Report no.: 15/2015

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

 

SUBJECT: Signing by the consortium Izostal S.A. (Consortium Leader) and Stalprofil S.A. of a Framework Agreement within the scope of supply of pipes for investment tasks of O.G.P. Gaz-System S.A. – Part no. 1 and Part no. 2.

 

CONTENT OF THE REPORT:

With reference to the current report no. 27/2014 of 20.11.2014, the Management Board of Izostal S.A. (the Company) informs that on April 17th, 2015 as a Consortium Leader composed of Izostal S.A. and Stalprofil S.A. (Contractor) as a result of a public tender no. ZP/2013/11/0163/PW entered into a Framework Agreement with Gas Transmission Operator Gaz-System S.A. with its registered office in Warszawa (Contracting Authority), within the scope of supply of pipes for investment tasks of O.G.P. Gaz-System S.A. – Part no. 1 and Part no. 2.

 

The concluded agreement specifies terms and conditions for awarding and performance of Partial Agreements that may be concluded by the Contracting Authority with the Company as one of the contractors within the term of the Framework Agreement. The Framework Agreement anticipates supply of pipes with a total length of ca. 1057 km for investment tasks performed by O.G.P. Gaz-System S.A.

 

The subject-matter of the contracts awarded on the basis of the Framework Agreement shall be the supply of brand-new, externally coated and internally painted steel pipes for pipeline transportation system divided into following Parts:

Part no. 1: pipes with a diameter DN 700.

Part no. 2: pipes with a diameter DN 1000.

 

 

The Framework Agreement has been concluded for 4 years, starting from the date of its signature by both Parties to the Agreement. The Parties to the Framework Agreement shall be entitled to enter into Partial Agreements, completion date of which exceeds the term of the Framework Agreement, provided that a Partial Agreement shall be concluded with a contractor within the period of 4 years from the date of conclusion of the Framework Agreement.

 

The total remuneration for performance of the Partial Agreements within the scope of the Framework Agreement shall not exceed PLN 1,839,280,858 net.

 

The Agreement includes the following provisions regarding the possibility to impose contractual penalties:

1. The Contractor shall be obliged to pay to the Contracting Authority a contractual penalty in the amount of PLN 100,000 for each breach by the Contractor of the provisions on confidentiality.

2. The Contractor shall pay to the Contracting Authority contractual penalties for:

a. a delay not exceeding 30 days during performance of the Task in the amount of 0.2% of the net remuneration of the Contractor for performance of the given Task, for each day of delay.

b. a delay exceeding 30 days during performance of the Task in the amount of 0.3% of the net remuneration of the Contractor for performance of the given Task, for each day of delay above 30 days.

c. a delay in removal of stated defects within the period of guarantee for defects or quality warranty, in the amount of 0.05% of the net remuneration for the Task for each day of delay.

d. Withdrawal by the Contracting Authority from a Partial Agreement due to reasons attributable to the Contractor in the amount of 20% of total net remuneration of the Contractor for the Subject-matter of the Partial Agreement.

3. If the reserved contractual penalties shall not fully cover the damage suffered by the Contracting Authority, the Contracting Authority shall have a right to seek compensation exceeding the amount of contractual penalties.

4. The Parties agree that the total amount of contractual penalties calculated for the Contractor shall be limited to 20% of the net remuneration of the Contractor for the Subject-matter of the Partial Agreement.

 

For the purpose of securing claims of the Contracting Authority by virtue of failure to perform or improper performance of the Partial Agreement, the Contractor shall be always obliged to lodge a performance guarantee in the amount of 10% of total gross agreed remuneration specified in the Partial Agreement.

 

Other terms and conditions of the Agreement do not differ from the standard terms and conditions used for such agreements.

 

The Agreement meets the criteria of a significant agreement due to the fact that its value exceeds 10% of the value of the Company’s equity capital.

 

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  2015-04-17

Management Board Vice President, Michał Pietrek 2015-04-17

 

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