Report no.: 24/2014

Legal basis: Art. 56 Clause 1 Item 2 of the Offering Act - current and periodic information.

 

SUBJECT: Concluding of a contract by Izostal S.A. for the delivery of coated steel pipes DN 300 to O.G.P. Gaz-System S.A.

 

CONTENT OF THE REPORT:

Following the current report no 23/2014 of September 15th, 2014, the Management Board of Izostal S.A. (Company, Contractor) informs that on October 15th, 2014 Izostal S.A. was informed about the contract with Gaz-System S.A. Gas Transmission Operator Branch in Wroclaw (Orderer).

The contact subject is selling and delivery of pipes for completion of investment task named: "Supply of coated pipes DN 300 for construction of gas pipeline DN 300 Polkowice - Zary together with obtaining of taking-over certificate of type 3.2 according to PN-EN 10204 or equivalent".

The contract value is PLN 20 785 127,50 (net), which constitutes PLN 25 565 706,82 gross. The Contractor shall accomplish the contract object within 12 months from the day of concluding the agreement

The agreement contains the following provisions concerning potential penalties:

1. The Contractor shall pay the Orderer penalties for:

a)  delays in supplying each batch of the agreement’s subject, in an amount of 0.2% of net remuneration for such batch of the subject per each day of delay,

b)  delays in repairing pipes or delivering new items in case of defects discovered upon receipt, within the warranty period, in an amount of 0.2% net remuneration for batch of the defective agreement’s subject, per each day of delay,

c)  terminating the agreement by any of the parties for reasons attributable to the Seller, in an amount of 10% of net contractual remuneration. 

2. Total amount of contractual penalties shall not exceed 30% of net contractual remuneration defined in the Agreement.

3. The Orderer has the right to keep appropriate part of the Contractor's due remuneration to secure contractual penalties owed to the Orderer. The Orderer may return this part of the remuneration after provision by the Contractor of insurance guarantee or bank payment of the penalties with the content accepted earlier by the Orderer.

4. The Orderer has also the right to deduct the contractual penalties from the remuneration owed to the Contractor.

5. If the contractual penalty does not cover the damage incurred, or if the cause for damage is not included in the provision on contractual penalties, the parties may claim compensation according to the Civil Code.

Other terms of the Agreement do not vary from the typically adopted for this kind of contracts.

The Agreement is deemed as significant agreement, as its value exceeds 10% of the Company’s equity.

 

Specific legal basis: §5 clause 1 item 3 of the Ordinance of the Minister of Finance of February 19, 2009 on current and periodic information disclosed by the issuers of commercial papers and the conditions for recognizing as equivalent the information required by the laws of a non-member state (Journal of Laws No. 33, item 259 as amended).

 

SIGNATURES OF PERSONS REPRESENTING THE COMPANY:

Management Board President, Marek Mazurek  2014-10-15

Management Board Vice President, Michał Pietrek 2014-10-15

 

INFORMATION ON THE ENTITY:

Full name of the issuer: IZOSTAL SPÓŁKA AKCYJNA

Abbreviated name of the issuer:  IZOSTAL S.A

Sector based on the classification of Warsaw Stock Exchange:  Other industry

Address: 47-120 Zawadzkie Polna 3

Telephone: (77) 405 65 00

Fax: (77) 405 65 01

e-mail:info@izostal.com.pl

www.izostal.com.pl

VAT No. [NIP]:756-00-10-641

Statistical No. [REGON]: 530884678