Current report no 23 / 2017

Agreement on the provision of strategic investor’s support to Budimex SA

Agreement on the provision of strategic investor’s support to Budimex SA

The Management Board of Budimex S.A., in relation to the current report No 70/2012 of 29 October 2012 and current report No 45/2013 of 8 July 2013, hereby informs that on 28 March 2017 Budimex S.A. and Ferrovial Agroman S.A. (a construction company that belongs to Ferrovial Group – a strategic investor of Budimex S.A.) concluded a new Licence Agreement with effect from 1 January 2017. As part of the Agreement Ferrovial Agroman grants to Budimex a license for intangible industrial assets that support the core activity of Budimex in the scope of all construction works and infrastructure management. Ferrovial Agroman shall also provide intangible assets it develops in future, as well as those it currently holds and undertakes to further improve and develop intangible assets by developing the best practices and know-how of Ferrovial Agroman.

Essential terms and conditions of the Agreement:
 
• The remuneration for the performance of the Agreement is 0.5% of the value of annual revenues for sales of Budimex Group less the revenues from sales of Budimex Nieruchomości Sp. z o.o. (a real estate development company wholly owned by Budimex S.A.).
• In connection with requests filed in 2013 with the Minister of Finance in Poland and in Spain for the recognition of the choice and application of transaction price (Bilateral APA) the contractual remuneration may be changed.  Should this be the case the Parties shall settle in accordance with the decision of the Ministers of Finance.
• The Agreement shall be valid from 1 January 2017 to 31 December 2022.
• The Agreement enters into force on the date of its signing with effect from 1 January 2017.
• If Budimex Group suffers a financial gross loss in any quarter during the term of the Agreement the payment of contractual remuneration shall be suspended until the Group demonstrates gross profit for the period of at least 3 months.
• The agreement shall be settled in PLN.
• Payments shall be made on the basis of monthly invoices within 30 days from the date of their receipt.
• Contractual penalties: in the case of a delay in payment of an invoice interests shall be charged in the amount of WIBOR for annual deposit +2% starting the first day of the delay.
• During the term of the Agreement Budimex may withhold the payment of the license fee if Ferrovial Agroman S.A. is in delay with the delivery of transfer price documents to Budimex S.A.

At the same time Budimex S.A. and Ferrovial Agroman S.A. agreed to settled the previous Licence Agreement made on 29 October 2012, to which the above-said reports referred and which expired on 31 December 2016. This Agreement shall be definitely settled by 30 March 2017 by the payment of the difference between advance payments made by Budimex S.A. during the term of the Agreement and the rate stipulated in the Agreement being 0.5% of value of annual revenues for sales of Budimex Group less the revenues from sales of Budimex Nieruchomości Sp. z o.o. (a real estate development company wholly owned by Budimex S.A.). The impact of this Agreement on the result was recognised in the reference years 2012 2016.