PGNiG: Preliminary offer to acquire new shares in Polska Grupa Górnicza Sp. z o.o.

The Management Board of Polskie Górnictwo Naftowe i Gazownictwo SA (“PGNiG” or the “Company”) announces that on March 15th 2016 the Company’s subsidiary PGNiG Termika S.A. made a preliminary non-binding offer to acquire new shares in the increased share capital of Polska Grupa Górnicza Sp. z o.o. (“PGG”) with a total value of up to PLN 400 million. The offer is subject to the satisfaction of certain pre-conditions, including implementation of restructuring measures to ensure that all PGG entities achieve operating profitability and generate positive cash flows to build up equity, and execution of binding agreements with trade unions to enable the delivery of planned objectives.
The preliminary offer to acquire shares in PGG was made subject to a number of conditions precedent. These include:
- conducting of technical, environmental, legal, financial, tax and market due diligence investigations based on current data, to the satisfaction of PGNiG Termika, to provide assurance that, once completed, the proposed transaction will enable PGG to achieve sustainable profitability and liquidity,
- preparing of financial forecasts, to be presented by the Management Board of Kompania Węglowa S.A. of Katowice (“KW”), based on viable assumptions, ensuring that the company would require no additional equity capital or debt financing,
- entering into investment agreements with other investors participating in the transaction with a minimum total value of PLN 1.5 billion and restructuring of KW’s debt which is to be assumed by PGG. This includes negotiating of debt restructuring terms satisfactory to PGNiG Termika and signing of appropriate agreements to ensure stability of PGG’s operations in the long term,
- obtaining of internal corporate approvals as well as anti-trust and other administrative clearance by PGNiG Termika,
- PGNiG Termika and other investors agreeing on a financing structure for PGG that would eliminate the risk of their investment qualifying as unlawful state aid.
PGG is to operate based on mining assets currently owned by KW. The business which is to be transferred together with KW’s liabilities to PGG comprises the following business units: KWK Chwałowice Division of Rybnik, KWK Jankowice Division of Rybnik, KWK Marcel Division of Radlin, KWK Rydułtowy-Anna Division of Rydułtowy, KWK Bielszowice Division of Ruda Śląska, KWK Bolesław Śmiały Division of Łaziska Górne, KWK Halemba-Wirek Division of Ruda Śląska, KWK Piast Division of Bieruń, KWK Pokój Division of Ruda Śląska, KWK Sośnica Division of Gliwice, KWK Ziemowit Division of Lędziny, CHP Plant Division, Mining Projects Division, IT and Telecommunications Division, Repair and Manufacturing Division and Head Office.