PGE Mining and Conventional Power Generation, PGNiG Termika and Energa Cogeneration signed an agreement setting out the conditions concerning. Financial investment in Polish Mining Group (PGG). The company eventually invest in PGG 500 million zł. The new entity was created with 11 mines, plants and 4 of the unit separated from the Coal Company.
“PGE Mining and Conventional Power signed an agreement to acquire the target of 17.1 per cent. Stake in Polish Group Mining. financial investment is carried out under market conditions and is in line with the strategy of PGE, because protects the company resource base with parameters adapted to the existing and construction of power units “- said in a statement.
– the PGE Group is leader in the energy sector in Poland, producing approx. 40 percent. the electricity consumed in the country, because the realization of investment securing the delivery of high-energy coal for generation assets, well in line with the business strategy of the Group. After putting into operation two new, high-performance units in Opole Power Plant with a total capacity of 1,800 MW, the demand for coal in the Group will increase from approx. 5.6 currently approx. 7.5 million tons – said the president of PGE Henryk Baranowski, quoted in the statement .
PGNiG also invests
subsidiary of PGNiG signed an agreement setting out the terms concerning. financial investment in PGG, and in particular the principles of acquisition of 5 000 000 shares in PGG of the total 500 million zł, said in a separate statement PGNiG.
the statement said that the acquisition of shares will take place in three stages. The result of the first stage will be the acquisition by PGNiG Termika shares representing 15.7 per cent. capital PGG the contribution of 361.1 million zł, payable no later than within 4 working days after the conclusion of the PGG investment agreement.
The result of the second stage will increase by PGNiG Termika of ownership stake in PGG to level of 16.6 percent. capital PGG the contribution of 83.3 million zł paid to the November 3, 2016 year, and the result of the third stage will increase by PGNiG Termika of ownership stake in PGG to 17.1 percent in the share capital of PGG the contribution of 55, 6 million zł paid to 1 February 2017 year.
due to the lack of control, as defined in IFRS 10 “Consolidated financial statements”, PGG will not be a subsidiary of PGNiG, and not be subject to full consolidation.
the agreement with Energa
On the other hand, as a result of signing the contract Energa Cogeneration will cover 15.7 percent. stake in PGG, and with successive tranches ultimately paid with this share will increase to 17.1 per cent., said Energa.
– I want to emphasize that the Energa involved in PGG on market conditions and will consistently monitor the implementation of the company’s business plan, which will enable the achievement of the expected rates of return for investors. Assuming that the energy sector Polish is largely based on coal and in the coming decades will remain so, investment is enormous chances – in a few years’ perspective – be for energy companies benefit, especially when the prices of coal on the market will be higher than today. Investments, including those strategic, take the moments when interesting assets are attractively priced and can be purchased at a reasonable price – said the president of the company Energi Dariusz Kaśków, quoted in the release.
“The agreement is based on market principles and the project aims to provide the expected rate of return on investment, including through improving the efficiency of the mines included in the PGG and – consequently – to achieve its specified levels of profitability, “- states as well.
the investment agreement this is another step contained 26 April 2016 r. in Katowice agreement on setting up Polish Mining Group, which was formed with 11 mines, plants and 4 of the unit separated from the Coal Company. The agreement outside investors have also signed bank-bond holders Coal Company: Alior Bank BGK, BGZ BNP Paribas, PKO BP, Bank Zachodni WBK and 13 trade unions Coal Company.
Investors eventually recapitalize PGG totaling 2.417 billion zł , of which 1.800 billion zł will contribute cash, and the remaining amount – 617 million zł – will come from the conversion of receivables TFS and Węglokoks.
“Energa Cogeneration, PGE Mining and Conventional Power and PGNiG Termika invest eventually in PGG 500 million zł, FIPP FIZAN 300 million zł, TFS 400 million zł and Węglokoks 217 million zł (total exposure Węglokoks in PGG with previously incurred expenditures in the amount of 500 million zł will amount to 717 million zł). Investors do not plan to consolidate as a result of PGG full method “- said Energa in a statement.
As part of the refinancing of the current bond program in the Coal Company, banks, Węglokoks and TFS will include new bonds issued by PGG the amount of 1 billion 148 million zł in four tranches repaid in the years 2019 -2026. Involvement Węglokoks reach the level of 421.5 million zł, the involvement of banks – 615.5 mln zł and TFS – 111, 1 million zł – are given.
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