letters of credit – for Grupa Azoty S.A.: up to PLN 575.15m, for Grupa Azoty Zakłady Chemiczne Police S.A.: up to PLN 62m, for Grupa Azoty Zakłady Azotowe Puławy S.A.: up to PLN 1m, for Grupa Azoty Zakłady Azotowe Kędzierzyn S.A.: up to PLN 30m, and for other Grupy Azoty companies that are borrowers under the MPCF Agreement: up to PLN 31.85m in total.
The Company is liable to repay all amounts due under the MPCF Agreement, and each of the other Borrowers (i.e. the Company’s subsidiaries) is liable to repay the amounts due under the facility which were drawn under the sub-limit made available to the Borrower. The facility bears interest at an annual rate equal to the reference rate 1M WIBOR for the PLN denominated facility, 1M EURIBOR for the EUR denominated facility, and 1M LIBOR for the USD denominated facility, plus the Bank's margin.
The Company's Management Board further announces that on September 26th 2022 the Company, together with other Group Companies, entered into a PLN, EUR and USD physical cash pooling agreement with the Bank for the period until September 30th 2025 (the “PCP Agreement”).
The PLN, EUR and USD physical cash pooling structures are designed to optimise the interest income and expenses and to enable the Group companies to use the Group’s global liquidity limit within the positive and negative balances in the companies’ current accounts.
In addition, the Company's Management Board announces – in connection with the execution of the MPCF Agreement and the PCP Agreement and
The MPCF Agreement also imposes certain restrictions on the Company and the Key Subsidiaries, including restrictions on disposal or encumbrance of its material assets, granting loans and guarantees, paying dividends and incurring financial liabilities if the consolidated net debt to EBITDA ratio thresholds agreed with the lenders are exceeded, which have been made consistent with the Credit Facility Agreement of April 23rd 2015, as amended by the Amending Agreement of June 29th 2018 referred to in Current Report No. 25/2015 of April 23rd 2015 and Current Report No. 33/2018 of June 29th 2018.
The amendments introduced to the MPCF Agreement under the annex, in particular consolidation of the facilities used under the MPCF Agreement and the Overdraft Facility Agreement, and release of the Key Subsidiaries from their obligations under sureties issued for those agreements, as well as consolidation of the PLN, EUR and USD physical cash pooling services under a single PCP Agreement, are intended to further optimise the long-term financing package for the financing of general corporate needs and to ensure security of financing for the Group companies by putting in place an umbrella structure for the allocation of limits and actual intra-group redistribution.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes the estimated selected consolidated financial results of the Grupa Azoty Group (the “Group”) for the second quarter and the first half of 2022.
Discussion of the results for the first half of 2022
In the first half of 2022, the Grupa Azoty Group generated consolidated revenue of PLN 13,237m, EBITDA of PLN 2,575m, and an EBITDA margin of 19.5%.
Discussion of the results for the second quarter of 2022
In the second quarter of 2022, the Group generated consolidated revenue of PLN 6,410m, EBITDA of PLN 1,240m, and an EBITDA margin of 19.3%.
The results were positively impacted by the level of product prices in Europe in the markets where the Group operates.
The Group’s results were adversely impacted by record high prices of raw materials used in production processes and lower sales volumes for most fertilizer groups, chemical products and plastics.
The results generated by the Group during the period under review were strongly influenced by the turbulence caused by Russia’s aggression against Ukraine, which has a negative effect on the availability and prices of raw materials, eventually translating into rising prices of final products.
Main drivers of the results for the second quarter of 2022 in the key segments:
Agro
In the Agro Segment, the reported quarter was another consecutive period of high prices of feedstock and raw materials used in fertilizer production, particularly natural gas, potassium chloride and phosphate rock.
The challenging conditions in the raw materials market are a consequence of Russia’s aggression against Ukraine, which has led to Russia reducing or completely halting gas supplies to the EU countries. The chains of supply to the Group of some important raw materials and intermediates have also been changed or disrupted.
As a consequence of production cutbacks introduced by key European fertilizer producers due to record high prices of commodities, particularly natural gas, the supply of fertilizers across Europe has significantly declined.
In the first half of 2022, the Group’s production units operated at full available capacity and the Group satisfied the demand for fertilizers on the Polish market during the spring fertilizer season.
Prices for natural gas, the key feedstock used in fertilizer production, were on a strong upward trend at the end of the second quarter of 2022, with record highs reached in the third quarter of 2022. The average market price of natural gas in the second quarter of 2022 compared to the same period last year rose by approximately 290%. These changes, combined with the market situation, led to a major spike in product prices.
The sales volume in the Agro Segment in the second quarter of 2022 was down 11% year on year, and even as much as 21% in the case of compound fertilizers.
The Agro Segment’s EBITDA margin generated in the second quarter of 2022 stood at 18.0%.
Chemicals
In the Chemicals Segment, the second quarter of 2022 saw a year-on-year increase in prices of all products, with a concurrent decrease in most products’ sales volumes. The rapid increase in the prices of raw materials for the production of chemicals significantly pushed up product prices, leading to a slump in demand.
The market situation for melamine was affected by the approaching end of the effective period of anti-dumping duties on imports of melamine from China into the EU.
In the case of sulfur, the price increase was a consequence of Russia’s military aggression against Ukraine and supply constraints due to the elimination of distribution channels from Russia and Kazakhstan.
The increase in sales volumes was recorded mainly for technical urea and OXO alcohols.
The segment’s EBITDA margin generated in the second quarter of 2022 stood at 22.0%.
Plastics
In the Plastics Segment, the second quarter of 2022 saw a year-on-year increase in the prices of the main raw materials used in production processes, that is benzene and phenol , by 18% and 24%, respectively , with a concurrent increase in the prices of polyamide manufactured at the Group. Polyamide sales volumes were slightly down year on year amid slumping demand in the automotive industry caused by difficulties securing semiconductors and other components the supply of which was not rebuilt after the COVID-19 pandemic.
This resulted in temporary production cuts and shutdowns at end users. The packaging sector continued to show a strong and stable demand.
The segment’s EBITDA margin generated in the second quarter of 2022 was 8.6%.
The amounts presented above are estimates and may be subject to change. The final figures will be presented in the consolidated report for the first half of 2022, scheduled to be published on September 28th 2022.
At the same time, the Company would like to note that the results of future periods may be adversely affected by the consequences of partial production cuts at Grupa Azoty S.A., Grupa Azoty Zakłady Azotowe Puławy S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A., introduced in the third quarter of 2022 due to an extraordinary and unprecedented increase in natural gas prices.
The Company announced the introduction of production cuts at the Group companies in Current Reports No. 23/2022 and 24/2022 of August 22nd 2022, and in Current Report No. 25/2022 of August 23rd 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, L 173/1 as amended).
Legal basis: Art. 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on September 19th 2022, following a tender procedure, the Company entered into a framework contract for the purchase of coal (the “Contract”) withthe successful bidder Polska Grupa Importowa Premium Sp. z o.o. of Katowice (the “Seller”).
The Contract provides for the supply of imported thermal coal. Coal deliveries to be made under the Contract will be complementary to other sources of coal used by the Company for energy generation purposes.
The Contract has been concluded for an indefinite period and contains general terms and conditions of cooperation related to the supply and offtake of coal. The total value of coal to be delivered in 2022 is estimated at approximately PLN 110m, VAT-exclusive.
Framework contracts for the purchase of coal from the Seller have also been concluded by the Company’s subsidiaries: Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (jointly with the Company – the “Customers”). Coal deliveries to be made under the Contract will be complementary to deliveries received by the Customers from their strategic suppliers. The Contract also permits the Customers to redirect the contracted coal supplies between themselves
The total value of deliveries to be made from the Seller to the Customers in 2022 is estimated at approximately PLN 160m, VAT-exclusive. The Company may order further deliveries under the Contract in the future.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (“Company”) announces that on September 12th 2022, having completed a due diligence and valuation of the business of Zespół Elektrowni Wodnych Niedzica S.A. (“ZEW Niedzica”), with regard to the Grupa Azoty Group’s Strategy for 2021–2030 envisaging, among other things, the Group’s transition towards renewable energy sources, decided to request the Polish State Treasury, as the sole shareholder in ZEW Niedzica, to initiate a process leading to potential acquisition and integration of the company into the Grupa Azoty Group.
The principal business of ZEW Niedzica is the generation of renewable energy from hydropower assets – the pumped-storage hydroelectric power station in Niedzica, and the hydroelectric power plants in Sromowce Wyżne on the Dunajec River, and in Łączany and Smolice on the Vistula River. Their annual electricity output is approximately 100 GWh.
Further steps in the potential transaction and its optimal structure will be subject to specific arrangements with the State Treasury.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 2/2022 of January 28th 2022, the Management Board of Grupa Azoty S.A. announces that the release date for the consolidated H1 2022 report has been changed from September 7th 2022 to September 28th 2022.
The release date for the interim report for the third quarter of 2022 remains unchanged, with the updated release dates for interim reports in 2022 provided below:
1. H1 2022 complete consolidated report: September 10th 2022.
2. Q3 2022 complete consolidated report: November 9th 2022.
Legal basis: Par. 80.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that the Management Board of Grupa Azoty Zakłady Azotowe Kędzierzyn S.A., the Company’s subsidiary, has made the following decision:
“On August 23rd 2022, the Management Board of Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. decided to scale down the operation of the Fertilizer Production Unit to the minimum capacity of 43% as of August 24th 2022. This decision is due to the extraordinary and unprecedented increase in natural gas prices.”
The current situation in the gas market, which determines the profitability of production activities, is extraordinary and completely beyond the control of the Grupa Azoty Group, and could not have been predicted.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on August 22nd 2022, in view of the extraordinary and unprecedented increase in natural gas prices, it decided to temporarily shut down the nitrogen fertilizer, caprolactam and polyamide 6 production units as of August 23rd 2022. The Company continues to produce catalysts, polyamide casings, humic acids, thermoplastic starch and concentrated nitric acid.
During the announced temporary shutdown of production units, investment and repair work will be carried out, including the scheduled overhaul of the Polyamide unit.
The current situation in the gas market, which determines the profitability of production activities, is extraordinary and completely beyond the control of the Company, and could not have been predicted.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that the Company’s subsidiary Grupa Azoty Zakłady Azotowe Puławy S.A. (the “Subsidiary”) has decided to temporarily reduce production as of August 22nd 2022 due to an extraordinary and unprecedented increase in natural gas prices. The Subsidiary will reduce its ammonia output to about 10% of capacity. Production activities in the Plastics and Agro Segments will be halted, with the exception of production of ammonium sulfate from the FGD Plant, NOXy®, Likam and PULNOX®.
During the announced temporary shutdown of the Subsidiary’s production units, investment and repair work will be carried out.
The information was released by the Subsidiary in Current Report No. 24/2022 of August 22nd 2022.
The current situation in the gas market, which determines the profitability of production activities, is extraordinary and completely beyond the control of the Grupa Azoty Group, and could not have been predicted.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on July
20th 2022 the Company entered into an agreement with VSB Holding GmbH of Dresden,
Germany, Janusz Franciszek Siemieniec (collectively the “Sellers”) and
Solarfarm Brzezinka Sp. z o.o. of Wrocław (“Solarfarm”) (the Company, the Sellers
and Solarfarm are collectively referred to as the “Parties”) to conduct
negotiations, on an exclusive basis, regarding the potential acquisition of
100% of shares in the share capital of Solarfarm Brzezinka sp. z o.o. (the “Agreement”).
The Parties expressed their interest in collaborating on a project to build the Brzezinka solar PV power plant with a capacity of approximately 270 MWp that is being developed by Solarfarm, comprising preparatory, construction and installation work, grid connection, commissioning and potential operation of the power plant (the “PV Project”). Once the Parties have agreed on the target business model and technical and economic parameters and once the conditions precedent agreed upon during negotiations have been met, the PV Project may be acquired by the Company or its subsidiary through acquisition of shares in Solarfar, unless the Parties agree on a different transaction model.
The Agreement sets out the terms and conditions of the negotiations to be conducted by the Parties on an exclusive basis with a view to closing the transaction and defining the terms of the collaboration, as well as the key parameters necessary for closing the transaction and enabling the collaboration, including the financial model and technical and economic parameters of the PV Project, the purchase price of Solarfarm shares, the price payment terms and price adjustment methods, if applicable.
If the transaction is closed, it will significantly contribute to achieving the goals outlined in the part of the Grupa Azoty Strategy 2021–2030 where it provides for the acquisition of own renewable energy sources.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Acting pursuant to Article 428.5 of the Commercial Companies Code, the Management Board of Grupa Azoty S.A. (the “Company”) presents, attached to this Current Report, its answers to the questions asked by a shareholder under Article 428.1 of the Commercial Companies Code during the Annual General Meeting of June 29th 2022.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 23/2016 of April 13th 2016 on the execution of an agreement with Polskie Górnictwo Naftowe i Gazownictwo S.A. (“PGNiG”), No. 22/2017 of June 21st 2017 on the execution of Individual Contracts with PGNiG, and No. 30/2019 of May 23rd 2019 on their extension, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on July 7th 2022 the Company and its subsidiaries: Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A., Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. and Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. (jointly: “Azoty Group Customers”) executed an annex to the framework gas supply agreement of April 13th 2016 and annexes to the Individual Contracts. As a result of the execution of the annexes to the Individual Contracts, PGNiG will remain the strategic supplier of gas fuel for the Azoty Group Customers until September 30th 2023. The total value of the annexes executed with the Azoty Group Customers for the term of extension of the Individual Contracts is estimated at PLN 13.04 billion. The pricing formula applied in the Individual Contracts is based on gas market price indices.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No.L 173/1, as amended).
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, a list of shareholders holding 5% or more of total voting rights at the Annual General Meeting held on June 29th 2022, specifying the number of voting rights conferred by the shares held by each shareholder, and their percentage share in the voting rights represented at the Annual General Meeting and in total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2021, item 1983, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions passed by the Company’s Annual General Meeting on June 29th 2022, together with the results of voting.
The documents voted on by the Annual General Meeting are available on the Company’s website at https://tarnow.grupaazoty.com/relacje-inwestorskie/walne-zgromadzenia. They have also been published with the Company’s separate and consolidated annual report for 2021 and attached to Current Report No. 16/2022 of June 2nd 2022.
In connection with the use of a computer system for voting and counting the votes, the Annual General Meeting decided not to appoint a Ballot Counting Committee.
The Annual General Meeting decided not to consider item 5 of the agenda ‘Resolution to abolish the secrecy of voting on the election of committees to be appointed by the Annual General Meeting’.
The Company’s Management Board also publishes, attached hereto, a draft resolution to adjourn the Annual General Meeting put forward by an entitled shareholder. The resolution was not passed by the Annual General Meeting.
Objections to Resolutions No. 5, 6 and 7 were raised by shareholders for the record in the minutes.
Legal basis: Par. 19.1.6–9 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 14/2021 of April 29th 2021, the Management Board of Grupa Azoty S.A. (the “Company”, the “Factoring Agent”) announces that on June 3rd 2022 the Company together with its subsidiaries: Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (jointly with the Company: the “Factorees”) executed with ING Commercial Finance Polska S.A. (the “Factor”) an Annex to the Reverse Factoring Agreement of April 29th 2021 (the “Annex to the Reverse Factoring Agreement”, and the “Reverse Factoring Agreement”).
As part of the amendments made by the Annex to the Reverse Factoring Agreement, the factoring limit has been increased from PLN 500m to PLN 800m (or its equivalent in EUR or USD).
The Factor’s claims under the Reverse Factoring Agreement are secured by a notarised statement of submission to enforcement made by the Company, for up to 120% of the Reverse Factoring Agreement amount as increased by the Annex to the Reverse Factoring Agreement.
Other material terms and conditions of the Reverse Factoring Agreement are presented in the Company’s Current Report No. 14/2021 of April 29th 2021.
The purpose of the Reverse Factoring Agreement is to finance operating activities, optimise interest expenses, help manage working capital and liquidity, and enhance the security of financing for the Grupa Azoty Group and its suppliers by establishing an umbrella structure of facility limit allocation and authorising the Company, acting as the Factoring Agent, to redistribute the facility limits and to allow its other subsidiaries to accede to the Reverse Factoring Agreement.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the draft resolutions to be considered and voted on by the Annual General Meeting of the Company convened for June 29th 2022, relevant for those resolutions that have not yet been published.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) hereby convenes an Annual General Meeting of the Company for June 29th 2022, at 10:00 am, at the Company’s registered office at ul. Kwiatkowskiego 8, Tarnów, Poland, in conference room 57/58, 1st floor. For more details, see the Notice of the Annual General Meeting attached as an appendix hereto.
Legal basis: Par. 19.1.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 13/2022 of May 20th 2022, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on May 26th 2022 the Company’s Supervisory Board gave a favourable opinion on the proposal of the Company’s Management Board to allocate the entire net profit earned by the Company in 2021, in the amount of PLN 191,789,688.13, to the Company’s statutory reserve funds, and a favourable opinion on the Management Board’s recommendation to the Annual General Meeting to allocate the entire net profit earned by the Company in 2021 to the Company’s statutory reserve funds.
A final decision on the appropriation of the 2021 profit will be made by the Annual General Meeting.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Grupa Azoty S.A. (the “Company”) announces that on May 20th 2022 its Management Board passed a resolution to recommend that the Company’s entire net profit for the financial year 2021, of PLN 191,789,688.13 (one hundred and ninety one million, seven hundred and eighty nine thousand, six hundred and eighty eight złoty 13/100) be allocated to the Company’s statutory reserve funds.
In 2021, the Company and its subsidiaries completed the development of the “Azoty Group Strategy for 2021-2030”. The Strategy aims to implement the mission and vision of the Grupa Azoty Group (the “Group”), according to which the Group is to manufacture fertilizers, plastics and chemical products in harmony with the environment, improve the well-being of people living in Europe and actively contribute to building the continent’s food security, as a supplier of effective solutions and reliable manufacturer of fertilizers, plastics and green chemistry.
The Strategy envisages further pursuit of the ongoing investment projects, in particular the development of the new business segment of Polyolefins through the implementation of the Polimery Police project, and also commencement of further important projects, relating especially to the climate and energy transition aimed at lowering environmentally harmful emissions through reduced consumption of coal, decarbonisation, and development of RES and zero-carbon sources. These goals are to be achieved primarily through the “Green Azoty” project, which provides for diversification of feedstocks towards green sources, ESG strategy implementation and reporting, implementation of RES solutions, efforts aimed at decarbonisation and reduction of environmentally harmful emissions, as well as implementation of research and development work in line with the principles of the European Green Deal. Under the Green Azoty project, capital expenditure of approximately PLN 2.7 billion is planned to be spent on green and decarbonisation projects until 2030. The implementation of the Green Azoty project will result in a reduction of CO2 emissions from in-house energy generation by over one third and of coal consumption by almost two thirds by 2030 relative to the current levels, translating into a decrease of over 800,000 tonnes annually in carbon emissions from the Group’s production units.
In view of the above, the Management Board recommends that the entire net profit for 2021 be retained by the Company. By retaining earnings, the Company will secure financing for the implementation of its planned investment projects, with particular focus on those related to energy transition.
In order to implement the resolution, the Management Board will request the Supervisory Board to assess the proposal and the General Meeting to decide on the allocation of net profit for the financial year 2021.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes the estimated selected consolidated financial results of the Grupa Azoty Group for the first quarter of 2022.
Comments on the results for the first quarter of 2022
In the first quarter of 2022, the Grupa Azoty Group generated consolidated revenue of PLN 6,827m, EBITDA of PLN 1,335m and EBITDA margin of 19.6%.
All business segments delivered positive EBITDA figures in the first quarter od 2022.
The Agro Segment made the largest contribution to the Group’s EBITDA for the quarter. The Group’sperformance mainly benefited from significantly higher prices of chemicals, fertilizers and plastics. The factors with a negative effect on the Group’s results in the period included lower sales volumes and higher prices of raw materials. The first quarter of 2022 is another period marked by continued imbalance between supply and demand in the markets caused by the post-pandemic economic recovery, additionally exacerbated by Russia’s war on Ukraine.
Main performance drivers in the key segments:
Agro
The Agro Segment recorded higher prices of all raw materials and feedstocks used in production (including a nearly five-fold increase of the price of natural gas), leading to higher prices of fertilizer products. The prices of both raw materials and products were affected by the economic situation in Europe in the wake of Russia’s invasion of Ukraine, which had an adverse effect on the balance of supply and demand, especially as regards raw materials, materially reducing the availability of products on the market in the peak of the fertilizer application season. The Group’s sales volumes fell, largely as a consequence of lower output of compound fertilizers due to the failure of power steam generators at the Company’s subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (“Grupa Azoty Police”). On a consolidated basis, these negative financial consequences were mitigated by measures taken to enable the use, while the failure lasted, of some of Grupa Azoty Police’s commodities contracted at prices lower than spot prices paid by the other Group companies. The Agro Segment’s significant share in the Group’s consolidated results is attributable to the seasonality of mineral fertilizers’ application and growing demand for fertilizers applied in spring, observed in the first quarter of each year. The Agro segment was also affected by restrictions on imports of fertilizers manufactured in Russia, as a result of the sanctions introduced following the launch of Russia’s assault on Ukraine, as well as by reduced fertilizer ouput by European competitors.
In the first quarter of 2022, in view of production shutdowns at European producers and the soaring price of the main feedstock (natural gas), the key to the strong performance of the Agro segment was the strategy to maximise the Group’s nitrogen fertilizer output while maintaining product prices at one of the lowest levels in the European Union.
In the first quarter of 2022, the Agro Segment delivered an EBITDA margin of 19.3%, compared with 12.4% in the corresponding period of the previous year.
Chemicals
The Chemicals Segment recorded a rise in prices of products and raw materials used in their production. The growth rate of the segment’s product prices was the largest in the case of NOXy, melamine, technical-grade urea and sulfur. The rapid increase of sulfur prices is a consequence of higher crude oil prices and logistical problems associated with Russian ports and constraints in deliveries made via Black Sea ports. In the case of melamine, high prices are driven by rising prices of natural gas, just like in the case of NOXy prices. The prices of technical-grade urea were also in an upward trend and Russia’sinvasion of Ukraine raised concerns of supply disruptions. Sales volumes in almost each of the segment’s product groups were lower.
In the first quarter of 2022, the Chemicals Segment reported a strong year-on-year increase in EBITDA. The EBITDA margin rose from 9.9% in the first quarter of 2021 to 21.0% in the first quarter of 2022.
Plastics
The Plastics Segment saw higher prices of raw materials (benzene, phenol) and products. The sales volumes of the segment’s key product – natural polyamide – grew year on year. Demand from target application markets was good, except for the automotive sector’s continuing problems with the availability of microprocessors, resulting in production stoppages at automotive plants in Europe. The situation was aggravated by Russia’s invasion of Ukraine, leading to production stoppage by automotive companies in Russia and a marked decline in the availability of components from eastern directions.
The segment’s EBITDA margin for the period reached 10.9%, which means an over twofold improvement compared with the corresponding period of the previous year, when it stood at 4.1%.
The amounts presented above are estimates and may be subject to change. The final figures will be presented in the consolidated report for the first quarter of 2022, scheduled to be published on May 25th 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that the full-year report of the Company for 2021 and the consolidated full-year report of the Company’s Group for 2021 have been supplemented with the document “Management Board Representation 2021” attached to this Current Report, replacing the documents “Management Representation SFS GA Tarnów 2021” and “Management Representation CFS GA Tarnów 2021”, which were attached by mistake.
The information and financial data contained in the full-year reports issued by the Company on April 27th 2022 remains unchanged.
Legal basis: Par. 15.4 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 12/2021 of April 17th 2021 regarding dismissal by the Regional Court in Kraków, 9th Commercial Division, of a Shareholder’s claim to repeal Resolution No. 5 of the Extraordinary General Meeting of Grupa Azoty S.A. (the “Company”) of August 20th 2022 to approve certain legal transactions that may result in the disposal of current assets of the Company, the Management Board of the Company announces that on April 28th 2022 the Court of Appeals in Kraków passed a judgment dismissing the Shareholder’s appeal, thus upholding the decision on the merits issued by the court of first instance.
The judgment is final.
Legal basis: Par. 19.1.10 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 12/2022 of April 8th 2022 issued by the Company’s subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”) to report completion of the repair of the equipment failure announced by GA Police in Current Report No. 6/2022 of March 9th 2022, Current Report No. 7/2022 of March 21st 2022 and Current Report No. 8/2022 of March 25th 2022, the Management Board of Grupa Azoty S.A. (the “Company”) announces that the adverse financial effect of the failure for the Company’s Group is estimated at PLN 34.2m.
The adverse financial effect of the equipment failures comprises repair costs and lost profits on sales of compound fertilizers, titanium white and nitrogen products (urea and urea solutions and ammonia), which would have likely been realised under normal operation.
At the consolidated level, the financial effect of the equipment failure was reduced through measures taken to enable utilisation of some of GA Police’s energy resources by other Group companies for the duration of the failure.
The amounts presented above are estimates and may be subject to change.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached hereto, estimates of selected consolidated financial results of the Grupa Azoty Group for the fourth quarter of 2021 and for the whole of 2021.
Comments on the results for the fourth quarter of 2021
In the fourth quarter of 2021, the Grupa Azoty Group generated consolidated revenue of PLN 5,484m and EBITDA of PLN 887m, with EBITDA margin at 16.2%.
All key business segments delivered positive EBITDA in the period and reported year-on-year improvement, reflecting strong demand for plastics and chemical products.
The largest contributor to the Grupa Azoty Group’s consolidated EBITDA for the fourth quarter of 2021 was the Chemicals segment, which reported the best performance in its history. Its contribution to the consolidated EBITDA for the fourth quarter of 2021 grew to 43.3%, from 19.7% in the fourth quarter of 2020. The Plastics segment also increased its contribution to the consolidated EBITDA, from 1.3% to 7.9%, while the share of Agro Fertilizers fell to 40.0%, compared with 52.5% in the same period of the previous year.
The fourth quarter of 2021 saw an uptrend in the selling prices of fertilizers, fuelled by a rapid and very strong price growth for the key raw materials used in fertilizer production, especially natural gas, but also phosphate rock and potassium salt, which brought about an unprecedented surge in production costs.
The Company’s subsidiary, Grupa Azoty Zakłady Azotowe Puławy S.A., recognised an impairment loss on non-current assets in the Plastics segment, and on April 1st 2022 the Company announced its effect on the consolidated financial statements for 2021, i.e. a decrease of PLN 288m in the Group's consolidated operating profit. In accordance with the Grupa Azoty Group’s accounting policy, the recognition of impairment, which is a non-cash item, had no impact on the Company's consolidated EBITDA.
Main performance drivers in the key segments:
Agro Fertilizers
The performance of the Fertilizer-Agro Segment was driven by high prices of raw materials, in particular natural gas (the key feedstock in the production of fertilizers), which rose by over 400% year on year. Increased selling prices in all fertilizers groups had a positive effect on the segment’s results, despite a decline in sales volumes, in particular in the case of compound fertilizers.
The increased fertilizer prices resulted from higher production costs and reflected the pricing trends seen among other European producers. Thanks to the measures taken by Grupa Azoty to secure supplies to satisfy fertilizer demand on the domestic market, fertilizer prices in Poland in the fourth quarter of 2021 were among the lowest in the European Union.
In the fourth quarter, the Grupa Azoty Group did not stop or limit fertilizer production at its plants.
With a significant growth of raw material costs, EBITDA margin in the Agro Fertilizers segment was 11.8%, compared with 10.5% the year before.
Chemicals
High price growth dynamics were seen in all product groups in the Chemicals segment, with the strongest rise reported for melamine, technical-grade urea and NOXy. The segment's performance benefited from improved sales volumes and increased product price levels, which more than offset a negative impact of higher raw material prices.
As a result, the Chemicals segment reported a strong year-on-year improvement in EBITDA in the fourth quarter of 2021 , resulting in a more than twofold growth of EBITDA margin, from 9.1% in the fourth quarter of 2020 to 21.1% in the fourth quarter of 2021.
Plastics
A key development with the largest positive effect on the Plastics segment's performance in the fourth quarter of 2021 was higher caprolactam and polyamide prices. The period saw a decline in demand from the key consumer of plastics, i.e. the automotive sector, but it was offset by continuing strong demand from other sectors. Two negative drivers of the segment's results in the period were lower sales volumes and high raw material prices, mainly for benzene and phenol.
However, the Plastics segment felt the economic recovery in the fourth quarter 2021: its EBITDA margin for the period reached 14.5%, which means an over tenfold improvement compared with the corresponding period of the previous year, when it stood at 1.3%.
Key performance drivers in 2021:
The key development driving the Grupa Azoty Group’s performance in 2021 was growing prices of raw materials and products. A steady economic recovery was seen during the year as the impact of the COVID-19 pandemic was lessening. At the same time, demand-supply imbalances were apparent as a result of supply chain disruptions in the raw material and product markets.
In 2021, Grupa Azoty generated consolidated revenue of PLN 15,901m (2020: PLN 10,525m) and EBITDA of PLN 1,953m (2020: PLN 1,323m), with EBITDA margin at 12.3%(2020: 12.6%).
The Group’s performance improved as a result of business diversification, with nearly half of the EBITDA figure coming from the Chemicals and Plastics segments. In the key Agro Fertilizers segment, the gas price surge to historic highs brought down EBITDA and EBITDA margin by 6.0% and 4.1 pp, respectively.
The amounts presented above are estimates and may be subject to change. The final figures will be presented in the consolidated report for 2021, which is scheduled to be published on April 27th 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, L 173/1 as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces the expected effect of a one-off non-cash item on the Company’s consolidated financial statements for 2021.
Further to Current Report No. 5/2022 issued on April 1st 2022 by the Company’s subsidiary Grupa Azoty Zakłady Azotowe Puławy S.A. “Grupa Azoty Puławy”) regarding Grupa Azoty Puławy’s decision ofApril 1st 2022 to recognise an impairment loss of PLN 264m that was based on the results of an impairment test of non-current assets of the cash generating unit (CGU) Plastics, the Company announces that the event will affect the Company’s consolidated financial statements for 2021 and reduce its consolidated operating profit or loss by PLN 288m.
The impairment loss is a non-cash item and has no impact on the liquidity position of the Company or its Group.
As the audit of the Company’s financial statements for 2021 has not yet been completed, the amount is not final and may be subject to change. The annual report of the Company will be issued on April 27th 2022.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 19/2021 issued on May 31st 2021, the Management Board of Grupa Azoty S.A. (the “Company”, the “Factoring Agent”) announces that on March 31st 2022 it executed, together with the Company subsidiaries Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (together with the Company: the “Factorees”), an annex to the supply financing agreement of May 31st 2021 (the “Annex to the Reverse Factoring Agreement”, the “Reverse Factoring Agreement”) signed with Pekao Faktoring Sp. z o.o. (the “Factor”).
The amendments introduced by the Annex to the Reverse Factoring Agreement include an increase of the facility amount from PLN 250m to PLN 550m (or its equivalent in EUR or USD), extension of the availability period of the Reverse Factoring Agreement amount until November 30th 2022, replacement of the LIBOR 1M reference rate for financing in USD with the CME Term SOFR 1M rate, and establishment of the supplier financing option until the payment deadline.
Security for the Factor’s claims required under the Reverse Factoring Agreement is the Company’s notarised declaration of submission to enforcement for up to 120% of the Reverse Factoring Agreement amount increased by the Annex to the Reverse Factoring Agreement.
Other material terms and conditions of the Reverse Factoring Agreement are presented in the Company’s Current Report No. 19/2021 of May 31st 2021.
The purpose of the Reverse Factoring Agreement is to finance operating activities, optimise interest expenses, help manage working capital and liquidity, and enhance the security of financing for the Grupa Azoty Group and its suppliers by establishing an umbrella structure of facility limit allocation and authorising the Company, acting as the Factoring Agent, to redistribute the facility limits and to allow its other subsidiaries to accede to the Reverse Factoring Agreement as clients.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 15/2021 issued on April 29th 2021, the Management Board of Grupa Azoty S.A. (the “Company”, the “Factoring Agent”) announces that on March 31st 2022 it executed, together with the Company subsidiaries Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (together with the Company: the “Factorees”), an annex to the payment services and financing agreement of April 29th 2021 (the “Annex to the Reverse Factoring Agreement”, the “Reverse Factoring Agreement”) signed with CaixaBank S.A. Polish Branch.
The amendments introduced by the Annex to the Reverse Factoring Agreement include an increase of the facility amount from PLN 500m to PLN 800m (or its equivalent in EUR or USD), extension of the availability period of the Reverse Factoring Agreement amount until April 29th 2023, change of the Bank’s margins on the financing in PLN and USD in accordance with the standards adopted in other agreements of this type, and establishment of the supplier financing option until the payment deadline using the split payment mechanism.
The Bank’s claims under the Reverse Factoring Agreement are secured by a notarised statement of submission to enforcement made by the Company, for up to 120% of the Reverse Factoring Agreement amount increased by the Annex to the Reverse Factoring Agreement.
Other material terms and conditions of the Reverse Factoring Agreement are presented in the Company’s Current Report No. 15/2021 of April 29th 2021.
The purpose of the Reverse Factoring Agreement is to finance operating activities, optimise interest expenses, help manage working capital and liquidity, and enhance the security of financing for the Group and its suppliers by establishing an umbrella structure of facility limit allocation and authorising the Company, acting as the Factoring Agent, to redistribute the facility limits and to allow its other subsidiaries to accede to the Reverse Factoring Agreement as clients.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) has identified potential risks that may have a significant impact on future financial performance of the Company and its Group (the “Grupa Azoty Group” or the “Group”) in the wake of the Russian invasion of Ukraine:
1. Potential risk of disruption in natural gas supply to Grupa Azoty Group companies.
Natural gas is supplied to the Group under an agreement with Polskie Górnictwo Naftowe i Gazownictwo S.A. and, for the time being, the supply is continuing without any disruption. The Grupa Azoty Group keeps monitoring the gas supply situation and preparing contingency plans in case it has to reduce production in response to any supply constraints. The situation may change depending on decisions taken by the fuel supplier and the operator of the Polish gas transmission network.
2. Risk associated with the prices and availability of strategic raw materials supplied from the territory of Ukraine, as well as from the countries on which the sanction regime has been imposed – Russia and Belarus.
This risk, concerning the supplies of propylene and potassium chloride, may materialise as a result of reduced availability, price rises or logistical issues.
Possible disruptions may also affect the availability of other raw materials, but as at the date of this report the Company has not identified any material risks that could affect its ability to procure supplies from alternative sources.
3. Potential risk to timely implementation of projects carried out at the Grupa Azoty Group due to possible issues related to unavailability or constrained availability of contractor staff following the general mobilisation order in Ukraine.
4. Increased risk of interest rate rises and depreciation of the Polish currency against the euro and US dollar sparked by the current economic turbulence.
In 2021 sales to Ukraine accounted for 2.2% of the Grupa Azoty Group’s consolidated revenue and were mainly sales of mineral fertilizers. Sales to the Russian and Belarusian markets did not exceed 1% of the Group’s consolidated revenue.
The Group is not currently selling any products to Russia or Belarus.
As for supplies to the Ukrainian market, they have been significantly curtailed since the martial law was declared in Ukraine.
The Grupa Azoty Management Board is monitoring the political and economic situation in the wake of the Russian invasion of Ukraine, analysing its impact on the business of the Company and the Group.
If any new developments with a potentially significant impact on the Grupa Azoty Group’s financial performance and economic standing are identified, they will be promptly disclosed to the public.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 1/2022 of January 25th 2022, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on January 28th 2022 Grupa Azoty Polyolefins S.A., a subsidiary of the Company (the “Subsidiary”), executed Annex 3 to amend the turnkey engineering, procurement and construction contract for the Polimery Police project of May 11th 2019 ( the “EPC Contract”) (see Current Report No. 28/2019 of May 11th 2019) between the Subsidiary and Hyundai Engineering Co., Ltd. (the “Contractor”).
Annex 3 provides for, among others:
The execution of Annex 3 will not cause the budget of the Polimery Police project (amounting to USD 1,837,998 million) to be exceeded as the increase in the Contractor’s fee will be financed from the project contingency reserve.
The Company’s Management Board also announces that the condition necessary for execution of Annex 3 to the EPC Contract, specified in Current Report No. 1/2022 of January 25th 2022, i.e., obtaining the consent of the Subsidiary’s General Meeting on January 28th 2022, has been fulfilled.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Grupa Azoty S.A. (the “Company”) will announce its 2021 full-year results and 2022 interim results as per the following schedule:
1. First and third quarter interim results:
2. Half-year interim results:
3. Full-year results:
The 2021 consolidated report on payments to governments will be released on April 27th 2022.
Furthermore, the Company announces that no separate quarterly results will be published by the Company, as permitted under Par. 62.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757) (the “Regulation”). The consolidated quarterly reports will incorporate quarterly condensed consolidated financial statements and quarterly financial information.
Also, the Company will not publish a separate (non-consolidated) half-year report, as permitted under Par. 62.3 of the Regulation.
Further, the Company will not publish separate or consolidated quarterly results for Q4 2021 and Q2 2022, as permitted under Par. 79.2 of the Regulation.
Legal basis: Par. 80.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on January 25th 2022 a resolution was passed by the Management Board of Grupa Azoty Polyolefins S.A., a member company of the Grupa Azoty Group (the “Subsidiary”), concerning conditional conclusion of an annex to amend the turnkey engineering, procurement and construction contract for the Polimery Police project of May 11th 2019 (the “EPC Contract”) (see Current Report No. 28/2019 of May 11th 2019) between the Subsidiary and Hyundai Engineering Co., Ltd. (the “Contractor”).
Following a formal review and assessment of the substance of the Proposed Amendments, the Management Board of the Subsidiary decided to accept the terms agreed between the Subsidiary and the Contractor and conclude Annex 3 to the EPC Contract (“Annex 3”).
The Proposed Amendments were communicated by the Company in Current Reports No. 29/2021 of August 27th 2021, No. 36/2021 of November 10th 2021, and No. 40/2021 of November 16th 2021.
Among other things, Annex 3 provides for:
The conclusion of Annex 3 will not cause the budget of the Polimery Police project to be exceeded as the increase in the Contractor’s fee will be financed from the project contingency reserve.
The Management Board of the Company points out that Annex 3 is a conditional agreement, subject to the grant of relevant approvals by the Subsidiary’s corporate bodies.
The proposal to be submitted to the General Meeting of the Subsidiary was endorsed by its Supervisory Board on January 25th 2022.
Further steps related to the conclusion of Annex 3 will be announced by the Company in separate current reports.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 17(1) of MAR – Inside information
Further to Current Report No. 7/2018 of March 12th 2020 and Current Report No. 59/2020 of December 29th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 20th 2021 the Companyand its subsidiaries Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (jointly the “Consumers”) signed with Polska Grupa Górnicza S.A. of Katowice (“Seller”) bilateral amendment agreements (the “Amendment Agreements”) to coal sale contracts (the “Contracts”).
Under the Amendment Agreements:
The subject matter of the Contracts is the sale of thermal coal produced at the Seller’s mines and intended for consumption at the Customers in quantities specified in the respective Contracts, based on uniform business terms for the Customers. The total estimated value of all the Contracts following the execution of the Amendment Agreements is approximately PLN 202.7m (VAT exclusive) per annum.
The Contracts will continue to be considered material to the Company given that the Seller is a strategic supplier of thermal coal to Grupa Azoty, and the Contracts will satisfy a material portion of demand for such coal; in particular, they will cover total demand from Grupa Azoty Zakłady Chemiczne Police S.A and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A., as well as up to 90% of demand from Grupa Azoty S.A. They will also supplement up to about 10% of Grupa Azoty Zakady Azotowe Puławy's demand not covered by other contracts.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 1st 2021 it was notified that Grupa Azoty Zakłady Azotowe Kędzierzyn S.A., a subsidiary of the Company, had entered into a propylene purchase contract (the “Contract”) with KNC Trading SA of Geneva, Switzerland.
The Contract has been concluded for a definite term from October 1st 2021 to December 31st 2025. The value of the Contract in this period is estimated at EUR 505m (i.e. approximately PLN 2.38bn at the mid exchange rate quoted by the National Bank of Poland on the date of the Contract). Deliveries of the contracted propylene are to be made according to an agreed schedule and on agreed commercial terms.
The terms and conditions of the Contract do not differ from standard terms and conditions used in contracts of this type, including with respect to liquidated damages.
Information on the execution of the Contract has been classified as inside information by the Company as it refers to securing long-term supplies of propylene, a key feedstock used in the OXO business of Grupa Azoty Zakłady Azotowe Kędzierzyn S.A.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended) (MAR).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Acting pursuant to Article 428.5 of the Commercial Companies Code, the Management Board of Grupa Azoty S.A. (the “Company”) presents, attached to this Current Report, its answers to the questions asked by a shareholder under Article 428.1 of the Commercial Companies Code during the Extraordinary General Meeting of November 15th 2021.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 16th 2021 the general contractor for the Polimery Police project, Hyundai Engineering Co., Ltd. (“HEC”), submitted to Grupa Azoty Polyolefins S.A., a company of the Grupa Azoty Group (the “Subsidiary”) a supplement (the “Supplement”) to the letter of August 27th 2021, as reported by the Company in Current Report No. 29/2021 of August 27th 2021, concerning the initiation of a procedure to amend the engineering, procurement and construction contract for the Polimery Police project of May 11th 2019 (the “Polimery Police Project”) (the “EPC Contract”).
In accordance with the Supplement, HEC proposed the following additional amendments: (1) to extend the Polimery Police Project timescale by a further 15 days and (2) to increase the sum payable under the EPC Contract by an additional EUR 12.7m.
The reason for submitting the Supplement according to HEC is the impact of the COVID-19 pandemic on the execution of the Polimery Police Project.
The Supplement will be thoroughly reviewed and assessed in terms of its appropriateness under the EPC Contract and under other agreements between the Subsidiary and HEC, as well as in the light of relevant facts. Following the review, a decision will be made whether or not to include the amendments to the EPC Contract requested in the Supplement within the scope of the ongoing negotiating process.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, a list of shareholders holding 5% or more of total voting rights at the Extraordinary General Meeting held on November 15th 2021, specifying the number of voting rights conferred by the shares held by each shareholder, and their percentage share in the voting rights represented at the Annual General Meeting and in total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2021, item 1983)
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions passed by the Company’s Extraordinary General Meeting on November 15th 2021, together with the results of voting on the resolutions.
The documents voted on by the Extraordinary General Meeting are available on the Company’s website at http://tarnow.grupaazoty.com/pl/relacje/walne.html and attached to Current Report No. 31/2021 of October 15th 2021.
In connection with the use of a computer system for voting and counting the votes, the Extraordinary General Meeting decided not to appoint a Ballot Counting Committee.
The Extraordinary General Meeting did not leave any items of the planned agenda unaddressed. During the Extraordinary General Meeting, no objections were raised to be recorded in the minutes.
Legal basis: Par. 19.1.6 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 15th 2021, by Resolution No. 5 of the Extraordinary General Meeting, Mr Janusz Podsiadło was appointed to the Company’s Supervisory Board of the 11th term of office.
The resolution became effective upon adoption.
Mr Janusz Podsiadło was appointed to the Company’s Supervisory Board following a by-election held to appoint a member to the Supervisory Board of the 11th term of office from among persons elected by the Company’s employees.
The Management Board further announces that the new member of the Supervisory Board Janusz Podsiadło made a representation to the effect that he is not engaged in any activities competing with the Company’s business, nor is he a partner in any competing partnership under civil law or any other type of partnership, a shareholder in any competing incorporated company or a member of a governing body of any other competing legal entity.
The representation received by the Company includes a statement to the effect that the new Member of the Supervisory Board is not entered in the Register of Insolvent Debtors maintained pursuant to the Act on the National Court Register.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 29/2021 of August 27th 2021, the Management Board of Grupa Azoty S.A. (the“Company”) announces that upon completion of the formal and substantive assessment of the amendments proposed by Hyundai Engineering Co., Ltd (the “General Contractor”) to the engineering, procurement and construction contract for the Polimery Police project, dated May 11th 2019 (the “EPC Contract”), the Management Board of Grupa Azoty Polyolefins S.A., a member of the Company’s Group (the “Subsidiary”), resolved on November 10th 2021 to approve the instructions and strategy for negotiations with the General Contractor, whereby the Subsidiary will proceed to negotiating the proposed amendments to the EPC Contract.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Reports No. 30/2021 and No. 31/2021 of October 15th 2021, the Management Board of Grupa Azoty S.A. (the “Company”), in connection with the Extraordinary General Meeting to be held on November 15th 2021 (the “EGM”) and the release on October 28th 2021 of the Grupa Azoty Strategy for 2021−2030, publishes, attached hereto, the updated statement of compliance by the Company with the principles of the Best Practice for WSE Listed Companies 2021 (item 8 of the proposed agenda of the EGM).
The document will be published on the Company’s website as part of the materials concerning the matters to be discussed by the Extraordinary General Meeting convened for November 15th 2021.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on October 28th 2021 the Management Board adopted and the Supervisory Board approved the Grupa Azoty Strategy for 2021–2030 (the “Strategy”).
The new Strategy is our response to the major challenges faced by today’s industry from the perspective of one of the leading players in the fertilizer and chemical sector in Europe and highlights sustainable development and corporate social responsibility as areas of strategic importance to Grupa Azoty.
Grupa Azoty’s Mission, Vision and Values until 2030
By 2030, Grupa Azoty will become an effective, flexible, integrated and division-based Group with a production-focused business in Europe.
Mission 2030
In harmony with the environment, we manufacture fertilizers, plastics and chemical products.
We improve the well-being of people who live in Europe and actively contribute to building our continent’s food security.
Vision 2030
Grupa Azoty is a supplier of effective solutions and a reliable manufacturer of fertilizers, plastics and green chemical products
Defining a new mission and vision and presenting the values, objectives and plans until 2030, the Strategy identifies the following elements:
The Strategy addresses the challenges posed before today’s industry by the European Green Deal. Specific initiatives, including those focused on environmentally friendly captive energy generation, the need to reduce emissions and decarbonise the business, are presented by the Company in ‘Green Azoty’, our strategic corporate project, based around three pillars:
Management strategy based on Business Segments
Grupa Azoty’s activity until 2030 will focus on Business Segments defined within the three key business areas of AGRO, PLASTICS and CHEMICALS. The new organisational model will help maximise synergies through integration of selected support functions and implementation of a management system based on key Business Segments. Key development directions defined for the individual Business Segments will be part of the ‘Green Azoty’ strategic project.
AGRO
Grupa Azoty’s priority in the AGRO Segment will be to strengthen its position as a leader in fertilizer production and sales through portfolio expansion. By 2030, the Group will be perceived not only as a supplier of fertilizers, but also as a supplier of end-to-end fertilization systems. Grupa Azoty will seek to develop a comprehensive system of services dedicated to individual crops, comprising products supplied by the Group, from key macronutrients to micronutrients. The AGRO Segment’s offering will be developed in parallel with the ‘Farm to Fork’ strategy, which prioritises sustainable agriculture.
Plastics
As part of the PLASTICS – POLYAMIDE (PA) Segment, as an environmentally friendly manufacturer, Grupa Azoty will take steps to reduce the consumption of energy and raw materials and to expand its product portfolio in line with the circular economy concept.
Plastic products to be included in the Group’s mix will also be made from recycled plastics, sourced internally from Grupa Azoty’s own process units and from external suppliers.
In the POLYOLEFINS Segment, Grupa Azoty is implementing one of the largest capital investment projects in the European chemical industry, expected to position Poland among Europe’s leaders in polypropylene production. The purpose of the project is to construct an integrated chemical complex that would comprise a propane dehydrogenation (PDH) unit, polypropylene production unit, offshore gas terminal with logistics infrastructure, and auxiliary facilities and interconnections. Within the period covered by the 2030 Strategy, Grupa Azoty expects to complete the project and reach the full polypropylene production capacity.
Chemicals
The strategic priority in the TECH GRADE UREA segment will be to maintain a leading position in the sales of the segment’s products on the domestic market, implement initiatives geared towards operational excellence and keep aligning the portfolio with market needs.
The priority in the PIGMENTS segment will be to maintain customer trust and recognition of the Grupa Azoty brand, and to make timely deliveries of prime quality products.
In the OXOPLAST segment, exposure to changes in the regulatory framework, especially those pertaining to plasticizers, encourages Grupa Azoty to keep monitoring market needs on an ongoing basis, planning changes and taking appropriate steps to adjust its product portfolio.
Strategic business area – Energy
The primary objective of the Energy Segment is and will be to support Grupa Azoty’s core business by providing energy carriers powering its chemical processes and by supporting value creation areas while seeking to decarbonise the generation sources. As greenhouse gas emissions from energy generation account for approximately a half of Grupa Azoty’s total emissions, it is necessary to take steps to transform in-house heat and power generation, reduce energy consumption and improve the energy efficiency of chemical units.
Grupa Azoty’s key objectives in the Strategic Business Area – Energy:
- diversification of energy sources, followed by gradual phase-out of coal in favour of natural gas and renewables as alternative green sources in order to reduce the organisation’s carbon footprint,
- maximising synergies between energy generation and chemical processes, e.g. in the area of energy generation from steam created by chemical units,
- reduction of unit energy consumption rates, including 30% reduction of the energy intensity of the SMR process by 2024,
- implementing new technology solutions,
- aligning Group companies’ energy installations with the BAT conclusions.
The ‘Green Azoty’ strategic corporate project as the cornerstone of Grupa Azoty’s ESG Strategy
Grupa Azoty’s new business Strategy is driven by the energy transition to address climate change. Regulatory changes are seen as an opportunity to take action aimed at cutting harmful environmental emissions through reduced coal consumption, decarbonisation and development of renewable and zero carbon energy sources. Action taken by Grupa Azoty will mark the first step towards achieving carbon neutrality by 2050. Grupa Azoty’s objective is to cut the share of electricity from burning coal to less than 50% of total energy consumed in 2030.
Decarbonisation programme
Grupa Azoty understands the gravity of climate change and environmental degradation, which present a major threat to the modern world. Being an important player of the chemical industry, which is a source of large amounts of greenhouse gas emissions for reasons inherently related to the technologies employed, Grupa Azoty feels responsibility for slowing down the pace of the unfolding climate change.
Within the coming decade, Grupa Azoty is set to implement its own decarbonisation programme. Planned decarbonisation projects will allow Grupa Azoty to reduce its estimated CO2 emissions by over 800 thousand tonnes in 2030 compared with 2020.
Planned emission reduction rates in 2030 relative to 2020:
- 34% reduction in CO2 emissions from in-house energy generation
- 51% reduction in CO2 emissions from purchased electricity generation
- 65% reduction in coal consumption at Grupa Azoty
Planned capex on green and decarbonisation projects, including renewable energy projects, will be approximately PLN 2.7bn until 2030.
Grupa Azoty as a green energy producer
By 2030, Grupa Azoty will seek to implement technological solutions harnessing renewable energy, including solar PV, wind, biomass and waste heat from process units. These investments and upgrades will enable Grupa Azoty to achieve the status of a renewable energy producer.
The key strategic plans assume a 40% share of renewables in electricity generation mix of Grupa Azoty by 2030. The share of renewable energy sources in energy generation capex is assumed at 17.3%.
Actively participating in the development of Poland’s hydrogen market
The largest hydrogen producer in Poland and a major one in Europe, Grupa Azoty plans to actively engage in advancing the hydrogen market over the coming years and to participate in the delivery of the EU Hydrogen Strategy. As a member of the European Clean Hydrogen Alliance, in the coming years Grupa Azoty will take active part in the work to develop EU regulations that will classify hydrogen as a green fuel. In the period covered by the Strategy, Grupa Azoty will focus on research and development related to the production and application of green hydrogen.
Implementing R&D projects aligned with objectives of the European Green Deal
A significant part of Grupa Azoty’s research and development resources will be geared towards achieving climate targets. New R&D projects will focus on development in the areas of fertilizers, hydrogen, electric mobility, biodegradable plastics, circular economy, and carbon sequestration.
By 2024, Grupa Azoty plans to conduct studies to assess the feasibility of an SMR nuclear power plant project, which could help stabilise the energy mix dominated by renewables and ensure competitive energy pricing.
Financial strategy
A key strategic goal of Grupa Azoty in the area of finance is continued consolidation of its finance function to actively support management of the Grupa Azoty Group at the level of individual Business Segments.
The financing structure will be tailored to the needs and capabilities of the Grupa Azoty Group, enabling the execution of key capex projects. The main purpose of the financing structure is to provide short- and long-term sources of finance on competitive terms and in amounts sufficient to fund day-to-day operations, capex programmes and potential acquisitions.
The key financial goals include delivering an EBITDA margin of more than 16% by 2030 and achieving the net debt to EBITDA ratio below 3.0 by 2025.
The dividend policy of Grupa Azoty S.A. provides for continued ability to pay dividends once the strategic capex programme (including projects driving climate transition of the Grupa Azoty Group) has been completed, at a level above 40% of consolidated net profit.
Delivery of the Strategy will require adequate, stable sources of funding. Given the significant pipeline of strategic projects (in particular Polimery Police), additional finance needs to be secured for new projects.
Green funding in the form of bonds or credit facilities will be relied on to finance energy transition projects of the Grupa Azoty Group. In the first place, such projects will involve solar PV and wind sources developed on own land and energy efficiency improvement of production processes.
Funds granted under the National Recovery Plan and other planned support measures are to finance capital projects with lower rates of return, necessary to enable technological transformation.
Corporate financing roll-over will involve extension or conclusion of new corporate financing agreements providing the Group with necessary funding until 2030.
ESG Strategy
Sustainable development will be the Group’s priority over the 2030 time horizon, pursued through initiatives seeking to further environmental protection, social good and responsible corporate governance. Initiatives previously undertaken in these areas will be included in Grupa Azoty’s ESG Strategy, organised around five pre-defined strategic pillars:
Grupa Azoty reduces its environmental impact and changes its energy mix by identifying and managing climate risks. It guarantees efficient, innovative and environmentally friendly production while striving to identify the carbon footprint of all its products. Grupa Azoty will expand its sustainable product portfolio by promoting efficient use of raw materials and constantly reducing energy consumption in its production processes.
Grupa Azoty increases its positive impact on the social and economic environment, fosters relationships to educate and train future staff, expands the areas of social dialogue in keeping with the principle of Friendly Neighbourhood.
Grupa Azoty acts and expects its business partners to act in an ethical, socially responsible and environmentally sustainable manner. Grupa Azoty respects ethical codes and the principles of equality, following clear recruitment and promotion policies. It promotes diversity encompassing gender, education, age and professional experience with respect to all employees, applying the principles of equal treatment and non-discrimination.
Feedstock strategy
Given Grupa Azoty’s significant reliance on external suppliers, its key strategic objective in feedstocks is to ensure their secure and uninterrupted supplies, with intra-Group activities geared towards more efficient use of our own feedstock assets. The regulatory environment and our environmental stewardship will also play a vital role in shaping our procurement policy, which will be focused on increasing the share of green energy in Grupa Azoty’s energy mix and on gradually tightening control of the carbon footprint of externally sourced chemical raw materials.
Innovation strategy
Grupa Azoty perceives innovation-oriented projects as a remedy for regulatory changes and environmental trends as well as an opportunity to create competitive advantage. Exploration of the market with innovation in mind is done assuming specific rates of return, which facilitates continuous financial control of research projects. The research, development and innovation activities to be undertaken during the period covered by the Strategy will focus on developing the technologies applied and products offered by Grupa Azoty. Over the 2030 horizon, Grupa Azoty will focus on implementing innovation-oriented solutions within four areas: supporting corporate projects, developing an innovation system, innovation projects, and innovation geared towards minimising the impact of regulatory risks.
Planned R&D&I expenditure at Grupa Azoty in 2030 is estimated at 2%-3% of revenue. The profitability of the whole portfolio of new projects is assumed at IRR>15%.
Operational excellence strategy
Logistics
With goals of the European Green Deal in mind, logistic functions at Grupa Azoty will be adapted to enable delivery of the greenhouse gas emission reduction targets by advancing intermodal transport with a focus placed on environmentally friendly modes.
In the period covered by the Strategy, Grupa Azoty plans to further expand the sea port in Police and to develop the inland port in Kędzierzyn-Koźle. Also, its efforts seeking to exploit the potential of the Odra Waterway are to continue.
By 2030, Grupa Azoty plans to increase its cargo handling capacities by expanding the storage resources of Group companies, as part of which it wants to upgrade logistics of fertilizers and plastics, and by reducing the costs of using third-party storage facilities.
Capital assets management
The production asset management activities will seek to improve the energy efficiency of processes, e.g. by implementing new technology solutions, optimising management, modifying technologies to reduce energy consumption and diversifying energy sources towards natural gas and renewables.
IT
The priority in IT will be to achieve a uniform, coherent and integrated IT architecture and solutions for all Business Segments, which will help improve efficiency and service levels.
Details of the Strategy along with its assumptions regarding macroeconomic indicators can be found in the presentation attached to this current report.
The Management Board also announces that the Strategy presentation will be published on the Company’s website.
Legal basis: Article 17(1) of 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 of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached hereto, estimated selected consolidated financial results of the Grupa Azoty Group for the third quarter and the first nine months of 2021.
Despite a significant increase in gas prices in the third quarter of 2021, the Grupa Azoty Group’s consolidated EBITDA grew on the back of business diversification.
Factors with an adverse effect on the results in the nine months to September 30th and in the third quarter of 2021 included mainly higher prices of raw materials (chiefly gas, but also propylene, phenol, benzene and phosphate rock), and higher costs of electricity and CO2 emission allowances.
The Group’s consolidated EBITDA in the aforementioned periods was boosted by high prices of most products in the key segments (Fertilizers, Chemicals and Plastics) as well as higher total sales volumes in the Chemicals and Plastics segments. At the same time, the Group’s consolidated EBITDA was positively impacted by a higher-than-expected allocation of free carbon allowances, which was recognised in the estimated accounting for emission costs for the first half of 2021.
Main factors with a bearing on the Group’s financial performance in the third quarter of 2021 compared with the third quarter of 2020:
1. In the Agro Fertilizers segment:
The segment’s performance was hurt by soaring gas prices. The segment’s results were also driven by a year-on-year increase in prices and sales volumes of nitrogen, compound and speciality fertilizers. As a result, the segment’s EBITDA contracted year on year. Prices of fertilizers grew as a consequence of higher production costs. Production cuts at leading manufacturers also played a part. Despite historically high prices of gas, the Company and its subsidiaries did not halt or significantly reduce their fertilizer production, taking steps to secure demand for fertilizers primarily on the domestic market, which is treated as a priority.
2. In the Chemicals segment:
The year-on-year improvement in the Chemicals segment’s performance was attributable to sharp rises in prices of all products, particularly of melamine, OXO alcohols, plasticizers and sulfur, driven by growing demand. Margins were adversely affected by higher prices of raw materials and slightly lower sales volumes.
3. In the Plastics segment:
The segment’s performance was mainly driven by a year-on-year increase in margins along the entire product chain (benzene/phenol – caprolactam – polyamide 6), resulting from higher demand from target application markets despite the continuing problems experienced by the automotive industry due to shortage of electronic components. In addition, in the third quarter of 2021 the Company discontinued its polyoxymethylene business (POM) business and sold some of the related assets, which benefited the segment’s performance.
The amounts presented above are estimates and may be subject to change. The final results will be presented in the consolidated report for the third quarter and the nine months ended September 30th 2021, to be issued on November 9th 2021.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on October 22nd 2021 the Company was notified that on the same day the District Court for Kraków-Śródmieście in Kraków, 12th Commercial Division of the National Court Register, registered amendments to the Company’s Articles of Association.
The registered amendments to the Articles of Association were approved by Resolution No. 33 of the Company’s Annual General Meeting held on June 30th 2021 and announced in Current Report No. 25/2021 of June 30th 2021.
On September 6th 2021, the Company’s Supervisory Board adopted the consolidated text of the Company’s Articles of Association, reflecting the amendments approved by Resolution No. 33 of the Annual General Meeting of June 30th 2021.
The consolidated text of the Articles of Association is attached as an appendix to this current report.
The amendments to the Articles of Association are presented in detail in the appendix to this current report.
Legal basis: Par. 5.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the draft resolutions to be considered and voted on by the Extraordinary General Meeting of the Company convened for November 15th 2021, as well as documents relevant for those resolutions that have not yet been published.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Appendixes will be added.
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) hereby convenes an Extraordinary General Meeting of the Company for November 15th 2021, at 12:00 noon, at the Company’s registered office at ul. Kwiatkowskiego 8, Tarnów, Poland, in conference room 57/58, 1st floor. For more details, see the Notice of the Annual General Meeting attached as an appendix hereto.
Legal basis: Par. 19.1.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on August 27th 2021 Grupa Azoty Polyolefins S.A., member of the Company’s Group (the “Subsidiary”), received from Hyundai Engineering Co., Ltd. (the “Contractor”), the General Contractor under the contract for turnkey execution of the Polimery Police project of May 11th 2019 whose conclusion was announced by the Company in Current Report No. 28/2019 of May 11th 2019, as amended, including under an annex announced by the Company in Current Report No. 45/2020 of October 9th 2020 (the“EPC Contract”), a letter concerning initiation of a procedure to amend the EPC Contract (the “Amendment Proposal”) for the execution of the Polimery Police project (the “Polimery Police Project”).
The amendments to the EPC Contract proposed by the Contractor concern the following matters: (1) increase of the Contractor’s fee by a total of EUR 127.4m, (2) change of the Polimery Police Project execution schedule through extension of the Polimery Police Project execution period by 181 days, and (3) amendment to the EPC Contract’s appendix specifying, among others, the scope of work provided for in the EPC Contract. In the Contractor’s opinion, the reason for submitting the Amendment Proposal is in particular the impact of the COVID-19 pandemic on the execution of the Polimery Police Project.
The Amendment Proposal will be thoroughly reviewed and verified in terms of its appropriateness under the EPC Contract, in accordance with the procedure provided for in the EPC Contract, and under other agreements between the Subsidiary and the Contractor, as well as in the light of facts.
Further steps related to the Amendment Proposal will be announced by the Company in subsequent current reports at a later date.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes the estimated selected consolidated financial data of the Grupa Azoty Group for the second quarter and the first half of 2021:
Q2 2021:
Consolidated revenue: PLN 3,173m
EBIT: PLN 169m
EBITDA: PLN 361m
Net profit: PLN 168m
Results by segment:
Revenue of the Agro Fertilizers segment: PLN 1,642m
EBIT: PLN 71m
EBITDA of the Agro Fertilizers segment: PLN 154m
Revenue of the Chemicals segment: PLN 896m
EBIT: PLN 76m
EBITDA of the Chemicals segment: PLN 101m
Revenue of the Plastics segment: PLN 456m
EBIT: PLN 6m
EBITDA of the Plastics segment: PLN 26m
Revenue of the Energy segment: PLN 83m
EBIT: PLN 0m
EBITDA of the Energy segment: PLN 28m
Revenue of the Other Activities segment: PLN 96m
EBIT: PLN 16m
EBITDA of the Other Activities segment: PLN 52m
H1 2021:
Consolidated revenue: PLN 6,535m
EBIT: PLN 383m
EBITDA: PLN 766m
Net profit: PLN 254m
Results by segment:
Revenue of the Agro Fertilizers segment: PLN 3,661m
EBIT: PLN 250m
EBITDA of the Agro Fertilizers segment: PLN 415m
Revenue of the Chemicals segment: PLN 1,712m
EBIT: PLN 131m
EBITDA of the Chemicals segment: PLN 181m
Revenue of the Plastics segment: PLN 842m
EBIT: PLN -5m
EBITDA of the Plastics segment: PLN 33m
Revenue of the Energy segment: PLN 168m
EBIT: PLN -1m
EBITDA of the Energy segment: PLN 56m
Revenue of the Other Activities segment: PLN 152m
EBIT: PLN 8m
EBITDA of the Other Activities segment: PLN 81m
Compared with the first half od 2020, the Grupa Azoty Group’s EBITDA for the first half of 2021 were boosted mainly by higher prices of almost all products in the key segments (Fertilizers, Chemicals and Plastics) and higher sales volumes in the Chemicals and Plastics segments. Factors with an adverse effect on the results included lower sales in the Fertilizers Segment, as well as an increase in variable costs, caused mainly by higher prices of gas, phenol, propylene and benzene, higher prices of carbon allowances (relative to unhedged positions), as well as a lower amount of compensation paid to energy-intensive companies. At the same time, the Group’s EBITDA was positively impacted by an increase in the expected allocation of free carbon allowances, which was recognised in the estimated accounting for emission costs for the first half of 2021.
Main factors with a bearing on the Group’s financial performance in the second quarter of 2021 compared with the second quarter of 2020:
The segment’s performance benefited from higher prices of nitrogen, compound and speciality fertilizers, as a result of – on the one hand – pressure coming from higher prices of urea, which sets the price paths for other fertilizer products, mainly AN, and – the other hand – the conditions prevailing across global market, i.e. oversupply, low stocks and high prices of agricultural produce (wheat, maize, rape). The segment’s performance was adversly affected mainly by a major spike in natural gas prices.
In the Chemicals Segment, the year-on-year performance improvement was attributable to a solid growth in sales volumes (particularly plasticisers, melamine, NOXy and technical-grade urea) and prices of all key products of the segment. The margins were negatively impacted by strong increases in the prices of raw materials: propylene, terephthalic acid, phosphate rock.
The segment’s performance was buoyed by a year-on-year increase in the prices of polyamide due to higher demand on the main application markets. The segment was negatively impacted by higher prices of key raw materials for production, i.e. benzene and phenol, which came as a result of the products’ limited availability on the market (including as a consequences of plant failure at major manufacturers) and adverse supply and demand movements in Europe.
The amounts presented above are estimates and may be subject to change. The final results will be presented in the consolidated report for the first half of 2021, to be published on September 9th 2021.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached hereto, its answers to the questions asked by a shareholder during the Annual General Meeting on June 30th 2021, in accordance with Article 428.1 of the Commercial Companies Code.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, a list of shareholders holding 5% or more of total voting rights at the Annual General Meeting held on June 30th 2021, specifying the number of votes conferred by the shares held by each shareholder, and their percentage share in the votes represented at that Annual General Meeting and in the total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2020, item 2080, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions passed by the Company’s Annual General Meeting on June 30th 2021, together with the results of voting.
The documents voted on by the Annual General Meeting are available on the Company’s website at http://tarnow.grupaazoty.com/pl/relacje/walne.html. They were also published with the Company’s separate and consolidated full-year reports for 2020, and attached to Current Report No. 23/2021 of June 2nd 2021, as corrected on June 15th 2021.
In connection with the use of a computer system for voting and counting the votes, the Annual General Meeting decided not to appoint a Ballot Counting Committee.
The Annual General Meeting did not leave any items of the planned agenda unaddressed. Objections to Resolutions No. 2, 3, 5, 6, 7 and 9 were raised by shareholders for the record in the minutes.
Legal basis: Par. 19.1.6 and Par. 19.1.9 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes a correction of Current Report No. 23/2021 released on June 2nd 2021.
As a result of a mistake, one of the documents to be discussed at the Company’s Annual General Meeting convened for June 30th 2021, relevant for the resolutions to be adopted, was not made public in the aforementioned current report. The document is the independent auditor’s report on assessment of the Supervisory Board’s Report on Remuneration of Members of the Management Board and Supervisory Board for 2019 and 2020.
The document, attached hereto, was posted on the Company’s website at https://tarnow.grupaazoty.com/relacje-inwestorskie/walne-zgromadzenia on the date of convening the Annual General Meeting.
Legal basis: Par. 15.2 in conjunction with Par. 19.1.6 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Grupa Azoty S.A. (the “Company”) announces that on June 9th 2021 the Management Board decided that the Company’s activity in the polyoxymethylene (POM) business would be discontinued.
The plan is for the Company to exit the POM business not later than till August 31st 2021.
The analysis revealed that the POM business would not be economically viable in the foreseeable future, which is an indication that the Plastics Segment’s POM business should be discontinued and its selected assets should be sold.
Consolidated revenue from external sales of POM products in 2020 amounted to PLN 54.1m, and accounted for 0.5% Grupa Azoty S.A. revenue. The planned discontinuation of POM production will reduce the Company’s total CO2 emissions.
The decision to exit the POM business will have no impact on any other operations of the Plastics Segment.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the draft resolutions to be considered and voted on by the Annual General Meeting of the Company convened for June 30th 2021, as well as documents relevant for those resolutions that have not yet been published.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) hereby convenes an Annual General Meeting of the Company for June 30th 2021, at 10:00 am, at the Company’s registered office at ul. Kwiatkowskiego 8, Tarnów, Poland, in conference room 57/58, 1st floor. For more details, see the Notice of the Annual General Meeting attached as an appendix hereto.
Legal basis: Par. 19.1.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 16/2021 of May 5th 2021, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on May 31st 2021, the Company’s Supervisory Board gave a favourable opinion on the proposal of the Company’s Management Board for the Annual General Meeting to allocate the entire net profit for the financial year 2020 of PLN 125,627,538.01 to the Company’s reserve funds.
A final decision on the appropriation of the 2020 profit will be made by the Annual General Meeting.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”, the “Factoring Agent”) announces that on May 31st 2021, the Company and its subsidiaries: Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (the “Group Companies”, jointly with the Company: the “Factorees”) and BNP Paribas Faktoring Sp. z o.o. (the “Factor”) signed a PLN 500m (or EUR or USD equivalent) master factoring agreement (the “Factoring Agreement”) for indefinite term.
The facility under the Factoring Agreement was made available for the period of 12 months. The facility will be automatically extended for another period of 12 months based on the Factor’s decision communicated to the Factoring Agent no later than 180 days prior to the expiry of the current availability period.
The Factoring Agreement provides for the financing of amounts due to the Company and the Group Companies from their trading partners.
Under the Factoring Agreement, the Factor’s claims are to be secured with:
The Company is liable for repayment of all amounts due under the Factoring Agreement, while the Group Companies are liable for repayment of their respective liabilities under the Agreement.
The per annum interest rate under the Agreement is equal to the following reference rates: 1M WIBOR for financing denominated in the złoty, 1M EURIBOR for financing denominated in the euro, and 1M LIBOR for financing denominated in the US dollar, plus the Factor’s margin (if the reference rate is below 0, the Factor’s margin is the minimum rate).
The Factoring Agreement also imposes certain restrictions on the Company and the Group Companies, including restrictions on disposal or encumbrance of their material assets, granting loans and guarantees, paying dividends and incurring financial liabilities if a certain level of consolidated net debt to EBITDA is exceeded, which have been made consistent with the revolving credit facility agreement of April 23rd 2015, as amended by the amendment of June 29th 2018, referred to in the Company’s Current Report No. 25/2015 of April 23rd 2015 and Current Report No. 33/2018 of June 29th 2018.
The terms of the Factoring Agreement do not differ from standard terms used in agreements of such type.
The purpose of the Factoring Agreement is to finance operating activities, optimise interest expenses, help manage working capital and liquidity, and enhance the Group’s financial security through the umbrella nature of facility allocation and authorisation of the Company, as the Factoring Agent, to redistribute the facility, as well as to include new factorees which are the Company’s subsidiaries in the Factoring Agreement.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”, the “Factoring Agent”) announces that on May 31st 2021, the Company and its subsidiaries: Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (the “Group Companies”, jointly with the Company: the “Factorees”) and Pekao Faktoring Sp. z o.o. (the “Factor”) signed a PLN 250m (or EUR or USD equivalent) factoring agreement (the “Factoring Agreement”), as well as a PLN 250m (or EUR or USD equivalent) agreement for the financing of deliveries (the “Reverse Factoring Agreement”).
The Factoring Agreement and the Reverse Factoring Agreement were concluded for indefinite term. The facilities under those two Agreements will be available for a period of 12 months and will be automatically extended for another 12 months unless, prior to the facility expiry date, the Factor gives notice of intention not to extend them, whereby the Factoring Agreement or the Reverse Factoring Agreement will be terminated on 120 days’ notice with the facilities remaining available to the Factorees during the notice period.
The Factoring Agreement provides for the financing of amounts due to the Company and the Group Companies from trading partners, while the Reverse Factoring Agreement provides for the financing of amounts due to suppliers and service providers from the Company and the Group Companies.
Under the Factoring Agreement, the Factor’s claims are to be secured with:
Security for the Factor’s claims required under the Reverse Factoring Agreement is the Company’s notarised declaration of submission to enforcement for up to 120% of the amount of the facility under the Reverse Factoring Agreement.
In accordance with the Factoring Agreement and the Reverse Factoring Agreement, the Company is liable for repayment of all amounts due under each of the Agreements, while the Group Companies are liable for repayment their respective liabilities under the Agreements.
The per annum interest rate under each of the Agreements is equal to the following reference rates: 1M WIBOR for financing denominated in the złoty, 1M EURIBOR for financing denominated in the euro, and 1M LIBOR for financing denominated in the US dollar, plus the Factor’s margin (if the reference rate is below 0, the Factor’s margin is the minimum rate).
The Agreements also impose certain restrictions on the Company and the Group Companies, including restrictions on disposal or encumbrance of their material assets, granting loans and guarantees, paying dividends and incurring financial liabilities if a certain level of consolidated net debt to EBITDA is exceeded, which have been made consistent with the revolving credit facility agreement of April 23rd 2015, as amended by the amendment of June 29th 2018, referred to in the Company’s Current Report No. 25/2015 of April 23rd 2015 and Current Report No. 33/2018 of June 29th 2018.
The terms of the Factoring Agreement and the Reverse Factoring Agreement do not differ from standard terms used in agreements of such type.
The purpose of the Factoring Agreement and the Reverse Factoring Agreement is to finance operating activities, optimise interest expenses, help manage working capital and liquidity, and enhance the Grupa Azoty Group’s financial security through the umbrella nature of facility allocation and authorisation of the Company, as the Factoring Agent, to redistribute the facilities, as well as to include new factorees which are the Company’s subsidiaries in both the Factoring Agreement and the Reverse Factoring Agreement.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that at its meeting held on May 13th 2021 the Company’s Supervisory Board resolved to remove the following persons from the Management Board, with effect from May 17th 2021:
- Witold Szczypiński – Vice President of the Management Board,
- Artur Kopeć – Member of the Management Board.
At the same meeting, the Supervisory Board resolved to appoint Marek Wadowski to the Management Board of the new 12th term of office as its Vice President, with effect as of May 18th 2021.
The Supervisory Board also appointed Zbigniew Paprocki as Member of the Management Board of the new 12th term of office, with effect as of May 18th 2021.
The Supervisory Board, thus, validated the ballot held between March 22nd and April 12th 2021 to elect an employee representative to the Management Board of the 12th term of office and confirmed the election of Zbigniew Paprocki.
The Management Board further announces that Zbigniew Paprocki resigned as Member of the Supervisory Board on May 13th 2021.
The Management Board also announces that Marek Wadowski has made a representation to the effect that as of May 18th 2021 (i.e. on assumption of his responsibilities as Vice President of the Management Board), he will not be engaged in any activities outside Grupa Azoty S.A. that would be in competition with the Company’s business, nor will he be a partner or shareholder in any competing partnership or company or a member of a governing body of any other competing legal entity.
Zbigniew Paprocki has made a representation to the effect that he is not engaged in any activities conducted outside Grupa Azoty S.A. that would be in competition with the Company’s business, nor is he a partner or shareholder in any competing partnership or company or a member of a governing body of any other competing legal entity.
The appointed persons are not entered in the Register of Insolvent Debtors
maintained pursuant to the National Court Register Act.
A brief description of the newly appointed Management Board Members’ educational background, qualifications, previously held positions and employment records is attached to this current report.
Legal basis: Par. 5.4 and Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes the estimated selected consolidated financial data of the Grupa Azoty Group for Q1 2021:
Revenue: PLN 3,362.0m
EBITDA: PLN 405.1m
Net profit: PLN 85.9m
Results by segment:
Revenue of the Agro Fertilizers segment: PLN 2,018.8m
EBITDA: PLN 261.5m
Revenue of the Chemicals segment: PLN 815.3m
EBITDA: PLN 80.0m
Revenue of the Plastics segment: PLN 386.6m
EBITDA: PLN 7.8m
Revenue of the Energy segment: PLN 84.6m
EBITDA: PLN 27.6m
Revenue of the Other Activities segment: PLN 56.7m
EBITDA: PLN 20.6m
Positive drivers of the Grupa Azoty Group’s EBITDA included mainly the higher prices of products across all key segments (Fertilizers, Plastics and Chemicals). On the other hand, EBITDA was negatively affected mainly by the higher prices of raw materials used in the Group’s production processes, primarily natural gas, as well as an increase in electricity transmission charges (the new “capacity charge” and revised RES charge) and in the prices of CO2 emission allowances.
EBITDA performance of the Agro Fertilizers segment was largely a result of the higher selling prices of nitrogen, compound and speciality fertilizers compared with Q1 2020, driven by strong demand resulting from high grain prices and lower fertilizer imports. The positive effect of the increase in selling prices was offset by an increase in production costs due to the higher prices of raw materials, mainly natural gas.
The development of the Plastics segment’s EBITDA relative to Q1 2020 was largely a combined effect of the higher average product prices and increased demand across virtually all applications. The prices of key raw materials had a varied effect on EBITDA. In the period under review, some of the prices went up (benzene) and some went down (phenol) on a year-on-year basis.
EBITDA of the Chemicals segment was driven by a surge in the prices of OXO alcohols, melamine, technical grade urea and plasticizers. Demand on most segment markets rebounded versus Q1 2020, with the rebound particularly pronounced in the case of OXO alcohols. The increase in product prices more than offset the increases in the prices of most raw materials used in the Chemicals segment’s production processes.
A significant factor behind net profit posted by the Group for Q1 2021 was also the effect of measurement of financial instruments hedging cash flows of the Polimery Police project, entered into in accordance with the requirements of the credit facilities agreement and resulting from the financing raised in USD and payments made in EUR, mainly to the general contractor. The measurement of these financial instruments had the effect of increasing the Group’s finance costs in Q1 2021 by approximately PLN 90.1m.
The Company’s Management Board considers the information on the estimated consolidated results to be material given that the results generated in Q1 2021 differ from market expectations. At the same time, the estimated consolidated financial results generated in Q1 2021 are lower than the average consolidated results reported by the Company in the corresponding periods of the three previous years, i.e. Q1 2018–2020.
The amounts presented above are estimates and may be subject to change. The consolidated report for Q1 2021 will be issued on May 13th 2021.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Grupa Azoty S.A. (the “Company”) announces that on May 5th 2021 its Management Board passed a resolution to recommend that the Company’s entire net profit for the financial year 2020, of PLN 125,627,538.01, be allocated to the Company’s statutory reserve funds.
The Management Board recommends that the entire net profit for 2020 be retained by the Company.
The retained profit would be held as a liquidity buffer enabling the implementation of further investment plans after the entire equity contribution to the strategic Polimery Police project was made by December 31st 2020.
Furthermore, dividend payment restrictions are laid down in credit facility agreements concluded by the Company.
The credit facility agreements provide that dividend may be paid if the ratio of consolidated net financial debt to consolidated EBITDA of the Grupa Azoty Group (the “Group”), determined in accordance with the credit facility agreements, is no higher than 2.5 as at December 31st of a financial year (actual level based on the audited consolidated financial statements) and as at June 30th and December 31st of the next year (levels determined taking into account the consolidated budget). The ratio calculated based on the Group’s consolidated financial statements for 2020 was 2.10 as at December 31st 2020. However, based on the Group’s current consolidated budget these conditions will not be met as at June 30th and December 31st 2021.
In order to implement the resolution, the Management Board will request the Supervisory Board to assess the proposal and the General Meeting to decide on the allocation of net profit for the financial year 2020.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”, the “Factoring Agent”) announces that on April 29th 2021 the Company and its subsidiaries Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (the “Group Companies”) signed a PLN 500m (or EUR or USD equivalent) payment services and financing agreement (the “Reverse Factoring Agreement”) with CaixaBank S.A. Polish Branch (the “Bank”) for an indefinite term.
The facility under the Reverse Factoring Agreement is available for a period of 12 months and is automatically extended for another 12 months unless the Bank or the Factoring Agent gives notice of intention not to extend it no later than 120 days before expiry of the current availability period.
The Reverse Factoring Agreement provides for the financing of the Company’s and the Group Companies’ liabilities towards their suppliers and service providers.
The Bank’s claims under the Reverse Factoring Agreement are secured by a notarised statement of submission to enforcement made by the Company, for up to 120% of the value of the Reverse Factoring Agreement.
The Company is liable for all payments due under the Reverse Factoring Agreement, while each of the Group Companies is liable exclusively for payments due from it thereunder.
The per annum interest rate is equal to the reference rates of 1M WIBOR for financing denominated in the złoty, 1M EURIBOR for financing denominated in the euro, and 1M LIBOR for financing denominated in the US dollar, plus the Bank’s margin (if the reference rate is below 0, the Bank’s margin is the minimum rate).
The terms of the Reverse Factoring Agreement do not differ from standard terms used in agreements of such type.
The Reverse Factoring Agreement also imposes certain restrictions on the Company and the Group Companies, including restrictions on disposal or encumbrance of their material assets, granting loans and guarantees, paying dividends and incurring financial liabilities above the consolidated net debt to EBITDA ratio, which have been made consistent with the credit facility agreement of April 23rd 2015 amended by the Amending Agreement of June 29th 2018, as announced in the Company’s Current Report No. 25/2015 of April 23rd 2015 and Current Report No. 33/2018 of June 29th 2018.
The purpose of the Reverse Factoring Agreement is to finance operating activities, optimise interest expenses, help manage working capital and liquidity, and enhance the Group’s financing security by establishing an umbrella structure of facility limit allocation and authorising the Company, acting as the Factoring Agent, to redistribute the facility limits and to allow its other subsidiaries to accede to the Reverse Factoring Agreement as clients.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”, the “Factoring Agent”) announces that on April 29th 2021 the Company and its subsidiaries Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (the “Group Companies”) signed a PLN 500m (or EUR or USD equivalent) reverse factoring agreement (the “Reverse Factoring Agreement”) with ING Commercial Finance Polska S.A. (the “Factor”) for an indefinite term.
The facility under the Reverse Factoring Agreement is available for a period of 12 months and is automatically extended for another 12 months unless the Factor or the Factoring Agent gives notice of intention not to extend it no later than 120 days before expiry of the current availability period.
The Reverse Factoring Agreement provides for the financing of the Company’s and the Group Companies’ liabilities towards their suppliers and service providers.
The Factor’s claims under the Reverse Factoring Agreement are secured by a notarised statement of submission to enforcement made by the Company, for up to 120% of the value of the Reverse Factoring Agreement.
The Company is liable for all payments due under the Reverse Factoring Agreement, while each of the Group Companies is liable exclusively for payments due from it thereunder.
The per annum interest rate is equal to the reference rates of 1M WIBOR for financing denominated in the złoty, 1M EURIBOR for financing denominated in the euro, and 1M LIBOR for financing denominated in the US dollar, plus the Factor’s margin (if the reference rate is below 0, the Factor’s margin is the minimum rate).
The terms of the Reverse Factoring Agreement do not differ from standard terms used in agreements of such type.
The Reverse Factoring Agreement also imposes certain restrictions on the Company and the Group Companies, including restrictions on disposal or encumbrance of their material assets, granting loans and guarantees, paying dividends and incurring financial liabilities above the consolidated net debt to EBITDA ratio, which have been made consistent with the credit facility agreement of April 23rd 2015 amended by the Amending Agreement of June 29th 2018, as announced in the Company’s Current Report No. 25/2015 of April 23rd 2015 and Current Report No. 33/2018 of June 29th 2018.
The purpose of the Reverse Factoring Agreement is to finance operating activities, optimise interest expenses, help manage working capital and liquidity, and enhance the Group’s financing security by establishing an umbrella structure of facility limit allocation and authorising the Company, acting as the Factoring Agent, to redistribute the facility limits and to allow its other subsidiaries to accede to the Reverse Factoring Agreement as clients.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that the Company’s Supervisory Board, acting pursuant to Art. 368.4 of the Commercial Companies Code and Art. 32.1.1 in conjunction with Art. 23.1, Art. 23.2 and Art. 24.1 of the Company’s Articles of Association, in conjunction with Section 1.2 of the Rules of Procedure for the Company’s Supervisory Board, at its meeting held on April 19th 2021, passed resolutions appointing the following persons as members of Grupa Azoty S.A.’s Management Board for the new 12th term of office, with effect from May 18th 2021:
Tomasz Hinc – as President of the Management Board,
Filip Grzegorczyk – as Vice President of the Management Board,
Mariusz Grab – as Vice President of the Management Board,
Tomasz Hryniewicz – as Vice President of the Management Board,
Grzegorz Kądzielawski – as Vice President of the Management Board.
The persons appointed to the Management Board are not engaged in any activities conducted outside the Company which would be in competition with the Company’s business, nor are they partners in any partnerships under civil law or partnerships of any other type or shareholders in any company, nor members of governing bodies of any legal person competing with the Company’s business.
The appointed persons are not entered in the Register of Insolvent Debtors maintained pursuant to the National Court Register Act.
Tomasz Hinc has served as President of the Management Board since December 1st 2020.
Filip Grzegorczyk has served as Vice President of the Management Board since December 15th 2020.
Mariusz Grab has served as Vice President of the Management Board since May 17th 2018 (from October 22nd to November 30th 2020 – President of the Management Board).
Tomasz Hryniewicz was appointed as Member of the Company’s Management Board on June 12th 2019. Since June 5th 2019, he has served as Vice President of the Management Board.
Grzegorz Kędzielawski has served as Vice President of the Management Board since June 20th 2017.
A brief description of the newly appointed Management Board Members’ educational background, qualifications, previously held positions and employment records is attached to this current report.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 48/2020 of November 5th 2020 announcing the filing by a Shareholder of an action to repeal Resolution No. 5 of the Extraordinary General Meeting of Grupa Azoty S.A. (the “Company”) of August 20th 2020 to grant consent to execute legal transactions that could result in disposal of the Company’s non-current assets, the Management Board announces, in connection with the publication on April 17th 2021 of the judgment on the information website of the Regional Court of Kraków following examination of the case on April 1st 2021 in a closed session, that the Regional Court of Kraków, 9th Commercial Division, issued a judgment dismissing the action.
The judgment is not final.
Legal basis: Par. 19.1.10 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that in the course of the recruitment procedure for members, including President and Vice Presidents, of the Management Board of Grupa Azoty S.A., which is being conducted by the Company's Supervisory Board, on March 29th 2021 it was notified that Witold Szczypiński will not seek reappointment to the Management Board of the next term.
Accordingly, Witold Szczypiński will continue to serve as Vice President of the Management Board until his term of office expires on expiry of the joint term of office of the current Management Board.
Legal basis: Par. 5.4) of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 5/2021 of January 21st 2021, the Management Board of Grupa Azoty S.A. (the “Company”) announces that the release date for the separate and consolidated full-year reports for 2020 has been changed from March 31st, 2021 to April 15th 2021. Furthermore, the Company’s Management Board announces that the release date for the consolidated report on payments to governments has also been changed to April 15th 2021.
Accordingly, the Management Board announces that periodic reports due for release in 2021 will be released as per the following updated schedule:
The 2020 consolidated report on payments to governments will be released on April 15th 2021.
Legal basis: Par. 80.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes the estimated selected consolidated financial data of the Grupa Azoty Group for Q4 2020:
Revenue: 2,735.9m
EBITDA: 318.6m
Net profit: 92.3m
and the estimated selected consolidated financial data of the Grupa Azoty Group for 2020:
Revenue: 10,524.5m
EBITDA: 1,321.5m
Net profit: 355.4m
The Company’s Management Board considers the information on the consolidated results to be material in light of the recorded improvement in financial performance in the fourth quarter of 2020 relative to the corresponding periods of the three prior years. Furthermore, the results for the fourth quarter of 2020 differ from market expectations.
The Company's Management Board also reports that these results include compensation payable to eligible companies of the Grupa Azoty Group for 2019 and 2020 under the Act on the Compensation Scheme for Energy-Intensive Sectors and Subsectors, estimated at some PLN 218.8m as well as funding received under the Act on Special Arrangements to Prevent, Counteract and Combat COVID-19, Other Infectious Diseases and Crisis Situations Caused by Them of March 2nd 2020, version 4.0. The amount of the funding granted to Grupa Azoty Group companies was PLN 64.9m
The Grupa Azoty Group’s financial results are currently being reviewed by the auditor, as required under applicable regulations. The amounts presented above are estimates and may be subject to change. The final financial results for 2020 will be released on March 31st 2021.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces the expected effect of one-off non-cash items on the Company’s consolidated financial statements for 2020.
The Company recognised in its accounts the measurement of derivative instruments provided for in the shareholder agreement signed between the shareholders of the Company’s subsidiary and the associate of Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”, and jointly – the “Original Sponsors”) – Grupa Azoty Polyolefins S.A. (“GA Polyolefins”), which is implementing the strategic investment project Polimery Police (the “Project”).
The shareholder agreement was entered into on May 31st 2020 between the Original Sponsors, GA Polyolefins and Grupa LOTOS S.A. (“Grupa LOTOS”), Hyundai Engineering Co., Ltd. (“Hyundai”) and Korea Overseas Infrastructure & Urban Development Corporation (“KIND”, and jointly – the “Joint Sponsors”). Information about the execution of the shareholder agreement and its key provisions was announced in Current Report No. 24/2020 on May 31st 2020.
The shareholder agreement provides in particular for a put option for Hyundai and KIND and a call option (with respect to the shares held by Hyundai) for the Original Sponsors, in each case with respect to the GA Polyolefins shares with a total value (calculated on the basis of the price originally paid by Hyundai and KIND) of up to USD 70,000,000, for the same amount expressed in USD, in the case of the put option – additionally reduced by any dividends paid to Hyundai and KIND by the put option exercise date. The parties agreed that the call option could be exercised from the earlier of the actual Project completion date or January 1st 2025, and the put option – from the later of the expiry of the lock-up period, i.e. three years from the actual Project completion date, or January 1st 2027, with the exercise of the call option causing the expiry of the put option and vice versa. The parties agreed that the options would expire on or before December 31st 2035.
Therefore, in the context of the Company’s separate financial statements, the options are derivative financial instruments. The rights and obligations of the Original Sponsors in connection with the instruments are joint and several. The Company measured the value of the options as at December 31st 2020 relying on a valuation prepared by an independent expert based on assumptions specified by the Original Sponsors and relevant market parameters. The options are recognised in the financial statements of the Company and GA Police in proportion to the size of the shareholdings in GA Polyolefins.
Accordingly, the Company recognised in its separate financial statements financial assets of PLN 43,342 thousand on account of a derivative instrument – the call option, and financial liabilities of PLN 19,038 thousand on account of a derivative instrument – the put option. The effect on earnings amounted to PLN 24,304 thousand. The matter has no effect on separate EBITDA.
In the Company’s consolidated financial statements, a liability was recognised relating to future acquisition of the put option shares held by non-controlling shareholders, at the present value of the put option exercise price estimated at approximately PLN 230m, with a simultaneous reduction of the non-controlling shareholders’ equity and recognising the difference under equity. The recognition has no effect on consolidated EBITDA and its effect on the consolidated net result is not material.
In addition, the shareholder agreement provides for additional mechanisms enabling the Joint Sponsors to exit the investment in GA Polyolefins. In particular, the mechanisms enable Grupa LOTOS, Hyundai and KIND to exit the investment – with respect to shares not covered by the put or call option – following a buyback of the shares by GA Polyolefins at fair value for cancellation. Such buyback should be made with funds generated and accumulated by GA Polyolefins after full repayment of senior debt financing.
In view of the above, the amount of contribution paid for GA Polyolefins shares subscribed for by Grupa LOTOS, Hyundai and KIND, which can be bought back in the future for cancellation in accordance with the shareholder agreement, is recognised in the consolidated financial statements as a financial liability and measured taking into account the required level of profitability of the Joint Sponsors’ investment. The amount of the financial liability as at December 31st 2020 is approximately PLN 334m. The matter had no effect on consolidated EBITDA or consolidated net result.
As the audit of the Company’s financial statements for 2020 has not yet been completed, the above amounts are not final and are subject to change.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 23/2020 of May 31st 2020, Current Report No. 24/2020 of May 31st 2020, Current Report No. 44/2020 of October 7th 2020, and Current Report No. 52/2020 of November 16th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on February 25th 2021 Grupa Azoty Polyolefins S.A., a subsidiary of the Company and associate of Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Polyolefins”), was notified by Bank Polska Kasa Opieki S.A., acting as the Facility Agent, that it had received all the documents and/or information necessary to fulfil the conditions precedent to the Financial Closing under the Credit Facilities Agreement (as defined in Current Report No. 23/2020 of May 31st 2020), as amended, in form and substance satisfactory to the Lenders.
The Financial Closing having been therefore reached, GA Polyolefins may now apply for disbursement of funds under the Credit Facilities, subject to specific conditions for the first drawdown on each Facility and additional conditions for each disbursement, which do not differ from standard terms and conditions applicable to similar financing arrangements.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on February 23rd 2021 the Company and the Małopolska Region signed an agreement on cooperation in implementing the integrated project LIFE EKOMAŁOPOLSKA (the “Agreement”).
In the Agreement, the parties define the main principles of cooperation in implementing a climate protection policy and the integrated project LIFE EKOMAŁOPOLSKA – “Implementation of the Regional Action Plan for Climate and Energy” (the “Project”), financed with a LIFE financial instrument and European Union funds.
The Company has declared that it will:
a) strive to achieve climate neutrality in its production processes and activities carried out in the Małopolska Region by 2050,
b) implement projects supporting the energy transformation process, especially those involving the use of renewable energy sources, and reduction of greenhouse gas emission by 2030,
c) seek to decarbonise industrial activity and minimise the carbon footprint,
d) develop green ammonia and green hydrogen technologies,
e) implement R&D projects that will contribute to the achievement of environmental and climate objectives set out in the European Green Deal,
f) provide expertise and support for the purposes of implementing the integrated project LIFE EKOMAŁOPOLSKA – “Implementation of the Regional Climate and Energy Action Plan for the Małopolska Region”.
The Małopolska Region has declared that it will use its own funds and resources in order to meet the Project requirements and achieve its main objectives.
The Parties to the Agreement have represented that they will collaborate in developing/preparing assessments, expert opinions and plans regarding transformation of the energy-intensive industry in the Małopolska Region, which are to be drawn up as part of the LIFE EKOMAŁOPOLSKA Project.
The Agreement does not provide for any financial flows between its parties and no transfer of funds will take place as part of the cooperation.
The Agreement has been made for an indefinite period and until the completion of the LIFE EKOMAŁOPOLSKA Project – “Implementation of the Regional Action Plan for Climate and Energy”, assuming that the Project will be completed in December 2030.
Either party may withdraw from the Agreement by giving written notice to the other party.
Grupa Azoty S.A., aware of air pollution and climate change as well as the inevitable energy transition in industry and the economy as a whole, wishes to engage in all initiatives conducive to achieving climate and environmental goals. One of the initiatives taken is the above project of the Małopolska Region.
Legal basis: Article 17(1) of 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 of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Grupa Azoty S.A. (the “Company”) will announce its 2020 full year results and 2021 interim results as per the following schedule:
1. First and third quarter interim results:
- Q1 2021 complete consolidated report – May 13th 2021
- Q3 2021 complete consolidated report – November 9th 2021
2. Half-year interim results:
- H1 2021 complete consolidated report – September 9th 2021
3. Full year results:
- 2020 separate full year report – March 31st 2021
- 2020 consolidated full year report – March 31st 2021
The 2020 consolidated report on payments to governments will be released on March 31st 2021.
Furthermore, the Company announces that no separate quarterly results will be published by the Company, as permitted under Par. 62.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757) (the “Regulation”). The consolidated quarterly reports will incorporate quarterly condensed consolidated financial statements and quarterly financial information.
Also, the Company will not publish a separate (non-consolidated) half year report, as permitted under Par. 62.3 of the Regulation.
Further, the Company will not publish separate or consolidated quarterly results for Q4 2020 and Q2 2021, as permitted under Par. 79.2 of the Regulation.
Legal basis: Par. 80.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 01/2021 of January 8th 2021, the Management Board of Grupa Azoty S.A. (the “Company”) presents, attached hereto, a brief description of the educational background, qualifications, previously held positions and employment record of the newly appointed Chairwoman of the Company’s Supervisory Board, Ms Magdalena Butrymowicz.
The Management Board further announces that Ms Magdalena Butrymowicz has made a representation to the effect that she is not engaged in any activities competing with the Company’s business, nor is she a partner in any competing partnership under civil law or any other type of partnership, a shareholder in any competing incorporated company or a member of governing bodies of any other competing legal entities.
The representation received by the Company includes a statement to the effect that the new Chairwoman of the Supervisory Board is not entered in the Register of Insolvent Debtors maintained pursuant to the Act on the National Court Register.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, a list of shareholders holding 5% or more of total voting rights at the Extraordinary General Meeting held on January 8th 2021, specifying the number of votes conferred by the shares held by each shareholder, and their percentage share in the votes represented at that Extraordinary General Meeting and in the total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2020, item 2080)
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions passed by the Company’s Extraordinary General Meeting on January 8th 2021, together with the results of voting on the resolutions.
In connection with the use of a computer system for voting and counting the votes, the Extraordinary General Meeting decided not to appoint a Ballot Counting Committee.
The Extraordinary General Meeting did not leave any items of the planned agenda unaddressed.
During the meeting, no objections concerning the adopted resolutions were raised and requested to be recorded in the minutes.
Legal basis: Par. 19.1.6 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on January 8th 2021, by resolution of the Extraordinary General Meeting, Magdalena Butrymowicz was appointed to the Company’s Supervisory Board.
At the same time, the Extraordinary General Meeting appointed Magdalena Butrymowicz as Chair of the Company’s Supervisory Board of the 11th term of office.
The resolutions became effective upon adoption.
A brief description of the educational background, qualifications, previously held positions and employment records of the newly appointed Chair of the Supervisory Board, together with the representations required from her, will be published by the Company as soon as practicable.
Legal basis: Par. 5.5of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 60/2020 of December 30th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that it has received from the newly appointed member of the Supervisory Board Mr Marcin Mauer a curriculum vitae supplemented to include his positions on supervisory bodies.
The supplemented curriculum vitae of Mr Marcin Mauer is attached to this current report.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 58/2020 of December 29th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) presents, attached hereto, a brief description of the educational background, qualifications, previously held positions and employment record of the newly appointed Member of the Company’s Supervisory Board, Mr Marcin Mauer.
The Management Board further announces that Mr Marcin Mauer has made a representation to the effect that he is not engaged in any activities competing with the Company’s business, nor is he a partner in any competing partnership under civil law or any other type of partnership, a shareholder in any competing incorporated company or a member of governing bodies of any other competing legal entities.
The representation received by the Company includes a statement to the effect that the new Member of the Supervisory Board is not entered in the Register of Insolvent Debtors maintained pursuant to the Act on the National Court Register.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 17(1) of MAR – Inside information
Further to Current Report No. 7/2018 issued on March 12th 2018, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 29th 2020 the Company submitted to Polska Grupa Górnicza S.A. of Katowice (the “Seller”) a notice of termination of the bilateral coal sale contracts (the “Contracts”) executed on March 12th 2018 by the Company and its subsidiaries: Grupa Azoty Zakłady Azotowe Puławy S.A., Grupa Azoty Zakłady Chemiczne Police S.A. and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. (jointly the “Customers”).
The subject matter of the Contracts is the sale of thermal coal produced at the Seller’s mines and intended for consumption at the Customers in quantities specified in the respective Contracts, based on uniform business terms for the Customers.
The reason for terminating the Contracts is a reduction in the quantities of coal to be consumed by the Customers as from 2022, related to:
- conversion of the heat and power generation system from fine coal to a different fuel,
- planned investments in the CHP plants aimed at converting them to a different fuel and improving their efficiency,
- improved energy efficiency of industrial processes resulting in lower heat consumption.
The termination notices submitted by the Company and other Customers to the Seller are subject to the 24 months’ notice period, with effect as of the end of the calendar year in which the notice period expires, i.e. December 31st 2022.
The Company warrants that the termination of the Contracts will not disrupt their operations. Failure to terminate the Contracts would result in excessive difficulties related to reception of the fine coal and in negative financial consequences from their continued performance.
Despite the Contracts having been terminated, the Company intends to continue its long-term business cooperation with the Seller, on new mutually agreed terms, adapted to reflect the quantities of coal actually needed by the Customers and the prevailing market conditions.
At the same time, the Company announces that a negotiation team is already working to reach an agreement with respect to future business relations between the parties.
The Seller is the main supplier of fine coal to companies of the Grupa Azoty Group, the value of its supplies made throughout 2020 estimated at PLN 187.2m (exclusive of VAT).
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company") announces that on December 29th 2020 it was notified by the Minister of State Assets of the appointment of Marcin Mauera to the Company's Supervisory Board under Art. 16.2 of the Company's Articles of Association as of December 28th 2020.
A brief description of the newly appointed Supervisory Board Member’s educational background, qualifications, previously held positions and employment records, together with all the representations required from him, will be published by the Company as soon as practicable.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions to be debated at the Extraordinary General Meeting of the Company convened for January 8th 2021.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
attachments - to be added
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2020, item 2080) – Current and periodic information
Acting pursuant to Art. 399.1 and Art. 400.1 in conjunction with Art. 4021 and Art. 4022 of the Commercial Companies Code, the Management Board of Grupa Azoty S.A. of Tarnów (the “Company”), entered in the Register of Businesses of the National Court Register by the District Court for Kraków-Śródmieście in Kraków, 12th Commercial Division of the National Court Register, under No. KRS 0000075450, Tax Identification Number (NIP): 873-000-68-29, with a share capital of PLN 495,977,420 (paid up in full), hereby convenes an Extraordinary General Meeting of Grupa Azoty S.A. to be held on January 8th 2021, at 12:00 pm (noon), at the Company’s registered office at ul. Kwiatkowskiego 8, Tarnów, Poland, in conference room 57/58, 1st floor.
The total number of Grupa Azoty shares is 99,195,484. As at January 8th 2021, the number of votes attached to these shares is 99,195,484.
The Extraordinary General Meeting is being convened at the request of the State Treasury, being a shareholder representing at least one-twentieth of the Company’s share capital, submitted on December 9th 2020 (under Art. 400.1 of the Commercial Companies Code and Art. 42.1.4) of the Company's Articles of Association). The requesting shareholder has also proposed that the following items be placed on the agenda of the General Meeting:
Agenda:
Right to participate in the General Meeting
Pursuant to Art. 406[1].1 of the Commercial Companies Code, the right to participate in the Meeting is vested in persons who are Company shareholders sixteen days prior to the date of the General Meeting, i.e. as at December 23rd 2020 (the record date).
To be able to attend the Extraordinary General Meeting, holders of rights attached to book-entry bearer shares should submit, with the entity keeping their securities account, a request to be issued a personal certificate confirming their right to attend the Extraordinary General Meeting. The request should be submitted on or after the publication of the notice of the Extraordinary General Meeting, i.e. on or after December 11th 2020,and no later than on the first weekday following the record date, i.e. December 24th 2020. Personal certificates confirming the right to participate in the Extraordinary General Meeting will serve as the basis for preparation of records submitted to the entity operating the securities depository in accordance with the Act on Trading in Financial Instruments.
The list of shareholders entitled to attend the Extraordinary General Meeting will be displayed at the Company’s registered office at ul. Kwiatkowskiego 8, Tarnów, Poland, for three weekdays immediately preceding the date of the Extraordinary General Meeting, i.e. on January 4th, 5th and 7th 2021, from 8:00 am to 4:00 pm. A shareholder may request to be delivered the list of shareholders free of charge via electronic mail, by providing an email address to which the list should be delivered. The request may be submitted in electronic form to the following Company email address: ##lpact.ipgcdl#at#vgjeppodin.rdb##.
Right to participate in the Extraordinary General Meeting through a proxy
Shareholders may participate in the Extraordinary General Meeting of the Company and exercise their voting rights personally or through a proxy. Persons acting on behalf of legal persons should present valid excerpts from relevant registers specifying persons authorised to represent the legal persons.
A proxy may exercise all the rights of a shareholder at the Extraordinary General Meeting unless the power of proxy states otherwise. A proxy may grant further powers of proxy if permitted to do so under their power of proxy. A proxy may represent multiple shareholders and vote the shares of each shareholder differently. A shareholder whose shares are registered in more than one securities account may appoint a separate proxy to exercise the rights attached to the shares registered in each account. A shareholder whose shares are registered in an omnibus account may appoint separate proxies to exercise the rights attached to the shares registered in that account.
A power of proxy to participate in the Extraordinary General Meeting of Grupa Azoty S.A. and exercise voting rights must be in written or electronic form. As of the date of this notice, the Company will make a form of electronic power of proxy available for downloading from www.grupaazoty.com. The grant of a power of proxy in electronic form must be notified to the Company by means of electronic communication. Along with a notification of granting a power of proxy in electronic form, the shareholder must send in scanned copies of the granted power of proxy, ID cards, passports or other documents enabling identification of the shareholder as the principal and of the appointed proxy. Where the power of proxy is granted by a legal person or an organisation referred to in Art. 331 of the Civil Code, a scanned copy of the principal’s entry in the relevant register must also be submitted. Where the proxy is a legal person or an organisation referred to in Art. 331 of the Civil Code, a scanned copy of the proxy’s entry in the relevant register must also be submitted. Any documents submitted via electronic means and originally prepared in a foreign language should be accompanied by a certified translation into Polish. All the above documents should be sent in to: ##lpact.ipgcdl#at#vgjeppodin.rdb##. Together with a notification of granting a power of proxy, the shareholder sends in an email address through which the Company will be able to communicate with the shareholder and the proxy. The Company may take appropriate steps aimed at identifying the shareholder and the proxy. The identification procedure may involve contacting the shareholder and the proxy via a return electronic message or a return call to confirm that the power of proxy has actually been granted. A power of proxy in electronic form does not need to be signed with a qualified electronic signature.
The procedure for identification of the principal applies accordingly to a notification of revoking a power of proxy. Proxy appointment or revocation notifications which are not compliant with the requirements set out above have no legal effect with respect to the Company.
It is the shareholder who decides on the way of granting a power of proxy and the Company is not liable for any errors in filled-in forms or actions by the holders of powers of proxy. Sending in the above documents in electronic form does not release the proxy from the obligation to produce his/her identification documents when the attendance list of persons authorised to participate in the Extraordinary General Meeting of the Company is being prepared.
Shareholders’ right to request that a certain matter be placed on the agenda of the Extraordinary General Meeting
A shareholder or shareholders representing at least one-twentieth of the Company’s share capital may request that certain matters be placed on the agenda of the Extraordinary General Meeting. Any such request, together with the grounds or a draft resolution pertaining to the request, should be submitted to the Company’s Management Board no later than 21 days prior to the scheduled date of the Extraordinary General Meeting, that is by December 18th 2020. The request may be submitted in electronic form to ##lpact.ipgcdl#at#vgjeppodin.rdb##, or in writing to the following address: Zarząd Grupy Azoty S.A. (Management Board of Grupa Azoty S.A.), ul. Kwiatkowskiego 8, 33-101, Tarnów, Poland.
Shareholders’ right to propose draft resolutions
A shareholder or shareholders representing at least one-twentieth of the share capital may submit, prior to the scheduled date of the Extraordinary General Meeting, draft resolutions on matters which have been or are to be placed on the agenda. Such draft resolutions may be sent in electronic form to ##lpact.ipgcdl#at#vgjeppodin.rdb##, or in writing to the following address: Zarząd Grupy Azoty S.A. (Management Board of Grupa Azoty S.A.), ul. Kwiatkowskiego 8, 33-101, Tarnów, Poland.
During the Extraordinary General Meeting, any shareholder may submit draft resolutions on matters placed on the agenda. Such draft resolutions should be in the Polish language.
Electronic communications
The Management Board of the Company does not provide for the possibility of participating in the Extraordinary General Meeting or taking the floor by means of electronic communication. The Management Board does not permit the exercise of voting rights by postal ballot or electronic means.
Access to documents
The documents to be presented to the Extraordinary General Meeting, including draft resolutions, will be available at the Company's registered office and on the Company's website at https://tarnow.grupaazoty.com/relacje-inwestorskie/walne-zgromadzenia from the date of convening the Extraordinary General Meeting.
Additionally, the draft resolutions and any previously unpublished documents pertaining to matters to be dealt with, and to resolutions to be voted on, at the General Meeting will be published pursuant to the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Any additional materials from the Company’s Management Board or Supervisory Board concerning matters placed on the agenda of the Extraordinary General Meeting or matters to be placed on the agenda before the date of the Extraordinary General Meeting will be published on the Company’s website promptly after they are issued.
Corporate website
Information concerning the General Meeting is available on the Company’s website at www.grupaazoty.com, in the Investor Relations/General Meeting of Shareholders section (i.e. at https://tarnow.grupaazoty.com/relacje-inwestorskie/walne-zgromadzenia).
INFORMATION ON PERSONAL
DATA PROTECTION
IN CONNECTION WITH THE CONVENING OF THE GENERAL MEETING OF
GRUPA AZOTY S.A.
Pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council (GDPR), Grupa Azoty S.A. (the “Company”) wishes to advise you that in connection with the convening of the Company’s Extraordinary General Meeting (the “EGM”) the Company will process the personal data of the Company shareholders, their proxies authorised to vote and other persons authorised to exercise voting rights at the EGM (jointly referred to as the “Shareholders” or “you”).
Therefore, the Company states that:
a) the controller of the personal data collected is Grupa Azoty S.A. of Tarnów; You can contact the Company by writing to the email address ##ipgcdl#at#vgjeppodin.rdb## or postal address: Grupa Azoty Spółka Akcyjna, ul. E. Kwiatkowskiego 8, 33-101 Tarnów, Poland;
b) For matters related to the protection of personal data at the Company, you can contact the Data Protection Officer via the following email: ##xds.ipgcdl#at#vgjeppodin.rdb## or by post: Grupa Azoty Spółka Akcyjna, ul. E. Kwiatkowskiego 8, 33-101 Tarnów, Poland
c) The data will be processed for the following purposes: compliance by the Company with its legal obligations under the Commercial Companies Code, imposed on it as a public company in connection with the convening of the EGM[1], allowing the Shareholders to exercise their rights in relation to the Company, as well as establishment, exercise or defence of any legal claims by the Company;
d) The Company processes: (i) personal data identifying the Shareholder, such as the first name, surname, address of residence or address for correspondence and Personal Identification Number (PESEL), (ii) data included in powers of attorney/proxy, (iii) data on shares held and rights attached to them, such as the number, type and serial numbers of shares and number of voting rights conferred by such shares, and (iv) where Shareholders contact the Company via email – their email address;
e) Shareholders’ personal data may be collected by the Company from entities operating the securities depository, as well as from other Shareholders – with respect to the data included in powers of proxy;
f) The legal basis for the processing of your personal data by the Company is:
g) Recipients of the personal data include entities providing hosting services for IT tools used for the purpose of contacting Shareholders, entities providing document archiving services, and other Shareholders – with respect to making the list of shareholders available for inspection in accordance with Art. 407 of the Commercial Companies Code;
h) Personal data included in the lists of shareholders, attendance lists and powers of attorney/proxy is stored for the period of the Company's existence, and may afterwards be transferred to an entity designated to store documents in accordance with the Commercial Companies Code; personal data related to email contact is stored for a period allowing the Company to demonstrate its compliance with obligations imposed by the Commercial Companies Code and for a period of prescription of any potential claims of or against the Company;
i) Where data is provided directly to the Company, provision of data is required by the Commercial Companies Code and in order to enable verification of the Shareholder's identity, and failure to do so results in the Shareholder’s inability to participate in the EGM; provision of the email address is voluntary but required to enable email contact between the Company and the Shareholder, with failure to provide it precluding such email contact;
j) You have the right to request access to your personal data and to demand its rectification, erasure or restriction of its processing, right to object to processing of the data, as well as the right to data portability; You should bear in mind that these rights are not absolute and there are certain exceptions as to when they may be exercised provided for in the applicable laws and regulations;
k) You may lodge a complaint with the President of the Data Protection Authority in the event of any irregularities in the processing of your personal data.
Legal basis: Par. 19.1.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
[1]In particular, Art. 401, 407, 410 and 412 of the Commercial Companies Code.
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 4th 2020 the Supervisory Board of the Company appointed Filip Grzegorczyk as Vice President of the Management Board of the 11th term, with effect from December 15th 2020.
The Management Board further announces that Filip Grzegorczyk has made a representation to the effect that he is not engaged in any activities competing with the Company’s business, nor is he a partner in any competing partnership under civil law or any other type of partnership, a shareholder in any competing incorporated company or a member of a governing body of any other competing legal entity.
Filip Grzegorczyk is not entered in the Register of Insolvent Debtors maintained pursuant to the National Court Register Act.
A brief description of the newly appointed Vice President’s educational background, qualifications, previously held positions and employment records is attached to this current report.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A (the “Company”) announces that on November 30th 2020 it received a notice of resignation from Mr Marcin Pawlicki from his position as Chairman and Member of the Company’s Supervisory Board.
Mr Pawlicki did not specify the reasons for his resignation.
Legal basis: Par. 5.4) of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 51/2020 of November 16th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 27th 2020 the District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register, registered an increase in the share capital of the Company’s subsidiary Grupa Azoty Polyolefins S.A. of Police (“GA Polyolefins”).
Following the registration, the share capital of GA Polyolefins was increased from PLN 599,283,310 to PLN 922,968,300. The number of shares of all issues currently totals 92,296,830 (previously: 59,928,331). Their par value is PLN 10 per share.
As a result of the share capital increase at GA Polyolefins, the number of shares held by the Company did no change and amounts to 28,166,316 shares with a par value of PLN 10 per share and total value of PLN 281,663,160.
At present, the Company’s direct interest in the share capital of GA Polyolefins is 30.52%. The other shareholders in GA Polyolefins are: the Company’s subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (34.41% of the share capital), Grupa LOTOS S.A. of Gdańsk (17.30% of the share capital), Hyundai Engineering Co., Ltd of Seoul, South Korea (16.63% of the share capital), and Korea Overseas Infrastructure & Urban Development Corporation of Seoul, South Korea (1.14% of the share capital).
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 24/2019 of April 26th 2019, Current Report No. 58/2019 of October 31st 2019, Current Report No. 73/2019 of November 22nd 2019, Current Report No. 74/2019 of December 6th 2019, Current Report No. 77/2019 of December 13th 2019, Current Report No. 80/2019 of December 23rd 2019, Current Report No. 23/2020 of May 31st 2020, Current Report No. 24/2020 of May 31st 2020, and Current Report No. 51/2020 of November 16th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 16th 2020 the Company and its subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”, and jointly with the Company “Original Sponsors”) performed their obligations under equity investment agreements executed in connection with the Polimery Police project (the “Transaction Documents”) (the “Project”) with Hyundai Engineering Co., Ltd. (“Hyundai”), Korea Overseas Infrastructure & Urban Development Corporation (“KIND”), and Grupa LOTOS S.A. (“Grupa LOTOS”) (jointly “the Co-Sponsors”).
In connection with the Project, on November 16th 2020 the Extraordinary General Meeting of Grupa Azoty Polyolefins S.A. (“GA Polyolefins”), a subsidiary of the Company, passed a resolution to increase GA Polyolefins’ share capital. In performance of their obligations under the Transaction Documents, on November 16th 2020 each of the Co-Sponsors entered into a subscription agreement with GA Polyolefins whereby Hyundai acquired 15,348,963 (fifteen million, three hundred and forty-eight thousand, nine hundred and sixty-three) Series G shares, KIND acquired 1,052,184 (one million, fifty-two thousand, one hundred and eighty-four) Series G shares, and Grupa LOTOS acquired 15,967,352 (fifteen million, nine hundred and sixty-seven thousand, three hundred and fifty-two) Series G shares. Following the execution of the subscription agreements, the Co-Sponsors made cash contributions to pay for the new shares in GA Polyolefins as follows: Hyundai paid GA Polyolefins USD 73,000,000 (equivalent to PLN 275,808,600, as translated at the NBP rate for November 16th 2020 (Table 223/A/NBP/2020 of November 16th 2020), KIND paid USD 5,000,000 (equivalent to PLN 18,891,000, as translated at the NBP rate for November 16th 2020 (Table 223/A/NBP/2020 of November 16th 2020), and Grupa LOTOS paid PLN 300,000,000. As a result, the shareholding structure of GA Polyolefins following registration of the share capital increase will be as follows: GA Police will hold 34.41%, the Company will hold directly 30.52%, Grupa LOTOS will hold 17.3%, Huyndai will hold 16.63%, and KIND will hold 1.14% of the GA Polyolefins share capital, with these percentages corresponding both to the shareholders’ respective ownership interests in GA Polyolefins and to their shares in the total vote at the General Meeting of GA Polyolefins.
On November 16th 2020, the Extraordinary General Meeting of GA Polyolefins, a subsidiary of the Company, also passed a resolution to amend the Articles of Association of GA Polyolefins. Following the registration of the amendments by the competent registry court, the corporate governance principles agreed in the shareholder agreement referred to in Current Report No. 24/2020 of May 31st 2020 will apply at GA Polyolefins.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 16th 2020 the Extraordinary General Meeting of Grupa Azoty Polyolefins S.A. (“GA Polyolefins”), a subsidiary of the Company, passed a resolution to increase the share capital of GA Polyolefins through the issue of Series G ordinary shares and waiver of all shareholders’ pre-emptive rights with respect to all Series G shares.
The share capital of GA Polyolefins was increased by PLN 323,684,990.00 (three hundred and twenty-three million, six hundred and eighty-four thousand, nine hundred and ninety złoty) through the issue of 32,368,499 (thirty-two million, three hundred and sixty-eight thousand, four hundred and ninety-nine) new Series G registered shares with a par value of PLN 10 (ten złoty) per share (“Series G Shares”) to PLN 922,968,300.00 (nine hundred and twenty-two million, nine hundred and sixty-eight thousand, three hundred złoty). Series G Shares will be acquired through private placement by:
The cash contributions to be made to pay for all Series G Shares will total PLN 594,699,600. The share premium of Series G Shares, of PLN 271,014,610, will be allocated to the statutory reserve funds of GA Polyolefins.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company) announces that on November 13th 2020 the Supervisory Board of the Company appointed Mr Tomasz Hinc as President of the Management Board of the 11th term of office, with effect from December 1st 2020.
The Management Board further announces that Tomasz Hinc has made a representation to the effect that he is not engaged in any activities competing with the Company’s business, nor is he a partner or shareholder in any competing partnership or company, or a member of a governing body of any other competing legal entity.
Tomasz Hinc is not entered in the Register of Insolvent Debtors maintained pursuant to the National Court Register Act.
A brief description of the newly appointed President’s educational background, qualifications, previously held positions and employment record is attached to this current report.
Further to Current Report No. 47/2020 of October 22nd 2020, the Management Board also announces that following the appointment of Tomasz Hinc as President of the Management Board, Mr Mariusz Grab will cease to serve in the capacity of acting President of the Management Board.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 70.1 of the Public Offering Act – acquisition or disposal of a significant holding of shares
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 10th 2020 received notification provided by the attorney:
In accordance with the submitted notification, in the process intragroup transaction i.e. by transferring on 5th November 2020 by Redbrick Investments to Acronagroservice (entity controlled by Mr. Viatcheslav Kantor, citizen of Israel through his subsidiaries: Terasta, Redbrick Holding and Redbrick Investments) block of shares in JSC Acron, joint stock company with its registered seat in Veliky Novgorod in Russia (“Acron”), Acronagroservice become a dominant entity over Acron (the “Transaction”) and consequently indirectly through its subsidiaries: Acron, TrustService Limited Liability Company with its registered seat in Veliky Novgorod in Russia (“TrustService”), Norica, Opansa Enterprises Limited with its registered seat in Nicosia, address: Nikis & Kastoros, 2, 1087 Nicosia, Cyprus, entered into the Registrar of Entrepreneurs under No. HE 309640 („Opansa”) and Rainbee Holdings Limited with its registered seat in Nicosia, address: Nikis & Kastoros, 2, 1087 Nicosia, Cyprus, entered into the Registrar of Entrepreneurs under No. HE 309661 („Rainbee”), acquired 19,657,350 shares of Grupa Azoty S.A. with its registered office in Tarnów, KRS number: 0000075450 (hereinafter “Company”) representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders, what resulted in indirect crossing the 15% threshold in total number of votes at the General Meeting of Shareholders of the Company.
As a result of the Transaction:
- Mr. Kantor indirectly, through Terasta, Redbrick Holding, Redbrick Investment, Acron, TrustService, Norica, Opansa and Rainbee disposed 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders; and simultaneously indirectly, thorough Terasta, Redbrick Holding, Redbrick Investment, Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee, acquired 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Terasta (entity directly controlled by Mr. Kantor) indirectly disposed through Redbrick Holding, Redbrick Investment, Acron, TrustService, Norica, Opansa and Rainbee 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders; and simultaneously indirectly, thorough Redbrick Holding, Redbrick Investment, Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee, acquired 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Redbrick Holding (entity directly controlled by Terasta and indirectly controlled by Mr. Kantor) indirectly disposed through Redbrick Investment, Acron, TrustService, Norica, Opansa and Rainbee 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders; and simultaneously indirectly, thorough Redbrick Investment, Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee, acquired 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Redbrick Investment (entity directly controlled by Redbrick Holding and indirectly controlled by Terasta and Mr. Kantor) indirectly disposed through Acron, TrustService, Norica, Opansa and Rainbee 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders; and simultaneously indirectly thorough Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee, acquired 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Acronagroservice (entity directly controlled by Redbrick Investment and indirectly controlled by Redbrick Holding, Terasta and Mr. Kantor) indirectly acquired through Acron, TrustService, Norica, Opansa and Rainbee 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders.
As a result of the Transaction:
-Mr. Kantor indirectly, through Terasta, Redbrick Holding, Redbrick Investment, Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee holds 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Terasta indirectly, through Redbrick Holding, Redbrick Investment, Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee holds 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Redbrick Holding indirectly, through Redbrick Investment, Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee holds 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Redbrick Investment indirectly, through Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee holds 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Acronagroservice holds indirectly, through its subsidiaries Acron, TrustService, Norica, Opansa i Rainbee 19.657.350 shares of the Company representing app. 19,8168% of the total number of shares of the Company, which entitle to exercise 19.657.350 votes at the Company’s General Meeting of Shareholders, constituting app. 19,8168% of total number of votes at the Company’s General Meeting of Shareholders.
Before the Transaction:
- Mr. Kantor indirectly, through Terasta, Redbrick Holding, Redbrick Investment, Acron, TrustService, Norica, Opansa and Rainbee held 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Terasta indirectly, through Redbrick Holding, Redbrick Investment, Acron, TrustService, Norica, Opansa and Rainbee held 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Redbrick Holding indirectly, through Redbrick Investment, Acron, TrustService, Norica, Opansa and Rainbee held 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Redbrick Investment indirectly, through Acron, TrustService, Norica, Opansa and Rainbee held 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders;
- Acronagroservice did not hold directly or indirectly any shares in the Company.
Additionally, Mr. Kantor, Terasta, Redbrick Holding, Redbrick Investment and Acronagroservice inform, each separately, that there are no persons or entities referred to in Article 87 section 1 point 3 c) of POA.
Before and after the Transaction Mr. Kantor have not held directly or indirectly any financial instruments referred to in Article 69 sec. 4 item 7 an 8 of the POA in connection with art. 69b of the POA.
Before and after the Transaction Terasta have not held directly or indirectly any financial instruments referred to in Article 69 sec. 4 item 7 an 8 of the POA in connection with art. 69b of the POA.
Before and after the Transaction Redbrick Holding have not held directly or indirectly any financial instruments referred to in Article 69 sec. 4 item 7 an 8 of the POA in connection with art. 69b of the POA.
Before and after the Transaction Redbrick Investment have not held directly or indirectly any financial instruments referred to in Article 69 sec. 4 item 7 an 8 of the POA in connection with art. 69b of the POA.
Before and after the Transaction Acronagroservice have not held directly or indirectly any financial instruments referred to in Article 69 sec. 4 item 7 an 8 of the POA in connection with art. 69b of the POA.
Mr. Kantor further notifies that his controlled entities, other than Norica, Opansa and Rainbee, do not hold any shares of the Company.
Terasta further notifies that his controlled entities, other than Norica, Opansa and Rainbee, do not hold any shares of the Company.
Redbrick Holding further notifies that his controlled entities, other than Norica, Opansa and Rainbee, do not hold any shares of the Company.
Redbrick Investment further notifies that his controlled entities, other than Norica, Opansa and Rainbee, do not hold any shares of the Company.
Acronagroservice further notifies that his controlled entities, other than Norica, Opansa and Rainbee, do not hold any shares of the Company.
Mr. Kanton, Terasta, Redbrick Holding, Redbrick Investment and Acronagroservice inform that, with respect of each of them, each of them in aggregate indirectly holds 19,657,350 shares the Company representing app. 19.8168% of the total number of shares of the Company, which entitle to exercise 19,657,350 votes at the Company’s General Meeting of Shareholders, constituting app. 19.8168% of total number of votes at the Company’s General Meeting of Shareholders.
Moreover, the notification states that the Transaction was of intragroup nature, therefore Mr. Kantor remains dominant entity of Terasta, Redbrick Holding, Redbrick Investments, Acronagroservice, Acron, TrustService, Norica, Opansa and Rainbee, as a result of which still indirectly controls 19.657.350 shares of the Company representing app. 19,8168% of the total number of shares of the Company, which entitle to exercise 19.657.350 votes at the Company’s General Meeting of Shareholders, constituting app. 19,8168% of total number of votes at the Company’s General Meeting of Shareholders, as informed in notification as of 10 June 2016, published by the Company in the current report No. 40/2016 as well as notification published by the Company in the current report No. 19/2017.
Legal basis: Art. 70.1 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz. U. 2019 r., item. 623, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that the Company has been served with a lawsuit by a Shareholder to repeal Resolution No. 5 of the Extraordinary General Meeting of August 20th 2020 to grant consent for legal transactions which could result in disposal of the Company’s non-current assets.
Legal basis: Par. 19.1.10 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on October 22nd 2020 the Company’s Supervisory Board resolved to remove the following persons from the Management Board:
The Supervisory Board further resolved to appoint Mariusz Grab as acting President of the Management Board until appointment to the position of a person selected in the recruitment and selection procedure for members of the Management Board. Prior to his appointment as acting President of the Management Board, Mr Mariusz Grab served as Vice President of the Management Board.
The Management Board further announces that Mariusz Grab has made a representation to the effect that he is not engaged in any activities competing with the Company’s business, nor is he a partner or shareholder in any competing partnership or company or a member of a governing body of any other competing legal entity.
Mariusz Grab is not entered in the Register of Insolvent Debtors maintained pursuant to the National Court Register Act.
A brief description of Mariusz Grab’s educational background, qualifications, previously held positions and employment record is attached to this current report.
The Supervisory Board's resolutions concerning changes in the composition of the Company’s Management Board became effective as of their dates.
Legal basis: Par. 5.4 and Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005
The Management Board of Grupa Azoty S.A. (the “Company”) announces that it has received questions from the Company’s shareholder concerning the impact of the COVID-19 pandemic on the Polimery Police project, including, without limitation, questions regarding:
The Company’s answers are provided in the attachment to this report.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 43/2020 of October 7th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on October 9th 2020 Grupa Azoty Polyolefins S.A., a subsidiary of the Company and Grupa Azoty Zakłady Chemiczne Police S.A. (the“Subsidiary”), executed an agreement to amend the turnkey engineering, procurement and construction contract for the Polimery Police project dated May 11th 2019 (the “EPC Contract”) (see Current Report No. 28/2019 of May 11th 2019) between the Subsidiary and Hyundai Engineering Co., Ltd. (the “Contractor”).
The amendment agreement provides, among other things, for a EUR 33.2m increase in the Contractor's remuneration and a three-month extension of the timescale for the Polimery Police project.
The Company's Management Board further announces that the conditions precedent to the execution of the amendment agreement, as specified in Current Report No. 43/2020 of October 7th 2020, i.e. securing relevant corporate approvals from the Subsidiary's Supervisory Board and General Meeting and amending the relevant investment and shareholders agreements (see Current Report No. 24/2020 of May 31st 2020), have been fulfilled.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 23/2020 of May 31st 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on October 7th 2020 an intercreditor agreement (the “Intercreditor Agreement”) was concluded between Grupa Azoty Polyolefins S.A., a subsidiary of the Company and Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”) (the“Subsidiary”), and a syndicate of financial institutions comprising: Alior Bank S.A., Bank Gospodarstwa Krajowego, Bank Ochrony Środowiska S.A., Bank Polska Kasa Opieki S.A. (“Bank Pekao”), BNP Paribas Bank Polska S.A., the European Bank for Reconstruction and Development, Industrial and Commercial Bank of China (Europe) S.A. Poland Branch, mBank S.A., Powszechna Kasa Oszczędności Bank Polski S.A., Powszechny Zakład Ubezpieczeń S.A., Powszechny Zakład Ubezpieczeń na Życie S.A., PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych BIS 2 and Santander Bank Polska S.A. (the “Syndicate”), as well as ICBC Standard Bank PLC, the Company, GA Police, Hyundai Engineering Co., Ltd., Korea Overseas Infrastructure & Urban Development Corporation and Grupa LOTOS S.A.
The conclusion of the Intercreditor Agreement is another step in the process of securing the availability of senior debt financing for the implementation of the Polimery Police project (the “Project”) on a project finance basis. Debt financing to be made available for the implementation of the Project in the form of: (i) a EUR-denominated term facility of up to EUR 487,800,000; (ii) a USD-denominated term facility of up to USD 537,700,000; (iii) a VAT facility of up to PLN 150,000,000, and (iv) a working capital facility of up to USD 180,000,000 has been granted by the Syndicate under the credit facilities agreement of May 31st 2020 concluded between the Subsidiary as the borrower, the Syndicate as the lenders, and certain other parties (the „Credit Facilities Agreement”) (see Current Report No. 23/2020 of May 31st 2020). The conclusion of the Intercreditor Agreement is one of the conditions precedent to disbursement of funds under the Credit Facilities Agreement.
Other conditions precedent to disbursement of funds under the Credit Facilities Agreement include conclusion of relevant security documents as provided for therein.
The Company’s Management Board announces that in performance of the relevant provisions of the Credit Facilities Agreement, on October 7th 2020 the Subsidiary and certain other obligors (including the Company) executed agreements and other documents providing, among other things, for: (i) the creation of registered and financial pledges over all shares in the Subsidiary held by the Company and GA Police; (ii) the creation of a registered floating charge over a variable pool of chattels and property rights forming part of the Subsidiary’s business; (iii) the creation of registered and financial pledges over receivables from bank accounts held by the Subsidiary; (iv) the grant of a power of attorney over bank accounts held by the Subsidiary; (v) the establishment of contractual mortgage over real property in Police owned or held in perpetual usufruct by the Subsidiary; (vi) the execution by the Subsidiary, the Company and GA Police of notarial deeds on submission to enforcement; (vii) security assignment of the Subsidiary’s rights and claims under insurance and other relevant contracts; and (viii) security assignment of rights and claims under subordinated loans to the Subsidiary (including under subordinated loans from the Company and GA Police and the support loan guarantee agreement between the Company, GA Police, the Subsidiary and Bank Pekao).
The registered pledges and floating charge will be created upon entry in the register of pledges. The mortgage will be established upon entry in the land and mortgage register. All filings required for the entries will be made as soon as practicable. All of the above security interests have been created in favour of Bank Pekao, which acts as the security agent.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on October 7th 2020 the Management Board of Grupa Azoty Polyolefins S.A., a subsidiary of the Company and Grupa Azoty Zakłady Chemiczne Police S.A. (the“Subsidiary”), adopted a resolution on conditional conclusion of an agreement to amend the turnkey engineering, procurement and construction contract for the Polimery Police project dated May 11th 2019 (the “EPC Contract”) (see Current Report No. 28/2019 of May 11th 2019) between the Subsidiary and Hyundai Engineering Co., Ltd. (the “Contractor”).
The amendment agreement provides, among other things, for a EUR 33.2m increase in the Contractor’s remuneration; and a three-month extension of the timescale for the Polimery Police project.
The Company’s Management Board would also like to point out that pursuant to the resolution, execution of the amendment agreement is conditional upon and subject to securing relevant corporate approvals from the Subsidiary’s governing bodies and amending the relevant investment and shareholders agreements (see Current Report No. 24/2020 of May 31st 2020).
Execution of the agreement to amend the EPC Contract will be promptly announced by the Company in a separate current report.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”), acting pursuant to Art. 428.5 of the Commercial Companies Code, presents its answers to the questions asked by a shareholder under Art. 428.1 of the Commercial Companies Code at the Extraordinary General Meeting held on August 20th 2020.
QUSTION 1:
In 2020, Grupa Azoty’s debt increased by PLN 873m, to a record high of PLN 3,624m, with net debt/EBITDA at 2.3. Does the Company intend to incur further debt and, if so, to what extent, and do the existing credit facility agreements provide for any caps on the Company’s level of debt?
ANSWER:
Under the corporate financing agreements, the Grupa Azoty Group (the “Group”) and the financing banks have agreed that in the period from December 31st 2020 to June 30th 2023, i.e. during Group’s heaviest commitment to the financing of the ‘Polimery Police’ project (the “Project”), the Group’s consolidated net debt/EBITDA may reach 3.5x. Subsequently, the ratio should again stand at 3.0x or less.
In line with the calculation method agreed on with the financing institutions, the ratio will not include net debt or EBITDA of Grupa Azoty Polyolefins S.A. (“GA Polyolefins”), referred to for calculation purposes as the Excluded Company, which implements the Project under a Project Finance arrangement with limited recourse to the Sponsors.
What is more, in accordance with the ratio calculation method agreed on with the financing institutions following changes in applicable accounting and financial reporting laws and regulations subsequent to the negotiation of the terms and conditions of the credit facility agreements, certain additional adjustments must be made to the calculated ratio. As a result, the Group’s current net debt/EBITDA ratio is actually lower than that disclosed in the consolidated financial statements.
In view of the foregoing and in line with the assumptions for the Group’s long-term financial plan, the increase in debt attributable to the provision by the Original Sponsors of the agreed level of equity financing for the Project in the form of contributions to the share capital of, and subordinated loans to, GA Polyolefins should not result in the breach of any covenants under the corporate financing agreements.
QUESTION 5:
Why has Grupa Azoty requested the shareholders to consent to the conclusion of agreements whose final terms and conditions have not been disclosed or agreed? Does the Management Board intend to convene another general meeting after the final terms and conditions have been negotiated?
ANSWER:
All material assumptions for the Share Pledge Agreement and the Assignment Agreement have been agreed on and approved by the Management Board, endorsed by the Supervisory Board, and presented to the General Meeting. Prior corporate consents are sought to fulfil conditions precedent under the Project financing agreements in order to ensure its implementation as planned.
Accordingly, the Management Board does not intend to convene another General Meeting to secure its consent to the final terms and conditions of the agreements, as the General Meeting, by virtue of Resolution No. 5 of August 20th 2020, already granted its consent for legal transactions which could result in disposal of the Company’s non-current assets with a market value exceeding 5% of the Company’s total assets, as provided for in the aforementioned assumptions for the Share Pledge Agreement and the Assignment Agreement.
The obtained corporate consents will only be updated if circumstances arise that may require changing the assumptions for the agreements, which is currently unlikely.
QUESTION 6:
Do we understand correctly that the Group, apart from to investing in GA Polyolefins shares and advancing loans to that subsidiary,
a) is planning pledge its shares therein to secure GA Polyolefins’ debt under the Credit Facilities Agreement?
ANSWER:
The Management Board can confirm that, as already announced in Current Reports No. 23/2020 and 24/2020 of May 31st 2020, the credit facilities agreement of May 31st 2020 between GA Polyolefins and a syndicate of financial institutions (the “Credit Facilities Agreement”) provides for the creation of security interests both by the borrower (GA Polyolefins) in its assets and by all of the GA Polyolefins shareholders in all their shares in the company.
b) has committed to providing, if necessary, an additional loan of up to PLN 344m to GA Polyolefins; and
ANSWER:
In line with the financing structure of the ‘Polimery Police’ project, the Company, apart from making contributions to GA Polyolefins’ increased share capital, will provide financing in the form of a subordinated loan of PLN 344,463,738.00, which is consistent with the uniform equity financing structure agreed by all of the Project Sponsors, whereby subordinated loans are to account for 40% of the total equity to be provided.
c) has granted consent to assignment to Bank Pekao of the Group’s receivables under the loans? What are GA Polyolefins’ obligations towards Grupa Azoty to ensure reimbursement of the latter’s capital expenditure?
ANSWER:
The security package provided to the financing syndicate includes assignment of receivables under the loans extended to GA Polyolefins by all of its lenders, including by the Company.
Detailed terms and conditions of the Investment Agreements signed by Grupa Azoty Polyolefins S.A., including the mechanism and terms of reimbursement of the contributions made by the investors, are confidential, and their disclosure could pose a risk of loss or damage to GA Polyolefins. Therefore, pursuant to Art. 428.2 of the Commercial Companies Code, the Management Board refuses to answer this question.
In conclusion, the agreed security package provided to the financing syndicate is typical of debt financing under a Project Finance arrangement, whereby shareholders’ rights are subordinate to (senior) bank financing. This is in line with the market practice for the financing of large industrial projects.
QUESTION 7:
What are the exact amounts of the other shareholders’ (Lotos, Hyundai and KIND, i.e. the joint sponsors) contributions as at the date of the General Meeting?
ANSWER:
The amounts of the planned commitment of Grupa LOTOS S.A. (“Grupa Lotos”), Hyundai Engineering Co., Ltd (“Hyundai”) and Korea Overseas Infrastructure & Urban Development Corporation (“KIND”) (jointly: (“Joint Sponsors”) to the financing of the ‘Polimery Police’ project in the form of cash contributions to the increased share capital of GA Polyolefins and subordinated loans were announced in Current Report No. 24/2020 of May 31st 2020. The information provided therein remains valid as at the date of this report.
QUESTION 8:
Is Grupa Azoty the only shareholder to pledge its shares in GA Polyolefins and assign to Bank Pekao its receivables under the loans to GA Polyolefins? Will the other GA Polyolefins shareholders share the risk with Grupa Azoty and pledge their shares in GA Polyolefins in favour of Bank Pekao?
ANSWER:
As already mentioned in the answers to questions 6 b) and 6 c), all shares in Grupa Azoty Polyolefins S.A. (including those held by the Joint Sponsors of the Project) will be pledged as part registered and financial pledges. In accordance with the Credit Facilities Agreement, security interests will also be created in the rights and receivables of all lenders of Grupa Azoty Polyolefins S.A. under subordinated loans extended thereto.
QUESTION 9:
Have the Joint Sponsors disbursed any loans to GA Polyolefins yet? If so, in what amount, and will any receivables under those loans be assigned to Bank Pekao? What is the amount of the loans disbursed by Grupa Azoty to GA Polyolefins so far?
ANSWER:
No subordinated loans have been disbursed by the Joint Sponsors as yet. The Joint Sponsors’ investment is subject to the fulfilment of conditions precedent under the investment agreements. As the process to fulfil the conditions precedent is ongoing, as at the date of this answer the equity financing transaction, i.e. an increase in Grupa Azoty Polyolefins S.A.’s share capital through issue of shares to the Joint Sponsors, has not been closed, and no subordinated loans have been made available by the Joint Sponsors. Information on the milestones of the Project’s equity financing, including on the share capital increase and acquisition of shares in Grupa Azoty Polyolefins S.A. by the Joint Sponsors, will be announced by the Company in separate current reports.
The answer to the question about the assignment of receivables under the loans is provided in the answer to Question 8.
QUESTION 10:
What are the events of default that would allow Bank Pekao/the Syndicate to take over the pledged GA Polyolefins shares or exercise voting rights attached thereto?
ANSWER:
The detailed terms and conditions of the Credit Facilities Agreement, including the list of potential events of default, are confidential, and their disclosure could pose a risk of loss or damage to Grupa Azoty Polyolefins S.A. Therefore, pursuant to Art. 428.2 of the Commercial Companies Code, the Management Board refuses to answer this question.
QUESTION 14:
Do we understand correctly that if GA Polyolefins fails to perform its obligations under the Credit Facilities Agreement, Bank Pekao may be able take over Grupa Azoty’s controlling interest in GA Polyolefins but will not be entitled to take over shares held by the other shareholders? If so, would Bank Pekao be entitled to freely sell the shares taken over from Grupa Azoty to, for instance, Orlen or Lotos?
ANSWER:
As registered and financial pledges will be created over all shares in Grupa Azoty Polyolefins S.A., the security agent will have absolute discretion to seek their enforcement with respect to any or all shares in GA Polyolefins held by any of the shareholders.
The other questions asked by the shareholder were not answered by the Management Board as they concerned matters which were not included in the agenda of the Extraordinary General Meeting held on August 20th 2020. Pursuant to Art. 428.1 of the Commercial Companies Code, at a general meeting, the management board is required to provide shareholders – at their request – with information on the company if such information is needed to assess a matter placed on the meeting’s agenda. Therefore, a shareholder may request information on the company only if such information is necessary for the assessment of a matter included in the agenda of the general meeting (right to information at the general meeting). The right to information applies specifically to matters which are included in the agenda, provided that such right is not excluded pursuant to Art. 428.2 of the Commercial Companies Code.
Moreover, having regard to our policy of open communication, the Management Board would like to point out that all material information on the Company’s corporate decisions and other developments related to the implementation of the ‘Polimery Police’ Project is promptly published by the Company in current reports in compliance with applicable laws and regulations.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”), acting pursuant to Art. 428.5 of the Commercial Companies Code, presents its answers to the questions asked by a shareholder under Art. 428.1 of the Commercial Companies Code at the Extraordinary General Meeting held on August 20th 2020.
1. Why has the syndicate requested a pledge on company shares?
The Polimery Police project (the “Project”), implemented by the special purpose vehicle Grupa Azoty Polyolefins S.A., is financed under a Project Finance arrangement, with recourse to the Sponsors, limited to capped guarantees and security interests in Project-related assets.
In accordance with a standard market practice, under Project Finance arrangements debt financing takes priority over equity and loans provided by Sponsors, which is ensured by various contractual provisions, including the pledging by all of the Project Sponsors, including Grupa Azoty S.A., of their shares in the SPV.
2. Is the bank syndicate composed of mostly Polish or foreign institutions?
The syndicate of financial institutions financing the Project (the “Syndicate”) comprises some of the largest Polish financial institutions and foreign banks operating in Poland, the vast majority of which have been serving and financing Grupa Azoty for years. The Syndicate is composed of:
Bank Polska Kasa Opieki S.A. acts as the facility and security agent.
These institutions have a strong financial standing and a proven track record in financing major capital projects under a Project Finance arrangement and thus guarantee financial stability and security as well as a professional standard of service for the Project.
3. If the Syndicate is mostly composed of Polish institutions, why is the English version to prevail in dispute resolution in Poland?
It is an accepted market practice that credit facility agreements relating to projects financed under a Project Finance arrangement follow long-established legal standards developed under and based on English law and as such are concluded in English. In the case of the Credit Facilities Agreement concluded to finance the Project, we draw attention to the fact that both the Korean partners of the Project (Hyundai Engineering Co. Ltd. and Korea Overseas Infrastructure & Urban Development Corporation) and some of the financing institutions, including the European Bank for Reconstruction and Development), are foreign or international entities whose corporate language is English. It should be noted that English, being both a widely spoken language and the language of choice for credit facility agreements, ensures that all parties to the Project have a uniform understanding of the documents they enter into and are on an equal footing in the related negotiations, as well as mitigates the risk of divergent construction of various contractual provisions.
4. Why should the English version of the Credit Facilities Agreement prevail over its Polish version in proceedings before Polish courts?
The Credit Facilities Agreement has been executed in the English language for the reasons explained in the answer to Question 3. It should also be noted that in accordance with its terms and conditions the Credit Facilities Agreement is governed by and construed under the laws of England. The Agreement provides for arbitration before the LCIA (London Court of International Arbitration) and dispute resolution in accordance with the UNCITRAL Arbitration Rules. The Credit Facilities Agreement further provides that the option to have a dispute resolved before the said Arbitration Tribunal does not preclude the financing parties from seeking to enforce their rights before other courts.
Please note that where an action is commenced before a Polish court (if allowed under the Credit Facilities Agreement or other financing documents), Polish translations of all or part of the documentation may be used.
5. Are there any discrepancies between the Polish and English versions of the Agreement?
Generally, the Polish versions of agreements negotiated in English are their true and accurate translations. However, it should be borne in mind that interpreters are not present during negotiations, and, in particular, ensuring interpretation of the process of negotiating the extensive and highly specialised Project Finance package was impossible. Accordingly, there exists a certain limited risk that the Polish translation may somewhat deviate from the carefully and exactly worded English originals of the financing documentation.
6. What are the terms of the pledge?
a) How long will the shares remain pledged?
b) Who will be entitled to receive dividends and other distributions for the shares?
c) What are the assumptions for the Share Pledge and Assignment Agreements?
a) In accordance with the Assumptions for the Share Pledge Agreement, the Company’s shares in Grupa Azoty Polyolefins S.A. are to be pledged to secure the senior loans until the latter are repaid in full in accordance with the Credit Facilities Agreement, but in any case no later than December 15th 2035, as announced by the Company in Current Report No. 23/2020 of May 31st 2020.
b) All the Sponsors pledging shares in Grupa Azoty Polyolefins S.A. (including the Company) will be entitled to exercise any rights attached thereto to the extent agreed, including to receive dividend as provided for in the Credit Facilities Agreement, so long as no event of default under the Credit Facilities Agreement occurs, which, in accordance with accepted practice and the Credit Facilities Agreements, would entitle the security agent (Bank Pekao) to commence the exercise of rights attached to the pledged shares, including the right to receive dividend.
However, please note that any dividends will be paid, and any subordinated loans from the Sponsors (including the Company) will be repaid, in accordance with the distribution terms and conditions agreed between the Sponsors under the Shareholders Agreement, subject to prior allocation of funds and provisions necessary for the servicing of the senior loans in accordance with the Credit Facilities Agreement.
c) The Assumptions for the Share Pledge Agreement and agreement for the assignment of the Company's claims and rights against Grupa Azoty Polyolefins S.A under a subordinated loan agreement and a support loan guarantee agreement (the “Assignment Agreement”) were published by the Company in Current Report No. 33/2020 of July 24th 2020, together with draft resolutions to be voted on by the Company’s Extraordinary General Meeting on August 20th 2020, and as such are available in the General Meeting section of the Company’s website.
7. Are the credit facilities granted to finance the construction of a facility which is to manufacture goods in order to generate profits for us, that is the shareholders, or is the facility to be constructed at the shareholders’ expense to be subsequently taken over by the financing group?
The question is imprecise and not fully intelligible. Nevertheless, the Company would like to reiterate the fact that the credit facilities for the financing of the Project are granted by a syndicate of financial institutions to Grupa Azoty Polyolefins S.A., a special purpose vehicle established to implement the Project and a subsidiary of the Company.
The Project is expected to bring numerous benefits to the shareholders of Grupa Azoty Polyolefins S.A., including the Company, and thus to Company shareholders, in particular economic benefits in the form of repayments of interest on and the principal of the subordinated loans and dividend payments. Depreciation and amortisation of the Project’s assets, primarily of the production plant and technologies acquired by Grupa Azoty Polyolefins S.A., will be charged to its costs.
The main cost for the shareholders of Grupa Azoty Polyolefins S.A. is the cost of raising the required equity, including both funds contributed directly to the SPV’s share capital and funds provided as subordinated loans.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, a list of shareholders holding 5% or more of total voting rights at the Extraordinary General Meeting held on August 20th 2020, specifying the number of votes conferred by the shares held by each shareholder, and their percentage share in the votes represented at that Extraordinary General Meeting and in the total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2019, item 623, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions passed by the Company’s Extraordinary General Meeting on August 20th 2020, together with the results of voting.
The documents being the subject of the resolutions voted on at the Extraordinary General Meeting have been published on the Company’s website at http://tarnow.grupaazoty.com/pl/relacje/walne.html
In connection with the use of a computer system for voting and counting the votes, the Extraordinary General Meeting decided not to appoint a Ballot Counting Committee.
The Extraordinary General Meeting did not leave any items of the planned agenda unaddressed.
During the Extraordinary General Meeting, an objection was raised and recorded in the minutes with regard to Resolution No. 5 to grant consent for legal transactions which could result in disposal of the Company’s non-current assets with a market value exceeding 5% of the Company’s total assets, as provided for in the assumptions for the Share Pledge Agreement and the Assignment Agreement.
Legal basis: Par. 19.1.6 and Par. 19.1.9 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Following a decision of the Management Board of the subsidiary Grupa Azoty Zakłady Azotowe Puławy S.A. (the “Subsidiary”) to change the accounting policy for accounting for free-of-charge allocation of CO2 emission rights and the related change in the Subsidiary’s estimated financial results, published in Current Report No. 30/2020 of August 18th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) publishes an update of the estimated consolidated results of the Grupa Azoty Group for Q2 2020, published in Current Report No. 35/2020 of July 31st 2020.
The change in accounting for the free-of-charge allocation of CO2 emission rights does not affect the Company’s annual results – the change relates to accounting for the allocation during the year.
The total effect of the change is PLN (-)57.3m on the Group’s consolidated net profit for H1 2020 and PLN (-)70.8m on the consolidated EBITDA.
Adjusted estimated selected consolidated financial results of the Group for Q2 2020:
Revenue: PLN 2,268.9m
EBITDA: PLN 315.08m
Net profit: PLN 70.11m
The estimated separate financial results of the Company for Q2 2020, published in Current Report No. 35/2020 of July 31st 2020, remain unchanged.
The Management Board of the Company also publishes:
Estimated selected consolidated financial results of the Group for H1 2020:
Revenue: PLN 5,372.60m
EBITDA: PLN 752.79m
Net profit: PLN 235.10m
The Company’s Management Board further announces that the changes affect the data and information contained in the Q1 2020 report issued on May 21st 2020. Adjusted data and information from the Q1 2020 report will be released to the public in the interim report for H1 2020, to be published on September 10th 2020.
The Grupa Azoty Group’s financial statements are currently being reviewed by an auditor, as required under applicable regulations. The amounts presented above are estimates and are subject to change. The final financial results for H1 2020 will be released on September 10th 2020.
Legal basis: Article 17(1) of 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 of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Reports No. 14/2020 of February 18th 2020, No. 16/2020 of March 18th 2020 and No. 20/2020 of April 7th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on August 3rd 2020 the District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register, registered an increase in the share capital of the Company's subsidiary Grupa Azoty Polyolefins S.A. of Police (“GA Polyolefins”).
Following the registration, the share capital of PGA Polyolefins was increased from PLN 467,339,000 to PLN 599,283,310. Currently, the total number of shares of all issues is 59,928,331 (previously: 46,733,900). Their par value is PLN 10 per share.
As a result of the share capital increase, the number of shares held by the Company rose from 21,964,933 to 28,166,316 shares with a par value of PLN 10 per share and total value of PLN 281,663,160.
At present, the Company's direct interest in the share capital of GA Polyolefins is 47.00%. The other shareholder in the subsidiary is Grupa Azoty Zakłady Chemiczne Police S.A., also a subsidiary of the Company.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the "Company") announces that the Company has been notified by electronic means of a decision of the President of the Energy Regulatory Office to grant PLN 14m in compensation for 2019 to the Company under the Act on the Compensation Scheme for Energy-Intensive Sectors and Subsectors. The actual amount of the compensation does not differ materially from that estimated by the Company and included in the estimated results as published in Current Report No. 35/2020 of July 31st 2020.
The Company further announces that its subsidiary Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. has obtained a similar compensatory decision by the President of the Energy Regulatory Office, whereby it has been awarded PLN 16.1m, which was included by the Company in its estimated consolidated results as published in Current Report No. 35/2020 of July 31st 2020.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to the information provided to date on the effects of COVID-19 on the Company’s and the Grupa Azoty Group’s operations (see Current Report No. 18/2020 of March 26th 2020 and the information contained in the periodic reports for 2019 and for Q1 2020), the Management Board of Grupa Azoty S.A. (the „Company”), having regard to the coronavirus impact mitigation steps taken to date, has assessed the effects of the COVID-19 pandemic on the Company’s and the Grupa Azoty Group’s operations in Q2 2020. The estimates below also reflect the general impact of other factors on the Company’s and the Group’s operations.
Plastics
The Grupa Azoty Group’s operations in the plastics segment are directly related to the electrical engineering and automotive industries, where the effects of the pandemic have been the strongest. Administrative restrictions introduced at the end of March 2020 to limit the spread of COVID-19 affected demand and caused a drop in caprolactam and polyamide prices, both on the European and Asian markets. Before the demand for Grupa Azoty products declined, in March 2020 production activities were discontinued by certain manufacturers in all segments of the plastics value chain. In Q2 2020, the plastics segment reported a 43% year-on-year decline in revenue, attributable to the COVID-19 pandemic and disruption to the demand and supply balance on the market.
Chemicals
In April 2020, the prices of oxo alcohols fell as the result of a downtrend in propylene prices and lower market demand caused by the COVID-19 situation. Since early June 2020, a recovery has been seen in the market of alcohols and plasticizers, accompanied by an increase in prices driven by higher prices of propylene. In Q2 2020, production of oxo alcohols was maintained at maximum levels, and in the case of plasticisers 75% of the production capacity was utilised. The Q2 2020 revenue from oxo alcohols was 32% down on the corresponding period of the previous year.
Deteriorated demand and price levels were also seen in the melamine market. In Q2 2020, revenue from melamine sales was 38% lower year on year.
In the titanium white area, no significant impact of COVID-19 was identified in relation to the scale of the Grupa Azoty Group’s business, despite a marked decline in demand on certain markets.
The crisis related to the spread of the COVID-19 pandemic also affected the RedNOx product market. Lower fuel consumption supressed demand for NOXy products (the main product in this business area). In other industries, such as power plants or glass, paper and cement manufacturers, where the segment’s products are also used, revenue was also lower. In the case of RedNOx products, in Q2 2020 sales were down 5% year on year.
Agro Fertilizers
The COVID-19 pandemic had no material effect on the implementation of contract sales schedules in the second quarter of 2020. In Q2 2020, the sales fell by approximately 11% year on year.
However, there were delays in payments for the goods supplied, but their scale in the second quarter of 2020 was not significant.
The Grupa Azoty Group is taking steps to minimise the impact of the COVID-19 pandemic on the Group’s operations, for instance by using solutions available on the market to support working capital management and adjust the production volumes to sales opportunities. In view of the declines in revenue, the Company and some of its subsidiaries will take steps to use the funding mechanisms under the Act on Special Arrangements to Prevent, Counteract and Combat COVID-19, Other Infectious Diseases and Crisis Situations Caused by Them of March 2nd 2020, version 4.0. The amount of support for the Grupa Azoty Group is estimated at approximately PLN 50m, including approximately PLN 16m for the Company.
In view of the foregoing, the Company publishes the following estimates:
Estimated selected consolidated financial results of the Grupa Azoty Group for Q2 2020
Revenue: PLN 2,268.9m
EBITDA: PLN 353.4m
Net profit: PLN 105.6m
Estimated selected separate financial results of the Company for Q2 2020
Revenue: PLN 303.8m
EBITDA: PLN 25.1m
Net profit: PLN 160.3m
The Company’s Management Board further reports that the above results include compensation payable to eligible companies of the Grupa Azoty Group for 2019 and for H1 2020 under the Act on the Compensation Scheme for Energy-Intensive Sectors and Subsectors, estimated at some PLN 111.6m. The final amount of the compensation will be determined after the Grupa Azoty Group companies’ applications are verified by the Energy Regulatory Office.
The Grupa Azoty Group’s financial results are currently being reviewed by the auditor, as required under applicable regulations. The amounts presented above are estimates and are subject to change. The final financial results for H1 2020 will be released on September 10th 2020.
Legal basis: Article 17.1 of 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 of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and
periodic information
Further to Current Report No. 32/2020 and Current Report No. 33/2020 of July
24th 2020, in connection with an Extraordinary General Meeting (the “EGM”)
convened for August 20th 2020, the Management Board of Grupa Azoty S.A. (the
“Company”) publishes, attached hereto, as supplementary documents concerning
matters included in the EGM’s agenda, the text of resolutions of the Company’s
Supervisory Board of July 30th 2020 concerning:
- an opinion on the Management Board’s proposal that the General Meeting of Grupa Azoty S.A. adopt the Remuneration Policy for Members of the Management Board and the Supervisory Board of Grupa Azoty S.A., as a supplement to item 7 of the EGM agenda, and
- an opinion on the Management Board’s proposal that the General Meeting pass a resolution to grant consent for legal transactions which could result in disposal of the Company’s non-current assets with a market value exceeding 5% of the Company’s total assets, as provided for in the assumptions for the Share Pledge Agreement and the Assignment Agreement, as a supplement to item 8 of the EGM agenda.
The resolutions will be posted on the Company’s website.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2019, item 623, as amended) – Current and periodic information.
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions to be debated at the Extraordinary General Meeting of the Company convened for August 20th 2020.
In addition, the Management Board publishes, attached hereto, the previously unpublished documents relating to matters to be considered at the Extraordinary General Meeting.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2019, item 623, as amended) – Current and periodic information
Acting pursuant to Art. 398, Art. 399.1 in conjunction with Art. 4021 and Art. 4022 of the Commercial Companies Code, and Art. 42.1.1) of Grupa Azoty S.A.’s Articles of Association, the Management Board of Grupa Azoty S.A. of Tarnów (the “Company”), entered in the Register of Businesses of the National Court Register by the District Court for Kraków-Śródmieście in Kraków, 12th Commercial Division of the National Court Register, under No. KRS 0000075450, Tax Identification Number (NIP): 873-000-68-29, with a share capital of PLN 495,977,420 (paid in full), hereby convenes an Extraordinary General Meeting of Grupa Azoty S.A. to be held on August 20th 2020, at 12:00 noon, at the Company’s registered office at ul. Kwiatkowskiego 20, Tarnów, Poland, in conference room 57/58, 1st floor.
The total number of Grupa Azoty shares is 99,195,484. As at August 20th 2020, the number of votes attached to these shares is 99,195,484.
AGENDA:
Right to participate in the General Meeting
Pursuant to Art. 406[1].1 of the Commercial Companies Code, the right to attend the Extraordinary General Meeting is vested in persons who are Company shareholders sixteen days prior to the date of the Extraordinary General Meeting, i.e. as at August 4th 2020 (the record date).
To be able to attend the Extraordinary General Meeting, holders of rights attached to book-entry bearer shares should submit, with the entity keeping their securities account, a request to be issued a personal certificate confirming their right to attend the Extraordinary General Meeting. The request should be submitted on or after the publication of the notice of the Extraordinary General Meeting, i.e. on or after July 24th 2020,and no later than on the first weekday following the record date, i.e. August 5th 2020. Personal certificates confirming the right to participate in the Extraordinary General Meeting will serve as the basis for preparation of records submitted to the entity operating the securities depository in accordance with the Act on Trading in Financial Instruments.
The list of shareholders entitled to attend the Extraordinary General Meeting will be displayed at the Company’s registered office at ul. Kwiatkowskiego 8, Tarnów, Poland, for three weekdays immediately preceding the date of the Extraordinary General Meeting, i.e. on August 17th, 18th and 19th 2020, from 8:00 am to 4:00 pm. A shareholder may request to be delivered the list of shareholders free of charge via electronic mail, by providing an email address to which the list should be delivered. The request may be submitted in electronic form to the following Company email address: ##lpact.ipgcdl#at#vgjeppodin.rdb##.
Right to participate in the Extraordinary General Meeting through a proxy
Shareholders may participate in the Extraordinary General Meeting of the Company and exercise their voting rights personally or through a proxy. Persons acting on behalf of legal persons should present valid excerpts from relevant registers specifying persons authorised to represent the legal persons.
A proxy may exercise all the rights of a shareholder at the Extraordinary General Meeting unless the power of proxy states otherwise. A proxy may grant further powers of proxy if permitted to do so under their power of proxy. A proxy may represent multiple shareholders and vote the shares of each shareholder differently. A shareholder whose shares are registered in more than one securities account may appoint a separate proxy to exercise the rights attached to the shares registered in each account. A shareholder whose shares are registered in an omnibus account may appoint separate proxies to exercise the rights attached to the shares registered in that account.
A power of proxy to participate in the Extraordinary General Meeting of Grupa Azoty S.A. and exercise voting rights must be in written or electronic form. As of the date of this notice, a form of electronic power of proxy is made available by the Company for downloading from www.grupaazoty.com. The grant of a power of proxy in electronic form must be notified to the Company by means of electronic communication. Along with a notification of granting a power of proxy in electronic form, the shareholder must send in scanned copies of the granted power of proxy, ID cards, passports or other documents enabling identification of the shareholder as the principal and of the appointed proxy. Where the power of proxy is granted by a legal person or an organisation referred to in Art. 33[1]of the Civil Code, a scanned copy of the principal’s entry in the relevant register must also be submitted. Where the proxy is a legal person or an organisation referred to in Art. 33[1]of the Civil Code, a scanned copy of the proxy’s entry in the relevant register must also be submitted. Any documents submitted via electronic means and originally prepared in a foreign language should be accompanied by a certified translation into Polish. All the above documents should be sent to: ##lpact.ipgcdl#at#vgjeppodin.rdb##. Together with a notification of granting a power of proxy, the shareholder sends in an email address through which the Company will be able to communicate with the shareholder and the proxy. The Company may take appropriate steps to identify the shareholder and the proxy. The identification procedure may involve contacting the shareholder and the proxy via a return electronic message or a return call to confirm that the power of proxy has actually been granted. A power of proxy in electronic form does not need to be signed with a qualified electronic signature.
The procedure for identification of the principal applies accordingly to a notification of revoking a power of proxy. Proxy appointment or revocation notifications which are not compliant with the requirements set out above have no legal effect with respect to the Company.
It is the shareholder who decides on the way of granting a power of proxy and the Company is not liable for any errors in filled-in forms or actions by the holders of powers of proxy. Sending in the above documents in electronic form does not release the proxy from the obligation to produce his/her identification documents when the attendance list of persons authorised to participate in the Extraordinary General Meeting of the Company is being prepared.
Shareholders’ right to request that a certain matter be placed on the agenda of the Extraordinary General Meeting
A shareholder or shareholders representing at least one-twentieth of the Company’s share capital may request that certain matters be placed on the agenda of the Extraordinary General Meeting. Any such request, together with a statement of grounds or a draft resolution on the proposed agenda item, should be submitted to the Company’s Management Board no later than 21 days prior to the scheduled date of the Extraordinary General Meeting, that is by July 30th 2020. The request may be submitted in electronic form to ##lpact.ipgcdl#at#vgjeppodin.rdb##, or in writing to the following address: Zarząd Grupy Azoty S.A. (Management Board of Grupa Azoty S.A.), ul. Kwiatkowskiego 8, 33-101, Tarnów, Poland.
Shareholders’ right to propose draft resolutions
A shareholder or shareholders representing at least one-twentieth of the share capital may submit, prior to the scheduled date of the Extraordinary General Meeting, draft resolutions on matters which have been or are to be placed on the agenda. Such draft resolutions may be sent in electronic form to ##lpact.ipgcdl#at#vgjeppodin.rdb##, or in writing to the following address: Zarząd Grupy Azoty S.A. (Management Board of Grupa Azoty S.A.), ul. Kwiatkowskiego 8, 33-101, Tarnów, Poland.
During the Extraordinary General Meeting, any shareholder may submit draft resolutions on matters placed on the agenda. Such draft resolutions should be in the Polish language.
Electronic communications
The Management Board of the Company does not provide for the possibility of participating in the Extraordinary General Meeting or taking the floor by means of electronic communication. The Management Board does not permit the exercise of voting rights by postal ballot or electronic means.
Access to documents
The documents to be presented to the Extraordinary General Meeting, including draft resolutions, will be available at the Company's registered office and on the Company's website at https://tarnow.grupaazoty.com/relacje-inwestorskie/walne-zgromadzenia from the date of convening the Extraordinary General Meeting.
Additionally, the draft resolutions and any previously unpublished documents pertaining to matters to be dealt with, and to resolutions to be voted on, at the General Meeting will be published pursuant to the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Any additional materials from the Company’s Management Board or Supervisory Board concerning matters placed on the agenda of the Extraordinary General Meeting or matters to be placed on the agenda before the date of the Extraordinary General Meeting will be published on the Company’s website promptly after they are issued.
Corporate website
Information concerning the General Meeting is available on the Company’s website at www.grupaazoty.com, in the Investor Relations/General Meeting of Shareholders section (i.e. at https://tarnow.grupaazoty.com/relacje-inwestorskie/walne-zgromadzenia).
INFORMATION ON PERSONAL DATA PROTECTION IN CONNECTION WITH THE CONVENING OF THE GENERAL MEETING OF GRUPA AZOTY S.A.
Pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council (GDPR), Grupa Azoty S.A. (the “Company”) wishes to advise you that in connection with the convening of the Company’s Extraordinary General Meeting (the “EGM”) the Company will process the personal data of the Company shareholders, their proxies authorised to vote and other persons authorised to exercise voting rights at the EGM (jointly referred to as the “Shareholders” or “you”).
Therefore, the Company states that:
a. The controller of the personal data collected is Grupa Azoty S.A. of Tarnów; You can contact the Company by writing to the email address ##ipgcdl#at#vgjeppodin.rdb## or postal address: Grupa Azoty Spółka Akcyjna, ul. E. Kwiatkowskiego 8, 33-101 Tarnów, Poland;
b. For matters related to the protection of personal data at the Company, you can contact the Data Protection Officer via the following email: ##xds.ipgcdl#at#vgjeppodin.rdb## or by post: Grupa Azoty Spółka Akcyjna, ul. E. Kwiatkowskiego 8, 33-101 Tarnów, Poland.
c. The data will be processed for the following purposes: compliance by the Company with its legal obligations under the Commercial Companies Code, imposed on it as a public company in connection with the convening of the EGM , allowing the Shareholders to exercise their rights in relation to the Company, as well as establishment, exercise or defence of any legal claims by the Company;
d. The Company processes (i) personal data identifying the Shareholder, such as the first name, surname, address of residence or address for correspondence and Personal Identification Number (PESEL), (ii) data included in powers of attorney/proxy, (iii) data on shares held and rights attached to them, such as: the number, type and serial numbers of shares and number of voting rights conferred by such shares, and (iv) where Shareholders contact the Company via email – their email address;
e. Shareholders’ personal data may be collected by the Company from entities operating the securities depository, as well as from other Shareholders – with respect to the data included in powers of proxy;
f. The legal basis for the processing of your personal data by the Company is:
g. Recipients of the personal data include entities providing hosting services for IT tools used for the purpose of contacting Shareholders, entities providing document archiving services, and other Shareholders – with respect to making the list of shareholders available for inspection in accordance with Art. 407 of the Commercial Companies Code;
h. Personal data included in the lists of shareholders, attendance lists and powers of attorney/proxy is stored for the period of the Company's existence, and may afterwards be transferred to an entity designated to store documents in accordance with the Commercial Companies Code; personal data related to email contact is stored for a period allowing the Company to demonstrate its compliance with obligations imposed by the Commercial Companies Code and for a period of prescription of any potential claims of or against the Company;
i. Where data is provided directly to the Company, provision of data is required by the Commercial Companies Code and in order to enable verification of the Shareholder's identity, and failure to do so results in the Shareholder’s inability to participate in the EGM; provision of the email address is voluntary but required to enable email contact between the Company and the Shareholder, with failure to provide it precluding such email contact;
j. You have the right to request access to your personal data and to demand its rectification, erasure or restriction of its processing, right to object to processing of the data, as well as the right to data portability; you should bear in mind that these rights are not absolute and that the applicable laws and regulations provide for certain exceptions as to when they may be exercised;
k. You may lodge a complaint with the President of the Data Protection Authority in the event of any irregularities in the processing of your personal data.
Legal basis: Par. 19.1.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
[1] In particular, Art. 401, 407, 410 and 412 of the Commercial Companies Code.
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (“Company”) publishes, attached to this report, a list of shareholders holding 5% or more of total voting rights at the Annual General Meeting held on June 29th 2020, specifying the number of voting rights conferred by the shares held by each shareholder, and their percentage share in the voting rights represented at the Annual General Meeting and in total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2019, item 623).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on June 29th 2020, pursuant to resolutions of the Company’s Annual General Meeting, the following persons were appointed as members to the Company’s Supervisory Board of the 11th joint term of office:
Mr Marcin Pawlicki – as the Chair of the Supervisory Board,
Ms Monika Fill,
Mr Robert Kapka – candidate elected by the Company's employees,
Mr Wojciech Krysztofik,
Mr Bartłomiej Litwińczuk,
Mr Michał Maziarka,
Mr Zbigniew Paprocki – candidate elected by the Company’s employees,
Mr Roman Romaniszyn – candidate elected by the Company's employees.
The resolutions to appoint members of the Company’s Supervisory Board of the 11th term of office took effect from their date.
The Company’s Management Board further states that: The newly appointed Chair and Members of the Supervisory Board have submitted representations to the effect that the activities they are engaged in outside the Company are not competing with the Company’s business and that they are not shareholders or partners in any company or partnership or members of the governing bodies of any other legal persons which would compete with the Company’s business.
The representations also include statements to the effect that the new Chair and Members of the Supervisory Board of the 10th term of office are not entered in the Register of Insolvent Debtors maintained pursuant to the Act on the National Court Register.
A brief description of the educational background, qualifications, previously held positions and employment record of the newly appointed Members of the Company’s Supervisory Board of the 11th term is attached to this current report.
Legal basis: Par. 5.5. of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art.
56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa
Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions
passed by the Company’s Annual General Meeting on June 29th 2020, together with
the results of voting.
The documents voted on by the Annual General Meeting are available on the Company’s website at http://tarnow.grupaazoty.com/pl/relacje/walne.html. They have also been published with the Company’s separate and consolidated full-year reports, and attached to Current Report No. 26/2020 of June 2nd 2020.
In connection with the use of a computer system for voting and counting the votes, the Annual General Meeting decided not to appoint a Ballot Counting Committee.
The Company’s Management Board also publishes, attached to this report, a draft resolution which was put to the vote, but was not carried.
The Annual General Meeting did not leave any items of the planned agenda unaddressed. During the Annual General Meeting, no objections were raised to be recorded in the minutes.
Legal basis: Par. 19.1.6, Par. 19.1.7, Par. 19.1.8, and Par. 19.1.9 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005
The Management Board of Grupa Azoty S.A. (the “Company”) announces that in connection with the Company’s Annual General Meeting convened for June 29th 2020 it received questions from a shareholder concerning:
- accounting for the acquisition of COMPO EXPERT and the effects of the acquisition,
- subscription for new shares issued as part of a share capital increase at Grupa Azoty Zakłady Chemiczne Police S.A.
The Company’s answers are provided in the attachment to this report.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on June 24th 2020 it received from Powszechne Towarzystwo Emerytalne PZU S.A., representing the shareholder Otwarty Fundusz Emerytalny PZU Złota Jesień, a notice of intent to nominate Bartłomiej Litwińczuk as a candidate for a member of the Company’s Supervisory Board during an election to be held at the Company’s General Meeting on June 29th 2020.
The candidate’s curriculum vitae is attached as an appendix to this Current Report.
The Company further announces that Bartłomiej Litwińczuk has given his consent to stand for election to the Company’s Supervisory Board.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated April 20th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2018, item 512, as amended) – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the draft resolutions to be considered and voted on at the Company’s Annual General Meeting convened for June 29th 2020.
In addition, the Management Board attaches to this report the documents pertaining to matters to be considered at the Annual General Meeting, including those not previously published.
Legal basis: Section 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Acting pursuant to Art. 399.1 in conjunction with Art. 402[1] and Art. 402[2] of the Commercial Companies Code, the Management Board of Grupa Azoty S.A. of Tarnów (the “Company”), entered in the Business Register of the National Court Register by the District Court for Kraków-Śródmieście in Kraków, 12th Commercial Division of the National Court Register, under No. KRS 0000075450, Tax Identification Number (NIP): 873-000-68-29, with a share capital of PLN 495,977,420 (paid in full), hereby convenes an Annual General Meeting of Grupa Azoty S.A.to be heldat 10.00 am on June 29th 2020 at the Company’s registered office: ul. Kwiatkowskiego 8, Tarnów, conference room 57/58, 1st floor.
The total number of Grupa Azoty shares is 99,195,484. As at June 29th 2020, the number of votes attached to these shares is 99,195,484.
Agenda:
Right to attend the Annual General Meeting
Pursuant to Art. 406[1].1 of the Commercial Companies Code, the right to attend the Meeting is vested in persons who are Company shareholders sixteen days prior to the date of the General Meeting, i.e. as at June 13th 2020 (the record date).
To be able to attend the Annual General Meeting, holders of rights attached to book-entry bearer shares should submit, with the entity keeping their securities account, a request to be issued a personal certificate confirming their right to attend the Annual General Meeting.
The request should be submitted on or after the publication of the notice of the Annual General Meeting, i.e. on or after June 2nd 2020,and no later than on the first weekday following the record date, i.e. June 15th 2020. Personal certificates confirming the right to attend the Annual General Meeting will serve as the basis for preparation of records submitted to the entity operating the securities depository in accordance with the Act on Trading in Financial Instruments.
The list of shareholders entitled to attend the Annual General Meeting will be displayed at the Company’s registered office at ul. Kwiatkowskiego 8, Tarnów, Poland, for three weekdays immediately preceding the date of the Annual General Meeting, i.e. on June 24th, 25th and 26th 2020, from 8:00 am to 4:00 pm. A shareholder may request to be delivered the list of shareholders free of charge via electronic mail, by providing an email address to which the list should be delivered. The request may be submitted in electronic form to the following Company email address: ##lpact.ipgcdl#at#vgjeppodin.rdb##.
Right to attend the Annual General Meeting through a proxy
Shareholders may attend the Company’s Annual General Meeting and exercise their voting rights personally or through a proxy. Persons acting on behalf of legal persons should present valid excerpts from relevant registers specifying persons authorised to represent the legal persons.
A proxy may exercise all the shareholder's rights at the Annual General Meeting, unless the power of proxy states otherwise. A proxy may grant further powers of proxy if permitted to do so under their power of proxy. A proxy may represent multiple shareholders and vote the shares of each shareholder differently. A shareholder whose shares are registered in more than one securities account may appoint a separate proxy to exercise the rights attached to the shares registered in each account. A shareholder whose shares are registered in an omnibus account may appoint separate proxies to exercise the rights attached to the shares registered in that account.
A power of proxy to attend the Annual General Meeting of Grupa Azoty S.A. and exercise voting rights must be in written or electronic form. As of the date of this notice, a form of electronic power of proxy is made available by the Company for downloading from www.grupaazoty.com. The grant of a power of proxy in electronic form must be notified to the Company by means of electronic communication. Along with a notification of granting a power of proxy in electronic form, the shareholder must send in scanned copies of the granted power of proxy, ID cards, passports or other documents enabling identification of the shareholder as the principal and of the appointed proxy. Where the power of proxy is granted by a legal person or an organisation referred to in Art. 33[1]of the Civil Code, a scanned copy of the principal’s entry in the relevant register must also be submitted. Where the proxy is a legal person or an organisation referred to in Art. 33[1]of the Civil Code, a scanned copy of the proxy’s entry in the relevant register must also be submitted. Any documents submitted via electronic means and originally prepared in a foreign language should be accompanied by a certified translation into Polish. All the above documents should be sent to: ##lpact.ipgcdl#at#vgjeppodin.rdb##. Together with a notification of granting a power of proxy, the shareholder sends in an email address through which the Company will be able to communicate with the shareholder and the proxy. The Company may take appropriate steps to identify the shareholder and the proxy. The identification procedure may involve contacting the shareholder and the proxy via a return electronic message or a return call to confirm that the power of proxy has actually been granted. A power of proxy in electronic form does not need to be signed with a qualified electronic signature.
The procedure for identification of the principal applies accordingly to a notification of revoking a power of proxy. Proxy appointment or revocation notifications which are not compliant with the requirements set out above have no legal effect with respect to the Company.
It is the shareholder who decides on how a power of proxy will be granted and the Company is not liable for any errors in filled-in forms or actions by the holders of powers of proxy. Sending in the above documents in electronic form does not release the proxy from the obligation to produce his/her identification documents when the attendance list of persons entitled to attend the Company’s Annual General Meeting is being prepared.
Shareholders’ right to request that a certain matter be placed on the agenda of the Annual General Meeting
A shareholder or shareholders representing at least one-twentieth of the Company’s share capital may request that certain matters be placed on the agenda of the Annual General Meeting. Any such request, together with a statement of grounds or a draft resolution on the proposed agenda item, should be submitted to the Company’s Management Board no later than 21 days prior to the scheduled date of the Annual General Meeting, that is by June 8th 2020. The request may be submitted in electronic form to ##lpact.ipgcdl#at#vgjeppodin.rdb##, or in writing to the following address: Zarząd Grupy Azoty S.A. (Management Board of Grupa Azoty S.A.), ul. Kwiatkowskiego 8, 33-101, Tarnów, Poland.
Shareholders’ right to propose draft resolutions
A shareholder or shareholders representing at least one-twentieth of the share capital may submit, prior to the scheduled date of the Annual General Meeting, draft resolutions on matters which have been or are to be placed on the agenda. Such draft resolutions may be sent in electronic form to ##lpact.ipgcdl#at#vgjeppodin.rdb##, or in writing to the following address: Zarząd Grupy Azoty S.A. (Management Board of Grupa Azoty S.A.), ul. Kwiatkowskiego 8, 33-101, Tarnów, Poland.
During the Annual General Meeting, any shareholder may submit draft resolutions on matters placed on the agenda. Such draft resolutions should be in the Polish language.
Electronic communications
The Company’s Management Board does not provide for the possibility of attending the General Meeting or taking the floor by means of electronic communication. The Management Board does not permit the exercise of voting rights by postal ballot or by means of electronic communication.
Access to documents
The documents to be presented to the Annual General Meeting, including draft resolutions, will be available at the Company's registered office and on the Company's website at http://tarnow.grupaazoty.com/pl/relacje/walne from the date of convening the Annual General Meeting.
Additionally, the draft resolutions and any previously unpublished documents pertaining to matters to be dealt with, and to resolutions to be voted on, at the General Meeting will be published pursuant to the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Any comments from the Company’s Management Board or Supervisory Board concerning matters placed on the agenda of the Annual General Meeting or matters to be placed on the agenda before the date of the Annual General Meeting will be published on the Company’s website promptly after they are issued.
Corporate website
Information concerning the General Meeting is available in the Investor Relations/General Meeting of Shareholders section of the Company’s website www.grupaazoty.com.
INFORMATION ON PERSONAL DATA PROTECTION
IN CONNECTION WITH THE CONVENING OF THE GENERAL MEETING OF
GRUPA AZOTY S.A.
Pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council (GDPR), Grupa Azoty S.A. (the “Company”) wishes to advise you that in connection with the convening of the Company’s Annual General Meeting (the “AGM”) the Company will process the personal data of its shareholders, their proxies authorised to vote, and other persons authorised to exercise voting rights at the AGM (jointly referred to as the “Shareholders” or “you”).
Therefore, the Company states that:
a) The controller of the personal data collected is Grupa Azoty S.A. of Tarnów; You can contact the Company by writing to the email address ##ipgcdl#at#vgjeppodin.rdb## or postal address: Grupa Azoty Spółka Akcyjna, ul. E. Kwiatkowskiego 8, 33-101 Tarnów, Poland;
b) For matters related to the protection of personal data at the Company, you can contact the Data Protection Officer via the following email: ##xds.ipgcdl#at#vgjeppodin.rdb## or by post: Grupa Azoty Spółka Akcyjna, ul. E. Kwiatkowskiego 8, 33-101 Tarnów, Poland
c) The data will be processed for the following purposes: compliance by the Company with its legal obligations under the Commercial Companies Code, imposed on it as a public company in connection with the convening of the AGM[1], enabling the Shareholders to exercise their rights in relation to the Company, as well as establishing facts for the purpose of enforcing of or defending against any legal claims by the Company;
d) The Company processes (i) personal data identifying the Shareholder, such as the first name, surname, address of residence or address for correspondence and Personal Identification Number (PESEL), (ii) data included in powers of attorney/proxy, (iii) data on shares held and rights attached to them, such as: the number, type and serial numbers of shares and number of voting rights conferred by such shares, and (iv) where Shareholders contact the Company via email – their email address;
e) Shareholders’ personal data may be collected by the Company from entities operating the securities depository, as well as from other Shareholders – with respect to the data included in powers of proxy;
f) The legal basis for the processing of your personal data by the Company is:
g) Recipients of the personal data include entities providing hosting services for IT tools used for the purpose of contacting Shareholders, entities providing document archiving services, and other Shareholders – with respect to making the list of shareholders available for inspection in accordance with Art. 407 of the Commercial Companies Code;
h) Personal data included in the lists of shareholders, attendance lists and powers of attorney/proxy is stored for the period of the Company's existence, and may afterwards be transferred to an entity designated to store documents in accordance with the Commercial Companies Code; personal data related to email contact is stored for a period allowing the Company to demonstrate its compliance with obligations imposed by the Commercial Companies Code and for a period of prescription of any potential claims of or against the Company;
i) Where data is provided directly to the Company, provision of such data is required by the Commercial Companies Code and in order to enable verification of the Shareholder's identity, and failure to provide the data results in the Shareholder’s inability to attend the AGM; provision of the email address is voluntary but required to enable email contact between the Company and the Shareholder, with failure to provide it precluding such email contact;
j) You have the right to request access to your personal data and to demand its rectification, erasure or restriction of its processing, right to object to processing of the data, as well as the right to data portability; you should bear in mind that these rights are not absolute and that the applicable laws and regulations provide for certain exceptions as to when they may be exercised;
k) You may lodge a complaint with the President of the Data Protection Authority in the event of any irregularities in the processing of your personal data.
[1] In particular, Art. 401, 407, 410 and 412 of the Commercial Companies Code.
Legal basis: Section 19.1.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal grounds: Article 17 (1) of the MAR – confidential information
With reference to current reports no. 24/2019 of 26 April 2019, no. 58/2019 of 31 October 2019, no. 73/2019 of 22 November 2019, no. 74/2019 of 6 December 2019, no. 77/2019 of 13 December 2019, no. 80/2019 of 23 December 2019 and no. 23/2020 of 31 May 2020, the Management Board of Grupa Azoty S.A. (hereinafter: the “Issuer”) would like to inform you that, on 31 May 2020, the Issuer, the Issuer’s subsidiary – Grupa Azoty Zakłady Chemiczne “Police” S.A. (hereinafter: the “Subsidiary”, and jointly with the Issuer - the “Original Sponsors”) and the Original Sponsors’ subsidiary – Grupa Azoty Polyolefins S.A. (hereinafter: “Polyolefins”) concluded agreements with Grupa Lotos S.A. (“Grupa Lotos”), Hyundai Engineering Co., Ltd (hereinafter: “Hyundai”) and Korea Overseas Infrastructure & Urban Development Corporation (hereinafter: “KIND”, jointly with Grupa Lotos and Hyundai - the “Co-Sponsors”, and jointly with the Original Sponsors and Polyolefins - the “Parties”), concerning the terms and conditions of equity investment and subordinated debt financing (“Transaction Documentation”) in connection with Polyolefins developing an investment project known as “Polimery Police” (hereinafter: the “Project”).
The following agreements were executed as part of the Transaction Documentation: (i) an investment agreement between the Original Sponsors, Polyolefins and Grupa Lotos; (ii) a loan agreement between Polyolefins and Grupa Lotos; (iii) an investment agreement between the Original Sponsors, Polyolefins, Hyundai and KIND; (iv) a loan agreement between Polyolefins and KIND; (v) a loan agreement between the Issuer and Polyolefins; (vi) a loan agreement between the Subsidiary and Polyolefins and (vii) a shareholders’ agreement between all the Parties.
Based on the Transaction Documentation, Grupa Lotos undertook to invest in the Project the total amount of PLN 500,000,000 (hereinafter: “Lotos’s Investment”) by: (a) contributing cash in the total amount of PLN 300,000,000 to cover the increased share capital of Polyolefins and take up new shares in Polyolefins, and (b) providing a subordinated loan to Polyolefins in the amount of PLN 200,000,000. Also, Hyundai undertook to invest a total of USD 73,000,000 in the Project (hereinafter: “Hyundai’s Investment”) by contributing cash to cover the increased share capital of Polyolefins and take up new shares in Polyolefins, and KIND undertook to invest a total of USD 57,000,000 in the Project (hereinafter: “KIND’s Investment”, and jointly with Lotos’s Investment and Hyundai's Investment - “Co-Sponsors’ Investment”) by (i) contributing cash in the amount of USD 5,000,000 to cover the increased share capital of Polyolefins and take up new shares in Polyolefins, and (ii) providing a subordinated loan to Polyolefins in the amount of USD 52,000,000.
By the date of this report, the Original Sponsors have contributed the amount of PLN 523,760,114.55 into Polyolefins as an equity contribution to cover the shares they take up in Polyolefins, namely, the Issuer has contributed PLN 219,649,330 and the Subsidiary has contributed PLN 304,110,784.55. Based on the Transaction Documentation, the Original Sponsors additionally undertook to: (i) contribute additional equity to Polyolefins up to the maximum amount of PLN 297,046,245.70 (the Issuer’s undertaking); (ii) contribute additional equity to Polyolefins up to the maximum amount of PLN 278,545,884.65 (the Subsidiary’s undertaking); and (ii) provide loans in the total amount of PLN 732,901,520.00, including PLN 344,463,738.00 from the Issuer and PLN 388,437,782.00 from the Subsidiary (the “Original Sponsors’ Investment”).
The performance of the Co-Sponsors’ undertakings under the Co-Sponsors’ Investment (“Closing”) is conditional upon the fulfilment of the conditions precedent agreed in the Transaction Documentation, including, without limitation: the Initial Sponsors contributing funds to cover the Initial Sponsors’ Investment, the execution of the senior facility agreement with a syndicate of banks (“Debt Financing Agreement”) and the fulfilment of certain conditions precedent stipulated in the Debt Financing Agreement.
According to the provisions of the Transaction Documentation, the target shareholding structure of Polyolefins will be as follows: the Original Sponsors will hold a total of 64.93% of the shares, including the Issuer holding directly 30.52% and the Subsidiary holding 34.41%; Grupa Lotos will hold 17.3% of the shares; Hyundai will hold 16.63% of the shares and KIND will hold 1.14% of the shares. These percentages will represent both the share in the Company’s share capital and the total number of votes in Polyolefins’ General Meeting.
The Parties agreed that the lock-up period in which Hyundai and KIND cannot sell shares in Polyolefins (with certain exceptions) will continue until the lapse of 3 years from the Project completion date, and in the case of Lotos – until the full repayment of the debt under the Debt Financing Agreement, but no longer than until 15 December 2035. The Parties also agreed a procedure for the sale by the Co-Sponsors of shares in Polyolefins after the expiry of the agreed lock-up periods.
Under the Transaction Documentation, the Original Sponsors may conduct a public offering after the expiry of the lock-up period. Also, the Parties agreed on a put option for Hyundai and KIND to sell to the Original Sponsors, and a call option for the Original Sponsors to buy from Hyundai, in each case in relation to Polyolefins shares with a total value (calculated on the basis of the price originally paid by Hyundai and KIND for such shares) not exceeding USD 70,000,000, for the same amount expressed in USD, in the case of the put option – additionally reduced by all dividends paid to Hyundai and KIND. The Parties agreed that the options will expire on 31 December 2035, at the latest.
In the shareholders’ agreement, the Parties agreed the rules of corporate governance in Polyolefins. Under the shareholders’ agreement, the Management Board of Polyolefins will consist of 1 to 5 members elected by the Supervisory Board for a co-extensive 3-year term of office. The person nominated by the Original Sponsor holding the greater number of shares should be appointed by the Supervisory Board as President of the Management Board of Polyolefins. The Polyolefins Supervisory Board will consist of 5 to 7 members elected for a co-extensive 3-year term of office. Members of the Supervisory Board will be appointed as follows: the Original Sponsor holding the greater number of shares has the right to appoint 2 to 3 members of the Supervisory Board, including the Vice-Chairman of the Supervisory Board, and the Original Sponsor holding the smaller number of shares has the right to appoint 1 to 2 members of the Supervisory Board, including the Chairman of the Supervisory Board. As long as Grupa Lotos holds at least 3% of the shares in Polyolefins, Grupa Lotos will have the right to appoint one member of the Supervisory Board. As long as Hyundai and KIND jointly hold at least 3% of the shares in Polyolefins, Hyundai and KIND will have the right to jointly appoint one member of the Supervisory Board. Also, the Parties have agreed a list of reserved matters requiring the consent of the Supervisory Board, including those that require the affirmative votes of the members appointed by the Co-Sponsors. The shareholders’ agreement also defines the list of matters reserved for the decision of the General Meeting requiring a qualified majority of 83% of the affirmative votes at the General Meeting. The list of reserved matters does not differ from the market standards adopted for transactions of this kind. The Parties have also agreed the rules of voting on the individual matters.
The Transaction Documentation provides for liquidated damages for breaching the essential contractual provisions, including both liquidated damages due from the Initial Sponsors and those reserved for the Initial Sponsors or Polyolefins, typical for this type of transaction. The amount of liquidated damages depends on the significance of a given breach. Individual agreements concluded as part of the Transaction Documentation establish the maximum liability for most of the obligations of the Original Sponsors and Polyolefins towards the Co-Sponsors, typical for this type of transactions.
Based on the Transaction Documentation, until the Closing date, Grupa Lotos, Hyundai and KIND have the right to withdraw from the Transaction if an event or circumstances occur that have or may have a material adverse impact on, inter alia, the Project or the financial condition of Polyolefins and make it impossible to implement the Project on the agreed terms.
The Issuer will provide information about the subsequent stages of equity financing of the Project, including the Closing, in separate current reports.
Legal grounds: Article 17 section 1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of the European Union of 12 June 2014, No. L 173/1 as amended).
Legal grounds: Article 17 (1) of the MAR – confidential information
The Management Board of Grupa Azoty S.A. (hereinafter: the “Issuer”) would like to inform you that on 31 May 2020, the Issuer’s and Grupa Azoty Zakłady Chemiczne “Police” S.A.’s subsidiary – Grupa Azoty Polyolefins S.A. (hereinafter: “Polyolefins”) signed a facilities agreement for the purpose of obtaining senior debt financing necessary for Polyolefins to implement the “Polimery Police” project (“Project”).
The facilities agreement was executed between Polyolefins and a consortium of financial institutions consisting of: Alior Bank S.A., Bank Gospodarstwa Krajowego, Bank Ochrony Środowiska S.A., Bank Polska Kasa Opieki S.A. (the bank coordinating the Project financing transaction), BNP Paribas Bank Polska S.A., the European Bank for Reconstruction and Development, Industrial and Commercial Bank of China (Europe) S.A. Poland Branch, mBank S.A., Powszechna Kasa Oszczędności Bank Polski S.A., Powszechny Zakład Ubezpieczeń S.A., Powszechny Zakład Ubezpieczeń na Życie S.A., PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych BIS 2, Santander Bank Polska S.A. (“Consortium”) and ICBC Standard Bank PLC (“Facilities Agreement”).
The Facilities Agreement provides for the granting of the following credit facilities by the Consortium:
a) a EUR term loan facility in the maximum amount of EUR 487,800,000, which will be used in particular for financing or refinancing the Project costs during construction stage. The final maturity date is 29 November 2030, provided that, after the fulfilment of the conditions stipulated in the Facilities Agreement, it may be extended until 15 December 2035. The facility bears interest at a variable rate based on the EURIBOR reference rate;
b) a USD term loan facility in the maximum amount of USD 537,700,000, which will be used in particular for financing or refinancing the Project costs during construction stage. The final maturity date is 29 November 2030, provided that, after the fulfilment of the conditions stipulated in the Facilities Agreement, it may be extended until 15 December 2035. The facility bears interest at a variable rate based on the LIBOR reference rate;
c) a working capital VAT facility in the maximum amount of PLN 150,000,000, which will be used for financing or refinancing of payments of VAT on the Project costs during construction stage. The final maturity date has been agreed as the day falling 6 (six) months after the actual Project completion date, but no later than 30 November 2024. The facility bears interest at a variable rate based on the WIBOR reference rate;
d) a working capital loan facility in the maximum amount of USD 180,000,000, the purpose of which is to finance or refinance Polyolefins’ operating expenses and working capital. The final maturity date has been agreed as the day falling 5 (five) years after the financial close, but no later than 29 November 2025. The facility bears interest at a variable rate based on the LIBOR reference rate;
The basic security of the credit facilities includes, without limitation: a mortgage on Polyolefins’ rights to real estate (owned or held on perpetual usufruct), registered pledges on all assets and rights owned by Polyolefins, registered and financial pledges on receivables from Polyolefins’ bank accounts, registered and financial pledges on all shares in Polyolefins held by Polyolefins’ shareholders (including the Issuer), declarations of submission to voluntary enforcement and security assignments.
Additionally, in connection with the Facilities Agreement, the Issuer and Grupa Azoty Zakłady Chemiczne “Police” S.A. entered into an agreement with Polyolefins and Bank Polska Kasa Opieki S.A. (acting as the facility agent and the security agent) concerning a guarantee to provide a support loan (in the form of a subordinated loan) in the amount of EUR 105,000,000, the main purpose of which is to cover the potential liquidity shortfall, construction cost overruns, operating expenses and debt service in the operating period.
Disbursement of funds under the Facilities Agreement will occur after the fulfilment of the conditions precedent stipulated in the Facilities Agreement.
The Management Board would also like to inform you that all corporate consents necessary to sign the Facilities Agreement have been obtained.
The Issuer will provide information about the subsequent stages of senior debt financing of the Project, including the financial closing, in separate current reports.
Legal grounds: Article 17 section 1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of the European Union of 12 June 2014, No. L 173/1 as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 21/2020 of May 27th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) that on May 29th 2020, the Company’s Supervisory Board gave a favourable opinion on the proposal of the Company’s Management Board to the Annual General Meeting to allocate the entire net profit for the financial year 2019, of PLN 58,249,388.32, to the Company’s reserve funds.
A final decision on the 2019 profit allocation will be made by the Annual General Meeting.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, As amended).
Legal basis: Article 17(1) of MAR – Inside information
Grupa Azoty S.A. (the “Company”) announces that on May 27th 2020 its Management Board passed a resolution to recommend that the Company’s entire net profit for the financial year 2019, of PLN 58,249,388.32, be allocated to the Company’s statutory reserve funds.
The Management Board recommends that the entire net profit for 2019 be retained by the Company, as this would provide financial security for capex projects in the pipeline, Polimery Police in particular.
In order to implement the resolution, the Management Board will request the Supervisory Board to assess the proposal and the General Meeting to decide on the allocation of net profit for the financial year 2019.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 12/2020 of February 17th 2020, Current Report No. 14/2020 of February 18th 2020 and Current Report No. 16/2020 of March 18th 2020, Grupa Azoty S.A. (the “Company”) announces that on April 7th 2020 the Company’s Supervisory Board, in connection with Section 2 of Resolution No. 7 of the Company’s Extraordinary General Meeting dated February 17th 2020, approved the execution of an agreement to subscribe for 6,201,383 shares in Grupa Azoty Polyolefins S.A. (“GA Polyolefins”) as part of the issue of Series F shares in GA Polyolefins for theissue price of PLN 47.90 per share, as determined by the General Meeting of GA Polyolefins, i.e. for a total of PLN 297,046,245.70.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 3/2020 of January 21st 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that the release date for the separate and consolidated full-year reports for 2019 has been changed from April 1st 2020 to April 8th 2020.Furthermore, the Company’s Management Board announces that the release date for the consolidated report on payments to governments has also been changed to April 8th 2020.
Accordingly, the Management Board announces that periodic reports due for release in 2020 will be released as per the following updated schedule:
The 2019 consolidated report on payments to governments will be released on April 8th 2020.
Legal basis: Par. 80.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
In line with the recommendations of the European Securities and Markets Authority (ESMA) and of the Polish Financial Supervision Authority, the Management Board of Grupa Azoty S.A. (the “Company”) publishes information on the current situation of the Company and its Group (the “Grupa Azoty Group”) in relation to the continuing effects of the outbreak of the SARS-CoV-19 coronavirus causing the COVID-19 infectious disease (“COVID-19”).
The Company’s Management Board is constantly monitoring the developments and the impact of the COVID-19 pandemic on the Company’s and the Grupa Azoty Group’s operations. The Company and other Group companies have implemented procedures ensuring prompt response of competent emergency services in a bid to limit disruptions to their operations to a minimum. The Company has also issued recommendations designed to reduce the risk of employees contracting the disease. No major declines in sales volumes, no disruptions in the supply of raw materials, merchandise and services and no rise in employee absences that would interfere with continuity of production have been reported by the Grupa Azoty Group so far.
The Company is focused on identifying risks associated with the epidemic threat in order to take preventive measures in advance. The Company has identified risk areas related to the COVID-19 pandemic, which may have a material bearing on the Company’s future financial performance. These risks include:
The risk of sales disruption by segments:
The above assessment has been prepared according to the Company’s best knowledge as at the date of this current report. The actual effects of the COVID-19 pandemic and its impact on the Company’s operations are unknown, cannot be estimated and depend on factors that are beyond the Company’s control and are subject to dynamic changes.
Therefore, it is not possible today to accurately predict the impact of the COVID-19 pandemic on the Company’s operations, parameters, forecasts and financial condition or on the progress of the Company’s or other Group companies’ investment projects. However, an increase in the risk of a material adverse effect of the COVID-19 pandemic on the Group’s operations in the short term cannot be ruled out.
Any new developments causing a material change in the Company’s economic condition or significantly affecting its current or future financial performance will be reported in subsequent current reports.
Legal basis:
Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces the expected effect of one-off non-monetary items on the Company’s consolidated financial statements for 2019.
The Company's Management Board analysed indications of impairment and a need to recognise impairment losses on the Company's assets, including shares in subsidiaries and their assets recognised in the consolidated financial statements. As a result, it was decided that impairment tests were necessary. Following the impairment tests, an impairment loss was recognised on the assets of Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A., a subsidiary, because of sharp declines in sales volumes and prices on the sulphur market.
The effect of the impairment loss on the Company's consolidated 2019 results is as follows:
The impairment loss on non-current assets at the consolidated level necessitates recognition of an impairment loss of PLN 32.2m on shares in Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. in the separate financial statements of Grupa Azoty S.A.
The effect of the above on the Company's separate profit/(loss) for 2019 is as follows:
The impairment loss will be charged against finance costs so it will not reduce the Company's separate EBITDA for 2019.
At the same time, the Company's Management Board analysed the possibility of utilising the asset related to future benefits arising from the Company's operations conducted in the Krakowski Park Technologiczny Special Economic Zone (“SEZ”) with respect to the polyamide plant II.
As at December 31st 2018, the Company recognised an asset in respect of the benefits it had expected from operating in the SEZ, in the amount corresponding to the expected tax savings on those operations, estimated at PLN 25.9m. As at June 30th 2019, the amount was reduced to PLN 21.5m. Because the realisation of that asset is not certain given the loss incurred in 2019 on the operations conducted in the SSE and the difficult outlook for that part of business in the near future, a decision was made to reverse the asset.
The reversal will not affect the separate or consolidated EBITDA but will only have an effect on the separate and consolidated net profit for 2019 in the amount of PLN - 21.5m.
As the audit of the Company’s financial statements for 2019 has not yet been completed, the above amounts are not final and are subject to change.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 12/2020 of February 17th 2020 and Current Report No. 14/2020 of February 18th 2020, Grupa Azoty S.A. (the “Company”) announces that on March 18th 2020 the Company’s Management Board, in connection with Section 2 of Resolution No. 7 of the Company’s Extraordinary General Meeting of February 17th 2020,passed a resolution to acquire 6,201,383 (six million, two hundred and one thousand, three hundred and eighty-three) shares in Grupa Azoty Polyolefins S.A. (“GAPolyolefins”) as part of the issue of Series F shares in GA Polyolefins for an issue price set by the GA Polyolefins GeneralMeeting at PLN 47.90 (forty-seven złoty, 90/100) per share, i.e. for a total amount of PLN 297,046,245.70 (two hundred and ninety-seven million, forty-six thousand, two hundred and forty-five złoty, 70/100).
In order to implement the resolution, the Management Board will request the consent of the Supervisory Board for the above actions.
Currently, the Company holds directly 47% of shares in GA Polyolefins, while 53% of GA Polyolefins shares are held by the Company’s subsidiary, Grupa Azoty Zakłady Chemiczne Police S.A.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Acting pursuant to Art. 428.5 of the Commercial Companies Code, the Management Board of Grupa Azoty S.A (the “Company”) presents its answers to the questions asked by a shareholder under Art. 428.1 of the Commercial Companies Code at the Extraordinary General Meeting held on February 17th 2020.
1. Please provide information on the final financing structure of the Polimery Police project. If it is not ready yet, please provide details of the currently planned financing structure (including the sources, amounts and estimated costs of the financing, security used and its terms and conditions). What amount of external (non-equity) financing is needed for the project?
The target financing structure of the Polimery Police project (the “Polimery Project”) was negotiated and agreed on by the Original Sponsors, i.e. the Company, Grupa Azoty Zakłady Chemiczne Police S.A. (“Grupa Azoty Police”) and Grupa Azoty Polyolefins S.A. (“GA Polyolefins”) on one side and the Joint Sponsors, i.e. Hyundai Engineering Co., Ltd, Korea Overseas Infrastructure & Urban Development Corporation and Grupa Lotos S.A. on the other, under term-sheets for equity investment(as announced by the Company’s Management Board in Current Report No. 50/2019 of September 19th 2019, Current Report No. 77/2019 of December 13th 2019 and Current Report No. 80/2019 of December 23rd 2019), and with financial institutions under key terms of senior debt financing and the commitment letters issued by the institutions to GA Polyolefins.
GA Polyolefins has obtained binding senior debt financing commitments from financing institutions, which, together with the Joint Sponsors’ commitments made under the term-sheets and the planned investment by the Original Sponsors, provide the funding needed to implement the Polimery Project. Moreover, the negotiated terms and conditions of financing for the Polimery Project are in line with project finance standards applicable to large industrial projects of this type.
The Polimery Project financing structure, with a budget estimated at around EUR 1.52bn, comprises:
The details of the financing structure, including the amounts committed by each financing institution, estimated costs of financing, required security and other material terms and conditions are confidential and may not be disclosed to the public.
2. Why are agenda items 7 and 8 concerning loans to be removed from the agenda? Is the Grupa Azoty Group still planning to provide the loans covered by those items, and if so, what are the loan terms? We believe the Management Board’s initial decision was correct – provision of the loans will require the General Meeting’s consent.
Having considered the position of the Company’s Supervisory Board on issuing an opinion on the proposals submitted to the General Meeting and covered by items 7 and 8 of the agenda, the Company’s Management Board requested the General Meeting not to consider the proposals, as announced in Current Report No. 10/2020 of February 14th 2020, to which the Supervisory Board’s position was attached as an appendix, and in Current Report No. 11/2020 of February 14th 2020. As per the position presented by the Supervisory Board, in the light of the Company’s Articles of Association, granting consent to the Management Board to enter into legal transactions, including to advance loans exceeding PLN 6,000,000 (six million złoty), falls within the Supervisory Board’s powers, unless the exemption conditions stipulated in the Company’s Articles of Association are met.
The Company’s Management Board plans to advance intra-group loans, including subordinated loans to GA Polyolefins as a source of equity financing, in accordance with the financing structure described in the answer to question 1. Each loan will be subject to the Company obtaining appropriate corporate approvals required by the Company’s Articles of Association, including consent from the Supervisory Board.
3. What is the estimated consolidated net debt to EBITDA ratio at the end of 2019 (including the Polimery Project)?
It is not yet possible to answer this question as the 2019 financial results have not yet been published. The process of preparing and auditing the 2019 financial statements is ongoing. The full-year reports of the Grupa Azoty Group companies for 2019 are planned to be published on April 1st 2020. In its periodic reports, the Company provides all financial data required by law to enable a reliable assessment of its financial condition.
4. What margins are expected to be delivered by Grupa Azoty Polyolefins (GAP)? What are the expected IRR and NPV indicators for the project?
The Polimery Police project was evaluated based on profitability indicators customarily used to measure rate of return that were specifically calculated for the project. These are:
The starting point for the feasibility study was a financial model developed and updated by GA Polyolefins, the special purpose vehicle established to implement the Polimery Project, with the support of an independent financial adviser. The financial projections provided by the model were used in the negotiations of borrowing terms with the banks, to conduct a private investor test, and to develop the Polimery Police Project’s business plan.
The findings of these economic analyses confirm the Polimery Project’s feasibility; in particular, the Polimery Project’s net present value (NPV) is positive, and the internal rate of return (IRR) is higher than the minimum rate of return required by the investor (cost of capital), which indicates that the Polimery Project is profitable to the Company and the Grupa Azoty Group.
The Project’s profitability was also compared with the expected market rates of return on investments in polypropylene manufacturers. It was determined that the Project offers a rate of return above the market range of expected returns on alternative investments.
Detailed information on GA Polyolefins’ expected margins constitutes a trade secret.
5. Has the Grupa Azoty Group secured propane supplies for the polypropylene unit? If so, who is the supplier?
GA Polyolefins has identified key suppliers of propane for the PDH unit, and in 2019 it signed letters of intent for propane supplies in quantities significantly above what the company needs. In line with market practice, negotiations of contracts for the supply of feedstocks will be closed and relevant contracts will be signed one year before the first delivery, that is in 2021. This being said, it should be noted that the propane market is liquid, enabling propane to be purchased in spot transactions, and most market advisers believe this trend will continue in the future. All propylene for the PP unit will come from the PDH unit.
6. What are the benefits to Grupa Azoty S.A. and its shareholders of using the method of financing the Polimery Project proposed by the Management Board, that is funding the Project partly with a direct equity contribution and partly with intra-group loans, as compared with a simpler option of funding the Project solely by Grupa Azoty making an equity investment in GAP, which would allow GA to acquire direct and full control of GAP and cash flows to GAP, and to create added value for Grupa Azoty shareholders by increasing its direct shareholding in GAP?
The Polimery Project financing structure reflects the existing ownership interest of both Original Sponsors and the related division of risks.
It is possible the Company will decide to increase its direct equity interest in GA Polyolefins in the future, including by purchasing shares from Joint Sponsors.
The agreed structure of the aggregate financing to be provided by the Original Sponsors, comprising an equity contribution (60%) and subordinated loans (40%), ensures the Company (directly and indirectly) will hold full control of GA Polyolefins, while being able to secure optimum cash flows under the Polimery Project to create added value for shareholders and taking into account the Joint Sponsors’ expectations for return on capital employed that are in line with market standards.
Partly financing projects implemented on a project finance basis with long-term subordinated loans is a common market practice, offering more flexible options for distributing funds to investors during commercial operation.
7. What are the estimated tax costs (interest, tax on civil-law transactions, income tax, including those related to share capital increases in companies) associated with the proposed financing model for GAP? Has the Grupa Azoty Group or any other Group companies reported any tax schemes (within the meaning of MDR) to tax authorities with respect to the planned financing structure of the Polimery Project? If so, what schemes have been reported?
The proposed financing model is a result of legal and tax analyses designed to achieve a compromise that would meet the expectations of all Polimery Project’s stakeholders. In particular, the equity contribution being partly made in the form of contributions to statutory reserve funds enhances GA Polyolefins’ ability to pay dividends sooner, as any accumulated losses and the mandatory contribution of 8% of the annual net profit can be covered with statutory reserve funds created in this way.
By resolution of the Company’s Extraordinary General Meeting of February 18th 2020, the share capital of GA Polyolefins was increased by PLN 131,944,310 through the issue of 13,194,431 ordinary shares at the issue price of PLN 47.90. The related tax on civil-law transactions amounted to PLN 659,722.
On February 20th 2020, the GA Polyolefins Management Board filed an MDR-3 report with a tax scheme related to new capital being raised through the issue of new shares, with the issue price set above their nominal price.
On January 20th 2020, an MDR-1 form was filed by the Company’s advisor as another entity required to provide information on the scheme.
A part of the equity contribution being made by the Company and Grupa Azoty Police in the form of long-term subordinated loans will allow those companies, as GA Polyolefins shareholders, to earn interest income until the loans are repaid, with GA Polyolefins benefitting from the tax shield of reduced taxable income.
Operating in the Pomeranian Special Economic Zone, GA Polyolefins will use a corporate income tax exemption until 2026, therefore these effects are expected after that date.
8. What is the Management Board’s current dividend policy? Considering the costs of the Polimery Project, does the Management Board intend to recommend dividend payments in the coming years? If so, what will the payout ratio be?
In line with the approved Update to the Grupa Azoty Group’s Strategy for 2013−2020, the dividend policy provides for a dividend payout ratio of up to 60% of net profit, with no lower end of the dividend payout range set given the ongoing extensive capital investment programme and the risk of an economic downturn. The financing structure is optimised according to the Grupa Azoty Group’s needs and capabilities to ensure long-term financial security and successful implementation of key investment plans.
The dividend recommendations of the Company’s Management Board are always thoroughly analysed taking into account the Grupa Azoty Group’s strategic perspective and current financial position. The decision on the amount of dividend paid for a given year rests with the Company’s Annual General Meeting.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 12/2020 of February 17th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on February 18th 2020 the Extraordinary General Meeting of Grupa Azoty Polyolefins S.A. (“GA Polyolefins”), a subsidiary of the Company, resolved to increase the share capital of GA Polyolefins by PLN 131,944,310.00 (one hundred and thirty-one million, nine hundred and forty-four thousand, three hundred and ten złoty) through an issue of 13,194,431 (thirteen million, one hundred and ninety-four thousand, four hundred and thirty-one) new Series F registered shares with a par value of PLN 10 (ten złoty, 00/100) per share. The issue price of each Series F share shall be PLN 47.90 (forty-seven złoty, 90/100).
The new shares will be taken up by way of a private placement by:
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, a list of shareholders holding 5% or more of total voting rights at the Extraordinary General Meeting held on February 17th 2020, specifying the number of votes conferred by the shares held by each shareholder, and their percentage share in the voting rights represented at that Extraordinary General Meeting and in the total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2019, item 623).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions passed by the Company’s Extraordinary General Meeting on February 17th 2020, together with voting results.
The documents being the subject of the resolutions voted on at the Extraordinary General Meeting have been published on the Company’s website at https://tarnow.grupaazoty.com/relacje-inwestorskie/walne-zgromadzenia
The Extraordinary General Meeting decided to remove the following items from the agenda:
- item 7: “Voting on a resolution to grant consent to the provision by Grupa Azoty S.A. to Grupa Azoty Polyolefins S.A., the SPV established to implement the Polimery Police project, of long-term loans subordinated to Grupa Azoty Polyolefins S.A.’s planned senior debt financing.”
- item 8: “Voting on a resolution to grant consent to the provision by Grupa Azoty S.A. to Grupa Azoty Zakłady Chemiczne Police S.A., Grupa Azoty Zakłady Azotowe Puławy S.A., and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. of long-term cash loans in excess of PLN 100m each to finance investment projects.”
- item 9: “Changes in the composition of the Supervisory Board of Grupa Azoty S.A.”
Therefore, by Resolution No. 5 of the Extraordinary General Meeting, its new agenda was adopted.
The Management Board also publishes, attached hereto, draft resolutions on removal of items 7, 8 and 9, submitted by an eligible individual shareholder.
The resolutions, attached hereto, have been passed by the Extraordinary General Meeting of the Company.
During the meeting an objection was raised and recorded in the minutes, concerning Resolution No. 4 on removal of item 9 from the agenda of the Extraordinary General Meeting.
Legal basis: Par. 19.1.6, Par. 19.1.7 and Par. 19.1.9 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis:
Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2018, item 512, as amended) – Current and periodic information
Revision of document submitted to Grupa Azoty Extraordinary General Meeting convened for February 17th 2020
Further to Current Report No. 10/2020 of February 14th 2020, the Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached hereto, the revised text of the document submitted to the Company’s Extraordinary General Meeting convened for February 17th 2020, concerning item 8 of the agenda.
The revision consists in editorial changes made to specify the precise date of the resolution adopted by the Company’s Management Board.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Further to Current Reports No. 5/2020 and No. 6/2020 of January 21st 2020 and Current Report No. 8/2020 of January 31st 2020, in connection with an Extraordinary General Meeting convened for February 17th 2020 (the “EGM”), the Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached hereto, documents relevant to resolutions to be voted on by the EGM that have not yet been published:
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and
periodic information
Further to Current Report No. 5/2020 and Current Report No. 6/2020 of January
21st 2020, in connection with an Extraordinary General Meeting of Grupa Azoty
S.A. convened for February 17th 2020 (the “EGM”), the Management Board of Grupa
Azoty S.A. (the “Company”) publishes, attached to this report as a supplementary document concerning a matter included in the EGM’s agenda, a resolution of the Company’s Supervisory Board providing an opinion on a proposal of the Management Board of Grupa Azoty S.A. to the General Meeting of
Grupa Azoty S.A. to consent to the subscription of shares in the increased
share capital of Grupa Azoty Polyolefins S.A., which is intended to supplement
documents concerning item 6 of the EGM’s agenda.
The resolution will be posted on the Company’s website.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis:
Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2018, item 512, as amended) – Current and periodic information
Revision of request submitted to Grupa Azoty Extraordinary General Meeting convened for February 17th 2020
Further to Current Report No. 6/2020 of January 21st 2020, the Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached hereto, the revised text of its request submitted to the Company’s Extraordinary General Meeting convened for February 17th 2020, concerning item 8 of the agenda.
The revision involves some editorial changes, e.g. to clarify the list of subsidiaries to which intra-group long-term loans are to be advanced to finance investment projects.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Further to Current Report No. 5/2020 of January 21st 2020, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on January 24th 2020 it received a request from the shareholder State Treasury, submitted pursuant to Art. 401.1 of the Commercial Companies Code, to place the following item on the agenda of the Company’s Extraordinary General Meeting convened for February 17th 2020:
“Changes in the composition of the Supervisory Board of Grupa Azoty S.A.”
At the same time, the shareholder submitted draft resolutions to the agenda item it has proposed, attached as an appendix to this report.
Acting pursuant to Art. 401.2 of the Commercial Companies Code, the Company’s Management Board announces that the agenda of the Extraordinary General Meeting has been changed by adding item 9. At the same time, previous item 9 “Closing of the Meeting” is renumbered as item 10.
The agenda of the Company’s Extraordinary General Meeting convened for February 17th 2020 incorporating the amendment set out above shall read as follows:
Legal basis: Par. 19.1.3 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2018, item 512, as amended) – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the draft resolutions to be debated and voted on at the Company’s Extraordinary General Meeting convened for February 17th 2020.
In addition, the Management Board publishes, attached hereto, the previously unpublished documents relating to matters to be considered at the Extraordinary General Meeting.
Legal basis: Par. 19.1.2 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2018, item 512, as amended) – Current and periodic information
Acting pursuant to Art. 398, Art. 399.1 in conjunction with Art. 4021 and Art. 4022 of the Commercial Companies Code, and Art. 42.1.1) of Grupa Azoty S.A.’s Articles of Association, the Management Board of Grupa Azoty S.A. of Tarnów (the “Company”), entered in the Register of Businesses of the National Court Register by the District Court for Kraków-Śródmieście in Kraków, 12th Commercial Division of the National Court Register, under No. KRS 0000075450, Tax Identification Number (NIP): 873-000-68-29, with a share capital of PLN 495,977,420 (paid in full), hereby convenes an Extraordinary General Meeting of Grupa Azoty S.A. to be held on February 17th 2020, at 12:00 noon, at the Company’s registered office at ul. Kwiatkowskiego 17, Tarnów, Poland, in conference room 57/58, 1st floor.
The total number of Grupa Azoty shares is 99,195,484. As at February 17th 2020, the number of votes attached to these shares is 99,195,484.
AGENDA:
Right to participate in the General Meeting
Pursuant to Art. 406[1].1 of the Commercial Companies Code, the right to participate in the Meeting is vested in persons who are Company shareholders sixteen days prior to the date of the General Meeting, i.e. as at February 1st 2020 (the record date).
To be able to participate in the Extraordinary General Meeting, holders of rights under book-entry bearer shares should submit, with the entity keeping their securities account, a request to be issued a personal certificate confirming their right to participate in the Extraordinary General Meeting. The request should be submitted on or after the publication of the notice of Extraordinary General Meeting, i.e. January 21st 2019,and no later than on the first weekday following the record date, i.e. February 3rd 2020. Personal certificates confirming the right to participate in the Extraordinary General Meeting will serve as the basis for preparation of records submitted to the entity operating the securities depository in accordance with the Act on Trading in Financial Instruments.
A list of shareholders entitled to participate in the Extraordinary General Meeting will be displayed at the Company’s registered office at ul. Kwiatkowskiego 8, Tarnów, Poland, for three weekdays immediately preceding the date of the General Meeting, i.e. on February 12th, 13th and 14th 2020, from 8:00 am to 4:00 pm. A shareholder may request to be delivered the list of shareholders free of charge via electronic mail, by providing an email address to which the list should be delivered. The request may be submitted in electronic form to the following Company email address: ##lpact.ipgcdl#at#vgjeppodin.rdb##.
Right to participate in the Extraordinary General Meeting through a proxy
Shareholders may participate in the Extraordinary General Meeting of the Company and exercise their voting rights personally or through a proxy. Persons acting on behalf of legal persons should present valid excerpts from relevant registers specifying persons authorised to represent the legal persons.
A proxy may exercise all the rights of a shareholder at the Extraordinary General Meeting unless the power of proxy states otherwise. A proxy may grant further powers of proxy if permitted to do so under their power of proxy. A proxy may represent multiple shareholders and vote the shares of each shareholder differently. A shareholder whose shares are registered in more than one securities account may appoint a separate proxy to exercise the rights attached to the shares registered in each account. A shareholder whose shares are registered in an omnibus account may appoint separate proxies to exercise the rights attached to the shares registered in that account.
A power of proxy to participate in the Extraordinary General Meeting of Grupa Azoty S.A. and exercise voting rights must be in written or electronic form. As of the date of this notice, the Company will make a form of electronic power of proxy available for downloading from www.grupaazoty.com. The grant of a power of proxy in electronic form must be notified to the Company by means of electronic communication. Along with a notification of granting a power of proxy in electronic form, the shareholder must send in scanned copies of the granted power of proxy, ID cards, passports or other documents enabling identification of the shareholder as the principal and of the appointed proxy. Where the power of proxy is granted by a legal person or an organisation referred to in Art. 331 of the Civil Code, a scanned copy of the principal’s entry in the relevant register must also be submitted. Where the proxy is a legal person or an organisation referred to in Art. 331 of the Civil Code, a scanned copy of the proxy’s entry in the relevant register must also be submitted. Any documents submitted via electronic means and originally prepared in a foreign language should be accompanied by a certified translation into Polish. All the above documents should be sent in to: ##lpact.ipgcdl#at#vgjeppodin.rdb##. Together with a notification of granting a power of proxy, the shareholder sends in an email address through which the Company will be able to communicate with the shareholder and the proxy. The Company may take appropriate steps aimed at identifying the shareholder and the proxy. The identification procedure may involve contacting the shareholder and the proxy via a return electronic message or a return call to confirm that the power of proxy has actually been granted. A power of proxy in electronic form does not require a secure electronic signature verifiable by means of a valid qualified certificate.
The procedure for identification of the principal applies accordingly to a notification of revoking a power of proxy. Proxy appointment or revocation notifications which are not compliant with the requirements set out above have no legal effect with respect to the Company.
It is the shareholder who decides on the way of granting a power of proxy and the Company is not liable for any errors in filled-in forms or actions by the holders of powers of proxy. Sending in the above documents in electronic form does not release the proxy from the obligation to produce his/her identification documents when the attendance list of persons authorised to participate in the Extraordinary General Meeting of the Company is being prepared.
Shareholders’ right to request that a certain matter be placed on the agenda of the Extraordinary General Meeting
A shareholder or shareholders representing at least one-twentieth of the Company’s share capital may request that certain matters be placed on the agenda of the Extraordinary General Meeting. Any such request, together with the grounds or a draft resolution pertaining to the request, should be submitted to the Company’s Management Board no later than 21 days prior to the scheduled date of the Extraordinary General Meeting, that is by January 27th 2020. The request may be submitted in electronic form to ##lpact.ipgcdl#at#vgjeppodin.rdb##, or in writing to the following address: Zarząd Grupy Azoty S.A. (Management Board of Grupa Azoty S.A.), ul. Kwiatkowskiego 8, 33-101, Tarnów, Poland.
Shareholders’ right to propose draft resolutions
A shareholder or shareholders representing at least one-twentieth of the share capital may submit, prior to the scheduled date of the Extraordinary General Meeting, draft resolutions on matters which have been or are to be placed on the agenda. Such draft resolutions may be sent in electronic form to ##lpact.ipgcdl#at#vgjeppodin.rdb##, or in writing to the following address: Zarząd Grupy Azoty S.A. (Management Board of Grupa Azoty S.A.), ul. Kwiatkowskiego 8, 33-101, Tarnów, Poland.
During the Extraordinary General Meeting, any shareholder may submit draft resolutions on matters placed on the agenda. Such draft resolutions should be in the Polish language.
Electronic communications
The Management Board of the Company does not provide for the possibility of participating in the Extraordinary General Meeting or taking the floor by means of electronic communication. The Management Board does not permit the exercise of voting rights by postal ballot or electronic means.
Access to documents
The documents to be presented to the Extraordinary General Meeting, including draft resolutions, will be available at the Company’s registered office and on the Company’s website at http://tarnow.grupaazoty.com/pl/relacje/walne from the date of convening the Extraordinary General Meeting.
Additionally, the draft resolutions and any previously unpublished documents pertaining to matters to be dealt with, and to resolutions to be voted on, at the General Meeting will be published pursuant to the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Any comments from the Company’s Management Board or Supervisory Board concerning matters placed on the agenda of the Extraordinary General Meeting or matters to be placed on the agenda before the date of the Extraordinary General Meeting will be published on the Company’s website promptly after they are issued.
Corporate website
Information concerning the General Meeting is available in the Investor Relations/General Meeting of Shareholders section of the Company’s website www.grupaazoty.com.
INFORMATION ON PERSONAL DATA PROTECTION IN CONNECTION WITH THE CONVENING OF THE GENERAL MEETING OF GRUPA AZOTY S.A.
Pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council (GDPR), Grupa Azoty S.A. (the “Company”) wishes to advise you that in connection with the convening of the Company’s Extraordinary General Meeting (the “EGM”) the Company will process the personal data of the Company shareholders, their proxies authorised to vote and other persons authorised to exercise voting rights at the EGM (jointly referred to as the “Shareholders” or “you”).
Therefore, the Company states that:
a. the controller of the personal data collected is Grupa Azoty S.A. of Tarnów; You can contact the Company by writing to the email address ##ipgcdl#at#vgjeppodin.rdb## or postal address: Grupa Azoty Spółka Akcyjna, ul. E. Kwiatkowskiego 8, 33-101 Tarnów, Poland;
b. For matters related to the protection of personal data at the Company, you can contact the Data Protection Officer via the following email: ##xds.ipgcdl#at#vgjeppodin.rdb## or by post: Grupa Azoty Spółka Akcyjna, ul. E. Kwiatkowskiego 8, 33-101 Tarnów, Poland
c. The data will be processed for the following purposes: compliance by the Company with its legal obligations under the Commercial Companies Code, imposed on it as a public company in connection with the convening of the EGM, allowing the Shareholders to exercise their rights in relation to the Company, as well as establishment, exercise or defence of any legal claims by the Company;
d. The Company processes: (i) personal data identifying the Shareholder, such as the first name, surname, address of residence or address for correspondence and Personal Identification Number (PESEL), (ii) data included in powers of attorney/proxy, (iii) data on shares held and rights attached to them, such as the number, type and serial numbers of shares and number of voting rights conferred by such shares, and (iv) where Shareholders contact the Company via email – their email address;
e. Shareholders’ personal data may be collected by the Company from entities operating the securities depository, as well as from other Shareholders – with respect to the data included in powers of proxy;
f. The legal basis for the processing of your personal data by the Company is:
g. Recipients of the personal data include entities providing hosting services for IT tools used for the purpose of contacting Shareholders, entities providing document archiving services, and other Shareholders – with respect to making the list of shareholders available for inspection in accordance with Art. 407 of the Commercial Companies Code;
h. Personal data included in the lists of shareholders, attendance lists and powers of attorney/proxy is stored for the period of the Company’s existence, and may afterwards be transferred to an entity designated to store documents in accordance with the Commercial Companies Code; personal data related to email contact is stored for a period allowing the Company to demonstrate its compliance with obligations imposed by the Commercial Companies Code and for a period of prescription of any potential claims pursued by the Company or against the Company;
i. Where data is provided directly to the Company, provision of data is required by the Commercial Companies Code and in order to enable verification of the Shareholder’s identity, and failure to do so results in the Shareholder’s inability to participate in the EGM; provision of the email address is voluntary but required to enable email contact between the Company and the Shareholder, with failure to provide it precluding such email contact;
j. you have the right to request access to your personal data and to demand its rectification, erasure or restriction of its processing, right to object to processing of the data, as well as the right to data portability; You should bear in mind that these rights are not absolute and there are certain exceptions as to when they may be exercised provided for in the applicable laws and regulations;
k. You may lodge a complaint with the President of the Data Protection Authority in the event of any irregularities in the processing of your personal data.
Legal basis: Par. 19.1.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on January 21st 2020 it was notified of a decision issued by the Polish Office of Competition and Consumer Protection (UOKiK) clearing the proposed concentration whereby the Company, Hyundai Engineering Co., Ltd., Korea Overseas Infrastructure & Urban Development Corporation and Grupa LOTOS S.A. would establish a joint venture operating under the name of Grupa Azoty Polyolefins S.A. This satisfies one of the conditions precedent under the initial term-sheets, as announced by the Company in Current Report No. 77/2019 of December 13th 2019 and Current Report No. 80/2019 of December 23rd 2019.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Grupa Azoty S.A. (the “Company”) will announce its 2019 full year results and 2020 interim results as per the following schedule:
1.
First and third quarter interim results:
- Q1 2020 complete
consolidated report – May 21st 2020,
- Q3 2020 complete
consolidated report – November 19th 2020.
2.
Half-year interim results:
- H1 2020 complete consolidated report
– September 10th 2020.
3.
Full-year results:
- 2019 separate full year report – April 1st
2020,
- 2019 consolidated full-year report – April 1st 2020.
The 2019 consolidated report on payments to governments will be released on April 1st 2020.
Furthermore, the Company announces that no separate quarterly results will be published by the Company, as permitted under Par. 62.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757) (the “Regulation”). The consolidated quarterly reports will incorporate separate (non-consolidated) quarterly condensed consolidated financial statements and quarterly financial information.
Also, the Company will not publish a separate (non-consolidated) half year report, as permitted under Par. 62.3 of the Regulation.
Further, the Company will not publish separate or consolidated quarterly results for Q4 2019 and Q2 2020, as permitted under Par. 79.2 of the Regulation.
Legal basis: Par. 80.1 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. announces that Current Report No. 2/2020 of January 13th 2020 contained a manifest error in the subsidiary’s name.
Previous wording:
The Management Board of Grupa Azoty S.A. (the “Company”) announces that it has been notified that on January 10th 2020 the District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register, registered an increase in the share capital of Grupa Azoty Police S.A., a subsidiary of the Company (the “Subsidiary”) from PLN 750,000,000 to PLN 1,241,757,680, effected through the issue of 49,175,768 Series C ordinary bearer shares in the Subsidiary, with a par value of PLN 10.00 per share, issued pursuant to Resolution No. 4 of the Extraordinary General Meeting of the Subsidiary on increasing the Subsidiary’s share capital through a rights issue, public offering of the new shares, setting November 7th 2019 as the pre-emptive rights record date in respect of the new shares, conversion of the shares into book-entry form and seeking admission of pre-emptive rights, allotment certificates and the new shares to trading on the regulated market operated by the Warsaw Stock Exchange.
Corrected wording:
The Management Board of Grupa Azoty S.A. (the “Company”) announces that it has been notified that on January 10th 2020 the District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register, registered an increase in the share capital of Grupa Azoty Zakłady Chemiczne Police S.A., a subsidiary of the Company (the “Subsidiary”) from PLN 750,000,000 to PLN 1,241,757,680, effected through the issue of 49,175,768 Series C ordinary bearer shares in the Subsidiary, with a par value of PLN 10.00 per share, issued pursuant to Resolution No. 4 of the Extraordinary General Meeting of the Subsidiary on increasing the Subsidiary’s share capital through a rights issue, public offering of the new shares, setting November 7th 2019 as the pre-emptive rights record date in respect of the new shares, conversion of the shares into book-entry form and seeking admission of pre-emptive rights, allotment certificates and the new shares to trading on the regulated market operated by the Warsaw Stock Exchange.
Following the correction, Current Report No. 2/2020 reads as follows:
The Management Board of Grupa Azoty S.A. (the “Company”) announces that it has been notified that on January 10th 2020 the District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register, registered an increase in the share capital of Grupa Azoty Zakłady Chemiczne Police S.A., a subsidiary of the Company (the “Subsidiary”) from PLN 750,000,000 to PLN 1,241,757,680, effected through the issue of 49,175,768 Series C ordinary bearer shares in the Subsidiary, with a par value of PLN 10.00 per share, issued pursuant to Resolution No. 4 of the Extraordinary General Meeting of the Subsidiary on increasing the Subsidiary’s share capital through a rights issue, public offering of the new shares, setting November 7th 2019 as the pre-emptive rights record date in respect of the new shares, conversion of the shares into book-entry form and seeking admission of pre-emptive rights, allotment certificates and the new shares to trading on the regulated market operated by the Warsaw Stock Exchange.
As at the date of this Current Report, the Subsidiary’s share capital after the registration of the share capital increase amounts to PLN 1,241,757,680 and is divided into 124,175,768 shares with a par value of PLN 10.00 per share, including:
1. 60,000,000 Series A shares;
2. 15,000,000 Series B shares; and
3. 49,175,768 Series C shares.
The total number of votes attached to all issued shares in the Subsidiary is 124,175,768 (one hundred and twenty-four million, one hundred and seventy-five thousand, seven hundred and sixty-eight).
Following the registration of the increase in the Subsidiary’s share capital, the number of shares and voting rights held by the Company in the Subsidiary is 78,051,500, representing 62.86% of the Subsidiary’s share capital and total voting rights.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that it has been notified that on January 10th 2020 the District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register, registered an increase in the share capital of Grupa Azoty Police S.A., a subsidiary of the Company (the “Subsidiary”) from PLN 750,000,000 to PLN 1,241,757,680, effected through the issue of 49,175,768 Series C ordinary bearer shares in the Subsidiary, with a par value of PLN 10.00 per share, issued pursuant to Resolution No. 4 of the Extraordinary General Meeting of the Subsidiary on increasing the Subsidiary’s share capital through a rights issue, public offering of new shares, setting November 7th 2019 as the pre-emptive rights record date in respect of new shares, conversion into book-entry form and seeking admission of pre-emptive rights, allotment certificates and new shares to trading on the regulated market operated by the Warsaw Stock Exchange.
As at the date of this Current Report, the Subsidiary’s share capital after the registration of the share capital increase amounts to PLN 1,241,757,680 and is divided into 124,175,768 shares with a par value of PLN 10.00 per share, including:
1. 60,000,000 Series A shares,
2. 15,000,000 Series B shares, and
3. 49,175,768 Series C shares.
The total number of votes attached to all issued shares in the Subsidiary is 124,175,768 (one hundred and twenty-four million, one hundred and seventy-five thousand, seven hundred and sixty-eight).
Following the registration of the increase in the Subsidiary’s share capital, the number of shares and voting rights held by the Company in the Subsidiary is 78,051,500, representing 62.86% of the Subsidiary’s share capital and total voting rights.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended) (MAR).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (“Company”) announces that on January 2nd 2020 the Polish Financial Supervision Authority approved Annex No. 5 to the prospectus of the Company’s subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (“Issuer”) (“Annex No. 5”), prepared for the purposes of a public offering of 110,000,000 Series C ordinary bearer shares with a par value of PLN 10.00 per share, as well as the seeking of admission and introduction of 75,000,000 individual pre-emptive rights to Series C shares and up to 110,000,000 Series C ordinary bearer shares to trading on the regulated (main) market operated by the Warsaw Stock Exchange (the “Prospectus”).
Annex No. 5 was prepared in connection with the imposition by the Polish Financial Supervision Authority of fines on the Issuer, totalling PLN 1m, for breach of the disclosure requirements with respect to the consolidated report for 2014, annual report for 2014, consolidated annual report for 2015, annual report for 2015 and consolidated quarterly report for Q3 2016.
The Annex was published on January 2nd 2020 in electronic form on the Company’s website at (http://zchpolice.grupaazoty.com/)and, for information purposes only, on the website of the Global Coordinator – Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna, Brokerage Branch in Warsaw, at (https://www.bm.pkobp.pl/).
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended) (MAR).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 30th 2019 the Polish Financial Supervision Authority approved Annex No. 4 (“Annex No. 4”) to the prospectus of Grupa Azoty Zakłady Chemiczne Police S.A., a subsidiary of the Company (the “Subsidiary”), prepared for the purposes of a public offering of 110,000,000 Series C ordinary bearer shares, with a par value of PLN 10.00 per share, as well as the seeking of admission and introduction of 75,000,000 individual pre-emptive rights to Series C shares and up to 110,000,000 Series C ordinary bearer shares to trading on the regulated (main) market operated by the Warsaw Stock Exchange (the “Prospectus”).
Annex No. 4 was prepared in connection with the execution on December 23rd 2019 of an amended term sheet setting out the terms of equity financing of the Polimery Police Project between the Subsidiary, the Company and Grupa Azoty Polyolefins S.A. on the one side and Hyundai Engineering Co., Ltd and Korea Overseas Infrastructure & Urban Development Corporation on the other side, and the issuance by Grupa Azoty Polyolefins S.A. of the Full Notice to Proceed under the EPC contract for the Polimery Police Project.
The Annex was published on December 30th 2019 in electronic form on the Company’s website at http://zchpolice.grupaazoty.com/, and, for information purposes only, on the website of the Global Coordinator – Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna, Brokerage Branch in Warsaw, at https://www.bm.pkobp.pl/.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended) (MAR).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Parent”) announces successful conclusion of the issue of 49,175,768 Series C ordinary bearer shares with a par value of PLN 10.00 per share (“New Shares”), carried out by its subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (the “Company”) pursuant to Resolution No. 4 of the Company’s Extraordinary General Meeting of September 23rd 2019 on increasing the Company’s share capital by way of an issue of new shares with pre-emptive rights, conducting a public offering of new shares, setting November 7th 2019 as the record date for pre-emptive rights in respect of the new shares, converting into book-entry form and seeking the admission and introduction of the pre-emptive rights, allotment certificates and new shares to trading on the regulated market operated by the Warsaw Stock Exchange, and amending the Company’s Articles of Association (i) by way of a public offering based on the Company’s prospectus approved by the Polish Financial Supervision Authority on November 5th 2019 (the “Prospectus Based Offering”) and (ii) by way of an offering which did not require the preparation of a prospectus in accordance with Article 1(4) of Regulation (EU) 2017/1129 of the European Parliament and of the Council of June 14th 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC.
On December 23rd 2019, the Company’s Management Board passed a resolution to allot 49,175,768 New Shares which had been duly subscribed and paid for, of which:
49,175,768 (forty-nine million, one hundred and seventy-five thousand, seven hundred and sixty-eight) New Shares were allotted to entities that placed subscription orders for New Shares in the exercise of their pre-emptive rights and to entities that placed additional subscription orders.
At the same time, the Parent’s Management Board announces that no New Shares were subscribed for in the offering of New Shares for which no primary or additional subscription orders had been placed in the public offering.
The total number of New Shares subscribed for is 49,175,768, of which the Parent subscribed for 28,551,500 New Shares.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Reports No. 25/2019 of May 10th 2019 and No. 49/2019 of September 19th 2019, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 23rd 2019 the Company, the Company’s subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (the “Subsidiary”; jointly with the Company: the “Original Sponsors”) and a subsidiary of the Original Sponsors – Grupa Azoty Polyolefins S.A. (“Polyolefins”) signed an amended term sheet (the “Term Sheet”) with Hyundai Engineering Co., Ltd (“Hyundai”) and Korea Overseas Infrastructure & Urban Development Corporation (“KIND”; jointly with Hyundai: the “Joint Sponsors” and jointly with the Original Sponsors and Polyolefins: the “Parties”), setting out the terms of an equity investment in and financing of the Polimery Police project (the “Project”) being implemented by Polyolefins.
The Term Sheet has not changed the amount of the Original Sponsors’ commitment or the Joint Sponsors’ joint commitment to the Project of USD 130,000,000. However, the Parties have modified the forms of Project financing as follows:
The Parties also amended the list of conditions precedent to the Joint Sponsors’ investment by adding new conditions, namely: (i) obtaining the relevant antitrust clearance from the relevant competition authority; and (ii) fulfilling other conditions precedent to be specified in the final equity financing documents.
The Term Sheet has not introduced any changes with respect to special rights to be vested in the Joint Sponsors or the duration of the lock-up period.
With respect to the exit procedure for the Joint Sponsors, the Parties have maintained the existing financial terms and scope of the put option for a part of their equity contribution to Polyolefins of USD 70,000,000 and, in addition, provided for an exit mechanism in respect of the balance of the Joint Sponsors’ equity contribution, which is to consist in re-acquisition of the shares by Polyolefins for cancellation.
The Term Sheet constitutes a binding obligation of the Parties provided that: (i) the wording of the equity financing documents (i.e. investment agreement, shareholders’ agreement, and any other documents required in connection with equity financing of Polyolefins) is agreed upon to the satisfaction of the Joint Sponsors, (ii) the wording of the KIND loan agreement is agreed upon to the satisfaction of KIND, and (iii) the conditions precedent set out in the Term Sheet are satisfied.
The Term Sheet was concluded for a definite term, expiring on June 30th 2020, with an option to extend it or to terminate it on an earlier date, subject to the Parties’ mutual consent. The Term Sheet will also expire if the Parties execute the final transaction documents (i.e. equity financing documents and KIND loan agreement), which will supersede the Term Sheet.
The amendments made in the Term Sheet result from the execution of an initial term sheet concerning an equity investment in and financing of the Project with Grupa LOTOS S.A., as announced by the Company in Current Report No. 77/2019 of December 13th 2019, and the need to align the terms of the Joint Sponsors’ investment in the Project with the terms agreed upon with Grupa LOTOS.
Information on the milestones of the Project’s equity financing will be announced by the Company in separate current reports.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 28/2019 of May 11th 2019, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 23rd 2019 the subsidiary of the Company and Grupa Azoty Zakłady Chemiczne Police S.A. – Grupa Azoty Polyolefins S.A. (“Polyolefins”), acting pursuant to a resolution of the Polyolefins General Meeting of December 23rd 2019, issued to Hyundai Engineering Co., Ltd (the “Contractor”), being the contractor under the turnkey engineering, procurement and construction contract for the Polimery Police Project dated May 11th 2019 (the “EPC Contract”), a Full Notice to Proceed. The issuance of the Full Notice to Proceed triggers the Contractor’s obligation to proceed to the execution of the full scope of the EPC Contract, in exchange for payment by Polyolefins of the full price specified in the EPC Contract, as announced in Current Report No. 28/2019. The price due to the Contractor will be payable against milestones specified in the EPC Contract, following acceptance of a given milestone by signing a relevant acceptance report.
The EPC Contract provides for turnkey execution of the Polimery Police Project, i.e. a new petrochemical complex in Police, comprising five sub-projects: (i) a propane dehydrogenation unit (PDH Unit), (ii) a polypropylene unit (PP Unit), (iii) a polypropylene packaging, storage, logistics and forwarding system, (iv) auxiliary systems and inter-unit connections, and (v) a storage and handling terminal comprising port facilities to unload and store propane and ethylene from sea vessels. The target capacity of the PDH Unit is 400,000 tonnes of propylene with a purity of 99.6% by volume (polymer grade) per 8,000 hours, and that of the PP Unit – 400,000 tonnes of polypropylene (various grades) per 8,000 hours.
Under the EPC Contract, an optional scope of work was also assigned by Polyolefins to the Contractor subject to the terms and conditions and in exchange for a price strictly defined in the EPC Contract. The optional scope of work comprises three additional options: (i) to construct a nitrogen plant for the PDH Unit and PP Unit, (ii) to equip a laboratory for the Polimery Police Project, and (iii) to deliver equipment for the production and plant maintenance staff. The total price due for the optional scope of work is EUR 19,880.000.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 19(3) of MAR – Notification of transactions executed by persons discharging managerial responsibilities.
The Management Board of Grupa Azoty Zakłady Chemiczne Police S.A. (“Company”) announces that on December 24th 2019 the Company received from Grupa Azoty S.A. – a person closely associated with the President of the Company’s Management Board Wojciech Wardacki – a notification (“Notification”) of transactions referred to in Article 19(1) of the Market Abuse Regulation (“MAR”).
The text of the Notification is attached as an appendix hereto.
Legal basis: Article 19(3) of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended) (MAR).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Reports No. 24/2019 of April 26th 2019, No. 58/2019 of October 31st 2019, No. 73/2019 of November 22nd 2019 and No. 74/2019 of December 6th 2019, the Management Board of Grupa Azoty S.A. (the „Company”) announces that on [December 13th] 2019 the Company and the Company's subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (the “Subsidiary”; jointly with the Company: the “Original Sponsors”) and the Company and Grupa Azoty Zakłady Chemiczne Police S.A.’s subsidiary Grupa Azoty Polyolefins S.A. (“Polyolefins”) signed an initial term-sheet (the “Term Sheet”) with Grupa Lotos S.A. (the “Joint Sponsor”; jointly with the Original Sponsors and Polyolefins: the “Parties”), setting out the the terms of equity investment and financing for the Polimery Police project (the “Project”) being implemented by Polyolefins.
Under the Terms Sheet:
The Joint Sponsor's Investment is subject to a number of conditions precedent agreed in the Term Sheet, including but not limited to:
The Parties agreed, among other things, that the Joint Sponsor, as a shareholder in Polyolefins, would have personal rights comprising: (a) the right to appoint one member of the Polyolefins Supervisory Board, and (b) the right to convene the Polyolefins General Meeting.
The Parties further agreed that the final equity financing documents will provide for a lock-up period . The Parties also agreed on the procedure for the sale of Polyolefins shares by the Joint Sponsor after the lock-up period expires.
The Term Sheet constitutes a binding obligation of the Parties, subject to: (i) fulfilment of the conditions precedent set out in the Term Sheet, and (ii) agreement on and execution of equity financing documents (i.e. investment agreement, shareholders' agreement, and any other documents required in connection with equity financing of Polyolefins).
The Term Sheet was signed for a definite term, until December 31st 2020, with the option of its extension or early termination based on an agreement between the Parties or if it is unilaterally terminated by the Joint Sponsor as a result of a material adverse change which affects, directly or indirectly, the Project, Polyolefins or the Original Sponsors and, in any event, prevents implementation of the Project on the terms presented to the Joint Sponsor by the date of execution of the Term Sheet.
Information on the milestones of the Project’s equity financing will be announced by the Company in separate current reports.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Reports No. 31/2019 of May 29th 2019, No. 36/2019 of June 12th 2019, No. 40/2019 of June 27th 2019, No. 47/2019 of August 26th 2019, No. 51/2019 of October 10th 2019, No. 64/2019 of November 8th 2019 and No. 65/2019 of November 13th 2019, the Management Board of Grupa Azoty S.A. (the “Company”) announces that in connection with a secondary issue of shares (the “Proposed Share Issue”) in the Company’s subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”), and in order to implement the resolutions passed by the Company’s Management Board on October 10th 2019, by the Company’s Extraordinary General Meeting on November 8th 2019 and by the Company’s Supervisory Board on November 13th 2019, on December 9th 2019 the Company instructed an investment firm to subscribe on its behalf for 28,551,500 shares of the Proposed Share Issue, at an issue price of PLN 10.20 per share, that is for an aggregate price of PLN 291,225,300.00 (two hundred and ninety-one million, two hundred and twenty-five thousand, three hundred złoty 00/100), in the exercise of pre-emptive rights held by the Company.
As per the current timetable of the GA Police Proposed Share Issue, the shares will be allotted by December 20th 2019.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 9th 2019 the Polish Financial Supervision Authority approved Annex No. 2 (“Annex No. 2”) to the prospectus of Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”), a subsidiary of the Company, prepared for the purposes of a public offering of 110,000,000 Series C ordinary bearer shares, with a par value of PLN 10.00 per share, as well as the seeking of admission and introduction of 75,000,000 pre-emptive rights to Series C shares and up to 110,000,000 Series C ordinary bearer shares to trading on the regulated (main) market operated by the Warsaw Stock Exchange (the “Prospectus”).
Annex No. 2 was prepared in connection with the conclusion of an investment agreement between the Company and the State Treasury on December 5th 2019.
The Annex was published on December 9th 2019 in electronic form on the Company’s website at http://zchpolice.grupaazoty.com/, and, for information purposes only, on the website of the Global Coordinator – Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna, Brokerage Branch in Warsaw, at https://www.bm.pkobp.pl/.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended) (MAR).
Legal basis: Art. 17(1) of MAR – Inside information
Further to Current Reports No. 24/2019 of April 26th 2019, No. 58/2019 of October 31st 2019, and No. 73/2019 of November 22nd 2019, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on December 6th 2019 the Company, the Company’s subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. and the Company’s and Grupa Azoty Zakłady Chemiczne Police S.A.’s subsidiary Grupa Azoty Polyolefins S.A. (formerly PDH Polska S.A.) (“GA Polyolefins”) signed another annex to a letter of intent on financing the Polimery Police project with Grupa LOTOS S.A. (“Grupa LOTOS”) (the “Letter of Intent”).
Under the annex, the term of the Letter of Intent has been extended until December 13th 2019, which provides the basis for further negotiation of Grupa LOTOS’s potential participation in the financing of GA Polyolefins’s proposed Polimery Police project through acquisition by Grupa LOTOS of new shares in the share capital of GA Polyolefins and contribution of up to PLN 500m to GA Polyolefins’s share capital.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Further to Current Report No. 24/2019 of April 26th 2019 and Current Report No. 58/2019 of October 31st 2019, the Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 22nd 2019 the Company, the Company’s subsidiary Grupa Azoty Zakłady Chemiczne Police S.A., and the Company’s and Grupa Azoty Zakłady Chemiczne Police S.A.’s subsidiary Grupa Azoty Polyolefins S.A. (formerly PDH Polska S.A.) (“GA Polyolefins”) signed a new annex to a letter of intent on financing the Polimery Police project with Grupa LOTOS S.A. (“Grupa LOTOS”) (the “Letter of Intent”).
Under the annex, the term of the Letter of Intent has been extended until December 6th 2019, which provides the basis for further negotiation of Grupa LOTOS’s potential participation in the financing of GA Polyolefins’s proposed Polimery Police project through acquisition by Grupa LOTOS of new shares in the share capital of GA Polyolefins and contribution of up to PLN 500m to GA Polyolefins’s share capital.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Acting pursuant to Art. 428.5 of the Commercial Companies Code, the Management Board of Grupa Azoty S.A. (the “Company”) presents its answers to the questions asked by a shareholder under Art. 428.1 of the Commercial Companies Code at the Extraordinary General Meeting held on November 8th 2019.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
Acting pursuant to Art. 428.5 of the Commercial Companies Code, the Management Board of Grupa Azoty S.A (the “Company”) presents its answers to the questions asked by a shareholder under Art. 428.1 of the Commercial Companies Code at the Extraordinary General Meeting held on November 8th 2019.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 70.3 of the Public Offering Act – List of shareholders holding over 5% of total voting rights at the General Meeting
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, a list of shareholders holding 5% or more of total voting rights at the Extraordinary General Meeting convened for November 8th 2019 and resumed after an adjournment on November 21st 2019, specifying the number of votes conferred by the shares held by each shareholder, and their percentage share in the voting rights represented at that Extraordinary General Meeting and in the total voting rights.
Legal basis: Art. 70.3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz.U. of 2019, item 623).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the text of the resolution passed at the Company’s Extraordinary General Meeting convened for November 8th 2019 and resumed after an adjournment on November 21st 2019.
During the Extraordinary General Meeting, an objection regarding Resolution No. 7 was raised and recorded in the minutes.
Legal basis: Par. 19.1.6 and Par. 19.1.9 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 20th 2019 the Polish Financial Supervision Authority approved Annex No. 1 (“Annex No. 1”) to the prospectus of Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”), a subsidiary of the Company, prepared for the purposes of a public offering of 110,000,000 Series C ordinary bearer shares, with a par value of PLN 10.00 per share, as well as the seeking of admission and introduction of 75,000,000 pre-emptive rights to Series C shares and up to 110,000,000 Series C ordinary bearer shares to trading on the regulated (main) market operated by the Warsaw Stock Exchange (the “Prospectus”).
Annex No. 1 was prepared in connection with the publication of GA Police’s results for Q3 2019, submission of a proposal to the President of the Polish Council of Ministers for subscription for the Offer Shares, and the General Meeting of Grupa Azoty S.A. held on November 8th 2019.
The Annex was published on November 20th 2019 in electronic form on GA Police’s website at http://zchpolice.grupaazoty.com/, and, for information purposes only, on the website of the Global Coordinator – Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna, Brokerage Branch in Warsaw, at https://www.bm.pkobp.pl/.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended) (MAR).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005
The Management Board of Grupa Azoty S.A. (the “Company”) announces that in connection with the Goat TopCo GmbH Group (“COMPO EXPERT”) integration process, the Company has received questions from a shareholder concerning:
The Company’s answers are provided in the attachment to this report.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005
The Management Board of Grupa Azoty S.A. (the “Company”) announces that in connection with:
on November 12th 2019 the Company received a question from its shareholder concerning actions planned by the Company’s Management Board to give effect to the aforementioned resolution of the Extraordinary General Meeting.
Below are the Company’s answers:
The Company’s Management Board intends to give effect to Resolution No. 5 of the Extraordinary General Meeting dated November 8th 2019 granting consent to the subscription for shares in the increased share capital of Grupa Azoty Zakłady Chemiczne Police S.A., i.e. to participate in the offering on the terms provided for in the issue prospectus of Grupa Azoty Zakłady Chemiczne Police S.A., as approved by the Polish Financial Supervision Authority on November 5th 2019, and in accordance with the offering timetable published by that company’s management board in Current Report No. 62/2019 of November 7th 2019.
The Company’s Management Board further states that on November 13th 2019the Company’s Supervisory Board gave its approval for the Management Board to execute transactions involving the acquisition of secondary issue shares in the subsidiary and sale of pre-emptive rights to secondary issue shares in that subsidiary. The Supervisory Board’s resolution to approve these transactions has made it possible to give effect to Resolution No. 5 of the Company’s Extraordinary General Meeting dated November 8th 2019.
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 31/2019 of May 29th 2019, Current Report No. 36/2019 of June 12th 2019, Current Report No. 40/2019 of June 27th 2019, Current Report No. 47/2019 of August 26th 2019, Current Report No. 51/2019 of October 10th 2019 and Current Report No. 64/2019 of November 8th 2019, the Management Board of Grupa Azoty S.A. (the “Company”) announces that – in connection with the launch of a secondary issue of shares (the “Planned Issue”) in Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”), a subsidiary of the Company’s, carried out to raise financing for the strategic “Polimery Police” project, and in connection with Resolution No. 5 of the Company’s Extraordinary General Meeting dated November 8th 2019 to consent to the acquisition of shares in the increased share capital of GA Police – on November 13th 2019, the Company’s Supervisory Board gave its approval for the Management Board to execute transactions involving the acquisition of Planned Issue shares in GA Police with a value exceeding PLN 6,000,000.00 and the sale of pre-emptive rights to secondary issue shares in GA Police with a value exceeding PLN 6,000,000.00, with a view to enabling the Company to participate in the Planned Issue. The Supervisory Board’s resolution to approve these transactions makes it possible to give effect to said Resolution No. 5 of the Company’s Extraordinary General Meeting dated November 8th 2019.
The resolution came into force as of its date.
Legal basis: Article 17(1) of Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) publishes, attached to this report, the resolutions passed to date by the Company’s Extraordinary General Meeting on November 8th 2019, together with the results of voting on the resolutions.
The documents being the subject of the resolutions voted on at the Extraordinary General Meeting have been published on the Company’s website at http://tarnow.grupaazoty.com/pl/relacje/walne.html
During the Extraordinary General Meeting, objections were submitted to be recorded in the minutes against Resolution No 5 to grant consent to subscription for shares in the increased share capital of Grupa Azoty Zakłady Chemiczne Police S.A.
Legal basis: Par. 19.1.6 and Par. 19.1.9 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the "Company") publishes, attached to this report, a draft resolution submitted by an entitled individual shareholder during the Extraordinary General Meeting held on November 8th 2019.
The resolution whose wording in provided in the attachment to this report was not passed by the Annual General Meeting.
Legal basis: Par. 19.1.4 and Par. 19.1.8 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Public Offering Act – Current and periodic information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that the Extraordinary General Meeting convened for November 8th 2019 resolved to adjourn its proceedings.
The Extraordinary General Meeting will be resumed at 11.00 a.m. on November 21st 2019 at the Company’s registered office, at ul. Kwiatkowskiego 8 in Tarnów.
Legal basis: Par. 19.1.5 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Art. 56.1.2 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005
The Management Board of Grupa Azoty S.A. (the “Company”) announces that in connection with:
on October 23rd 2019 the Company received questions from a shareholder who requested that the Company presents its position on certain aspects of the capital increase at GA Police (the public offering of new shares). The questions concerned the following matters:
The Company’s answers are presented below:
1. The effect of the proposed acquisition of GA Police shares on the Company’s economic and financial standing, including its debt and liquidity position and operating indicators
The acquisition of GA Police shares by the Company is one of the possible ways for the Group to contribute capital to the Polimery Police project, therefore it should be considered in the context of GA Police’s issue objective. Polimery Police is expected to have great impact on the economic and financial standing of the Company, GA Police and the Grupa Azoty Group as a whole (the “Group”).
It is important to note that the Group has a corporate financing system in place, and the right approach to financial metrics, debt ratios in particular, is to look at them from the Group’s perspective rather than from the perspective of the Company, i.e. the Group’s parent. Since the majority of the Group’s operations are conducted by the Company’s subsidiaries, a full economic analysis should be based on consolidated financial data. The effect of acquiring GA Police shares on the separate and consolidated results is presented below.
The Company’s standalone financial and economic position in the base- case scenario of a long-term forecast until 2026 is presented below:
The Grupa Azoty Group’s consolidated economic and financial position in the base-case scenario of the long-term financial model is presented below:
2. Findings the economic feasibility study for the Polimery Police project, referred to in the explanatory statement to a draft resolution for the Extraordinary General Meeting convened for November 8th 2019, including the cost of capital and the rate of return for the Company as a shareholder of GA Police.
The Polimery Police project was evaluated based on profitability indicators customarily used to measure rate of return that were specifically calculated for the project. These are:
The starting point for the feasibility study was a financial model developed and updated by Grupa Azoty Polyolefins S.A. (“GA Polyolefins”, formerly PDH Polska S.A.), the special purpose vehicle established to implement the Project, with the support of an independent financial adviser. The financial projections provided by the model were used in the negotiations of borrowing terms with the banks, to conduct a private investor test, and to develop the Project’s business plan.
The model’s underlying assumptions, including the macroeconomic assumptions, were independently reviewed by the Company. No material deviations of the key financial metrics from the Company’s strategic plans were identified, except for the EUR/PLN and USD/PLN exchange rates used in the model. The financial model assumes higher estimated exchange rates during the period when the capital expenditure is to be incurred. In its analyses, the Company assumed exchange rates corresponding to the rates used in the Group’s long-term plans, which are slightly lower in the initial spending period than the rates applied in the model. This deviation results in a lower estimated amount of PLN-denominated capital expenditure and thus in the Project’s higher profitability as seen from the Company’s perspective.
The findings of these economic analyses confirm the Project’s feasibility; in particular, the Project’s net present value (NPV) is positive, and the internal rate of return (IRR) is higher than the required rate of return (cost of capital), which indicates that the Polimery Police project is profitable for the Company and the Group.
The Project’s profitability was also compared with the expected market rates of return on investments in polypropylene manufacturers. It was determined that the Project offers a rate of return above the market range of expected returns on alternative investments. The same analysis also covered two scenarios of investment in GA Police shares: one assuming that the company would invest in the Police Polymers project, and the other assuming that the project would not be executed. The peer group included companies operating in the fertilizers, pigment and polypropylene segments of the chemicals market.
Results of the analysis demonstrated that the return on investment in GA Police would fall within the market range of the expected returns offered by investments in the peer companies, which confirms that the investment is justified.
3. Results of analysis of the efficiency of attaining Grupa Azoty’s strategic objectives of revenue diversification and profitability improvement through the acquisition of shares in GA Police.
The investment in the Polimery Police project will have a significant effect on the diversification of the Grupa Azoty Group’s revenue structure and margins. Once the Project is completed, the share of the Plastics segment in the Group’s total revenue will increase from 16% in 2018 to 32% in 2024 (based on the Group’s consolidated revenue in 2018 plus estimated revenue from the Project following its commercialisation).
It should be stressed that the Project would be a key step in the delivery of the Group’s long-term strategy of diversifying the revenue stream to reduce the Group’s dependence on sales of mineral fertilizers, and thus to mitigate the Group’s operating and financial risks. If the Project is not pursued, no significant change in the Group’s revenue structure would be possible in the coming years.
4. Identified risks involved in the proposed acquisition of shares in GA Police and related risk mitigation measures.
Risk analysis is material to making an investment decision concerning the exercise of pre-emptive rights and acquisition of shares. The Group’s operations, financial condition and results have been and may be subject to adverse changes as a result of risk materialisation, and the market price of GA Police shares may decline. The Company assessed the risks based on the likelihood of their materialisation and the potential extent of their adverse effect. The assessment took into account both the participation in GA Police’s public offering and the issue objective, which is the execution of the Polimery Police project.
The acquisition of GA Police shares exposes an investor to risks that can be grouped as follows:
For a detailed analysis of the risks identified in each of the above areas, see section Risk factors in pages 13–26 of GA Police’s prospectus published on November 5th 2019. The risk areas which the Company considers of key importance to its business, and the planned mitigation measures are presented below. First were addressed the risks discussed in GA Police’s prospectus, followed by Project-specific factors perceived as key risks by the Company. Capitalised terms shall have the respective meanings assigned to them in the prospectus.
Re 1. Risks relating to GA Police’s business, including execution of the Polimery Police project
Re 2. Risks relating to the financial condition of GA Police
Re 3. Risks relating to legal regulations
Re 4. Risks relating to the public offering and admission of shares to trading.
In addition to the above risk factors identified by GA Police during the prospectus preparation process, the Company has identified other risks that the parent Grupa Azoty considers material in the context of GA Police’s issue objective, which is the execution of the strategic Polimery Police project. These risks, along with mitigation measures taken or planned, are set out below.
1. Risks associated with the technical aspects of the Project during the construction phase (potential Project delays or failure to meet the production targets):
2. Risks associated with the market aspects of the Project during commercial operation (inability to place the unit’s entire output on the market or inability to achieve target selling prices and profit margins):
3. Risks associated with raising the required financing for the Project (failure to obtain the required funding, breach of the borrowing terms during the construction or repayment period, and hedging against the currency risk associated with the Project):
4. Risks associated with laws and regulations governing participation in the public offering of GA Police (particularly the risk of control dilution resulting in the loss of control of GA Police by the Company or the risk of the Company exceeding the current 66% ownership threshold that would trigger the obligation to announce a tender offer for the remaining shares in GA Police):
5. Supervisory Board’s position on granting consent to acquire shares in the increased capital of GA Police.
The Company’s Supervisory Board issued a positive opinion on the proposal of the Company’s Management Board, to be submitted to the Extraordinary General Meeting, to give consent to the acquisition of shares in the increased capital of GA Police by the Company (see Current Report No. 55/2019 of October 24th 2019).
Legal basis: Par. 19.1.12 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated March 29th 2018 (Dz.U. of 2018, item 757).
Legal basis: Article 17(1) of MAR – Inside information
The Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 5th 2019 the Polish Financial Supervision Authority approved the prospectus of Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”), a subsidiary of the Company, prepared for the purposes of a public offering of 110,000,000 Series C ordinary bearer shares in GA Police, with a par value of PLN 10.00 per share, as well as the seeking of admission and introduction of 75,000,000 pre-emptive rights to Series C shares and up to 110,000,000 Series C ordinary bearer shares to trading on the regulated (main) market operated by the Warsaw Stock Exchange.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).
Legal basis: Article 17(1) of MAR – Inside information
Further to Current Report No. 58/2019 issued by the subsidiary Grupa Azoty Zakłady Chemiczne Police S.A. (“GA Police”), the Management Board of Grupa Azoty S.A. (the “Company”) announces that on November 4th 2019, in connetion with the authorisation given in the resolution of the GA Police Extraordinary General Meeting of September 23rd 2019 concerning an increase in GA Police’s share capital by way of an issue of new shares with pre-emptive rights, public offering of the new shares, setting the record date for pre-emptive rights in respect of the new shares for November 7th 2019, conversion into book-entry form and seeking of admission and introduction of the pre-emptive rights, allotment certificates and new shares to trading on the regulated market operated by the Warsaw Stock Exchange, and amendments to the company’s Articles of Association (the “EGM Resolution”), the Management Board of GA Police passed a resolution pursuant to which:
The Company further announces that the Management Board of Grupa Azoty Police decided not to exercise the authorisation granted under Art. 432.4 of the Commercial Companies Code and GA Police’s EGM Resolution to determine the final amount by which the share capital of GA Police is to be increased. Therefore, the final number of New Shares is equal to the maximum number of New Shares set forth in GA Police’s EGM Resolution, i.e. 110,000,000 (one hundred and ten million) New Shares.
Legal basis: Article 17(1) of MAR (Regulation (EU) 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).