Conclusion by Izostal S.A. of a contract for the delivery of coated steel pipes to Polskie Górnictwo Naftowe i Gazownictwo S.A.

Date  of issue: 2012-08-20
 
Legal basis: Art. 56 Clause 1 Item 2 of the Offering Act - current and periodic information.
 
SUBJECT: Conclusion by Izostal S.A. of a contract for the delivery of coated steel pipes to Polskie Górnictwo Naftowe i Gazownictwo S.A.

CONTENT OF THE REPORT:
Following the current report no. 39/2012 of August 3, 2012, the Management Board of Izostal S.A. (Company, Contractor) informs that on August 20, 2012 Izostal was informed about the contract’s with Operator Polskie Górnictwo Naftowe i Gazownictwo S.A. seated in Warsaw (Customer) being signed by the other party.

The order refers to the delivery of steel pipes with an external three-layer anti-corrosion coating and with an internal coating for the public procurement order: "Pipeline to Odazotownia Grodzisk (nitrogen removal facility) – construction of the high-pressure gas pipeline DN300 from Terminal Ekspedycyjny Wierzbno (dispatch terminal in Wierzbno) to KGZ Paproć (natural gas mine) – purchase of pipes.”

Contract value: PLN 19,956,160.00, that is a gross value of the contract is PLN 24,546,076.80.

Delivery date: within 84 days from conclusion of the contract.

The Customer has the right to charge the Contractor with liquidated damages calculated on the basis of total gross consideration for the following events of default:

1) termination of the contract by the Customer (including withdrawal from the contract)  for circumstances attributable to the Contractor – in the amount of 8% of consideration,

2) delay in the hand-over of the delivery tranche: a) up to 20 days of delay – 0.01% of consideration for each started day of delay, b) from the 21st day of delay - in the amount of  – 0.05% for each started day of delay of over 2 days,

3) delay in repair of defects of over 7 days – 0.05% of consideration,

4) violation by the Contractor of the confidentiality clauses – 10% for any event of violation.

Furthermore, the Contract stipulates that the Customer will pay liquidated damages to the Contractor for termination of the Contract by the Contractor (including withdrawal from the Contract) for reasons attributable to the Customer in the amount of 8% of total gross consideration. Furthermore, the Customer is obligated to pay consideration for the pipes already supplied by the Contractor.

According to contractual stipulations, the Parties may claim compensation in excess of the liquidated damages in line with the commonly effective regulations.

The other conditions of the transaction do not differ from the conditions applied commonly for such contracts.

The contract meets the condition of a significant contract as its value exceeds 10% of Company’s equity. Total net value of the contracts concluded by Izostal S.A. with PGNiG S.A. and its subsidiaries since January 9, 2012 (current report no. 1/2012) has amounted to PLN 21,672,620.37 (net).
 
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 2012-08-20
Management Board Vice President, Jacek Podwiński 2012-08-20
 
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