Current report no 64 / 2018

Conclusion of an agreement on the sale of subsidiaries

In conjunction with the current report No 63/2018 of 17 September 2018, the Management Board of Budimex S.A. (“Budimex”) announces that on 17 September 2018 Budimex concluded the agreements on sale and the agreements on sale and transfer of rights from the shares with regard to two subsidiaries, Elektromontaż-Poznań S.A. with its registered office in Poznań (“EP Agreements”) and Biuro Inwestycji “Grunwald” S.A. with its registered office in Warsaw (“BIG Agreements”).

Pursuant to the EP Agreements, Budimex sold 5,351,890 shares of Elektromontaż-Poznań S.A. with its registered office in Poznań, entered into the register of entrepreneurs kept by the District Court Poznań – Nowe Miasto i Wilda in Poznań, 8th Commercial Division of the National Court Register under the No KRS 0000060700 (“EP”), constituting 98.96% share in the share capital of the Company (“EP Shares”), of the nominal value of PLN 3.40 per share, giving the right to exercise 5,351,890 votes at the General Meeting, i.e. 98.96% of votes at the meeting, against a total price of PLN 64,990 thousand (“EP Price”) to PG Energetyka spółka z ograniczoną odpowiedzialnością with its registered office in Radom at the following address: ul. Wrocławska 9b, 26-600 Radom, entered into the register of entrepreneurs of the National Court Register kept by the District Court for the capital city of Warsaw in Warsaw, 14th Commercial Division of the National Court Register under the No KRS 0000376449.

Pursuant to EP Agreements, the transfer of ownership of EP Shares was conditioned upon the full payment of the EP Price which was today credited to the bank account of Budimex. 

The remaining terms and conditions of the EP Agreements do not vary from the ones applied commonly in agreements of this type.

The total nominal value of EP Shares is PLN 18,196 thousand, i.e. PLN 3.40 per share.

No affiliation between Budimex, members of the Management Board and the Supervisory Board of Budimex, and PG Energetyka Sp. z o.o. and officers or directors of PG Energetyka Sp. z o.o. is known to exist.

Pursuant to the BIG Agreements, Budimex sold 354,224,740 shares of Biuro Inwestycji “Grunwald” Spółka Akcyjna with its registered office in Warsaw at the following address: ul. Stawki 40, 01-040 Warsaw, entered into the register of entrepreneurs kept by the District Court Poznań – Nowe Miasto i Wilda in Poznań, 8th Commercial Division of the National Court Register under the No KRS 0000603895 (“BIG”), constituting 98.96% share in the share capital of the Company (“BIG Shares”), of the nominal value of PLN 0.10 per share, giving the right to exercise 354,224,740 votes at the General Meeting, i.e. 98.96% of votes at the meeting, against a total price of PLN 43,078 thousand (“BIG Price”) to 2) Raven 9 spółka z ograniczoną odpowiedzialnością with its registered office in Warsaw at the following address: Rondo ONZ 1, p. 12, 00-124 Warsaw, entered into the register of entrepreneurs of the National Court Register kept by the District Court for the capital city of Warsaw in Warsaw, 12th Commercial Division of the National Court Register under the No KRS 0000648255.

Pursuant to BIG Agreements, the transfer of ownership of BIG Shares was conditioned upon the full payment of the BIG Price which was today credited to the bank account of Budimex. 

The remaining terms and conditions of the BIG Agreements do not vary from the ones applied commonly in agreements of this type.

The total nominal value of BIG Shares is PLN 35,422 thousand, i.e. PLN 0.10 per share.

No affiliation between Budimex, members of the Management Board and the Supervisory Board of Budimex, and Raven 9 Sp. z o.o. and officers or directors of Raven 9 Sp. z o.o. is known to exist.

The decision on the disposal of the EP Shares and BIG Shares was made due to the following facts that have to be considered jointly:

(i) Elektromontaż-Poznań S.A. conducts an activity analogous with the activity conducted by the subcontractors of Budimex and therefore was considered as a non-core asset for the core activity of the company,

(ii) the agreed price, according to the Management Board, corresponds with the fair value of the EP Shares and BIG Shares being sold,

(iii) Biuro Inwestycji “Grunwald” S.A. (“Recipient Company”) participated in the process of division of Elektromontaż-Poznań S.A. (“Divided Company”) conducted under the Article 529 section 1 item 4 of the Commercial Companies Code, pursuant to which on 1 February 2018 the Recipient Company took over the organized part of the enterprise of the Divided Company encompassing property management (“ZCP ZN”)

(iv) Budimex Nieruchomości sp. z o.o. with its registered office in Warsaw (fully owned subsidiary of Budimex) acquired ZCP ZN from the Recipient Company under a purchase agreement. 

As a result of the EP Agreements and BIG Agreements concluded, in the separate financial statements, Budimex S.A. will recognize a net profit of approximately PLN 66 million, whereas in the consolidated financial statements it will recognize the net profit of approximately PLN 44 million. The aforementioned numbers can change after the final settlement of the costs related to the completed transactions.