Conclusion of the Cooperation Agreement with mBank S.A. and the Agreement Establishing Mortgage for the Benefit of mBank S.A.

Legal basis: Art. 56 Clause 1 Item 2 of the Offering Act - current and periodic information.
 
CONTENT OF THE REPORT:
The management board of Izostal S.A. (“Company”, “Borrower”) informs that on 30 June 2016 it concluded a cooperation Agreement (“Agreement”) with mBank S.A. („Bank”) with its registered office in Warsaw.

As a result of this Agreement, the Company shall be able to use, until 28 June 2019, a line of credit in the amount of PLN 70,000,000.00, made available in the form of the following banking products:
•  non-renewable working capital facilities in PLN, EUR and USD currencies up to PLN 70,000,000.00,
•  renewable working capital facilities in PLN, EUR and USD currencies up to PLN 70,000,000.00,
•  guarantees in PLN, EUR and USD currencies up to PLN 70,000,000.00,
•  letters of credit without advance coverage in PLN, EUR and USD currencies up to PLN 70,000,000.00,

Financial resources coming from the mentioned line of credit will be used by the Company for financing its current business activity.
The Agreement bears interest rate at: WIBOR 1M + Bank’s margin for the part used in PLN, EURIBOR 1M + Bank’s margin for the part used in EUR and LIBOR 1M + Bank’s margin for the part used in USD.
The Agreement is secured by an in blanco bill of exchange together with a bill of exchange declaration and by a contractual joint mortgage in the amount of PLN 91,000,000.00 established on the real estate placed in Kolonowskie town for which the District Court of Strzelce Opolskie, 5th Division of Land and Mortgage Register maintains the land and mortgage registers no. OP1S/00040617/8, KW no. OP1S/00069370/3 and KW no. OP1S/00069371/0. Moreover, collateral of the guarantees under this Agreement constitutes of 5 in blanco bills of exchange together with a bill of exchange declaration.

The remaining financial conditions of the granted credit do not depart from those commonly used in this type of agreements.
The Company regards the a/m agreement as substantial, as its value exceeds 10% of equity of Izostal S.A.

What is more, on 30 June 2016 Izostal S.A. concluded an Agreement establishing mortgage with mBank S.A. („Bank”) with its registered office in Warsaw under which the Company establishes contractual joint mortgage in favour of the lending Bank to the amount of PLN 91,000,000.00 on the Company’s right to perpetual usufruct of real estate placed in Kolonowskie, and on the relating ownership of buildings and rooms erected on this land, for which rights the District Court of Strzelce Opolskie, 5th Division of Land and Mortgage Register maintains the land and mortgage registers no. OP1S/00040617/8, KW no. OP1S/00069370/3 and KW no. OP1S/00069371/0. The mortgage in question constitutes a security for repayment of the line of credit provided under the abovementioned Cooperation Agreement. Total index value of these assets as of 30.06.2016 amounts to: PLN 87,310,194.52
Following the signed agreement establishing the mortgage, an appropriate mortgage annotation shall be made.

According to the knowledge of the Company, between Izostal S.A. (including persons managing or overseeing the Company) and mBank S.A (including persons managing and overseeing it), for which the contractual joint mortgage was established, there are no links.
 
The mortgage is of greater value than the equivalent of EUR 1 million converted according to the average rate of exchange of the National Bank of Poland as of the day of concluding the pledge agreement, thus meeting the criterion of substantial value assets.

Specific legal basis: §5 clause 1 item 1 and 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  2016-07-01
Proxy, Marek Matheja 2016-07-01
 
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: 47-113 Kolonowskie  Opolska 29
Telephone: +48 77 405 65 00
Fax: +48 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