The Izostal S.A. Supervisory Board consent for the purchase of Kolb sp. z o. o. shares by Stalprofil S.A.

Legal basis: Art. 17 Clause 1 MAR - confidential information.
 
CONTENT OF THE REPORT:
The Management Board of Izostal S.A. (Management) hereby informs that the Supervisory Board of Izostal S.A. (Supervisory Board), on its session of December 12, 2017 has adopted a resolution on the expressing of a consent for the purchase from the Parent Entity Stalprofil S.A. of a portfolio of Kolb Bp. z o.o. shares.

Based on the subject resolution, the Supervisory Board, pursuant to § 12 item 2 point m) subpoint v) of Izostal S.A. Statute and § 12 item 2 point 17 subpoint e) of Izostal S.A. Supervisory Board rules has expressed a consent for the purchase by Izostal S.A from the Parent Entity Stalprofil S.A. of a portfolio of Kolb Sp. z o.o. shares in the amount of 1549 pieces (100% of basic capital), of nominal value PLN 2000 per share, for a total price not higher than PLN 15 000 000 for the total of shares. Moreover, the Supervisory Board has authorized Izostal S.A. Management to stipulate detailed conditions of the transaction.

The transaction of Izostal S.A. purchase from Stalprofil S.A. of Kolb Sp. z o.o. shares constitutes a continuation of the development of Izostal S.A.   

The Management of Izostal S.A. has conducted analysis of the potential possibility of use of assets in Izostal S.A. and Kolb Sp. z o.o. companies, located in a single town (Kolonowskie) in terms of improving the level and effectiveness of their utilization. As a result of the conducted analysis, the Management has recommended to the Supervisory Board a purchase of 100% shares of Kolb Sp. z o.o. by Izostal S.A., being in the possession of Stalprofil S.A. parent entity. In the Board's opinion, the purchase of Kolb Sp. z o.o. shares will have positive impact on the further development, effectiveness of business processes and competitiveness of Izostal S.A. company.

The above transaction will allow to perform the following business goals:

1. Broader use of the production potential of both companies in terms of entry on new anti-corrosion protection markets.
2. Diversification of production capacities of Izostal S.A. with the use of Kolb Sp. z o.o. know-how, particularly in terms of anti-corrosion protection and processing of pipes.
3. Utilization of the research & development potential of the two companies for developing new anti-corrosion technologies.
4. Obtaining an effect of synergy by the two companies situated in the town of Kolonowskie, by:
    a) co-operating for the purpose of optimum use of the material infrastructure of both entities (storage infrastructure, production   infrastructure),
   b) co-operating in regard to utilization of the intellectual potential of both companies in terms of developing modern anti-corrosion proofing technologies, particularly the use of "Izostal S.A. Research & Development Center for Steel Technologies and Products",
   c) forming a joint purchase group, aiming at achieving a stronger negotiation position with suppliers/contractors, and the resulting better price and non-price terms (e.g. by joint transfer of power, transporting services),
   d) optimizing the provision of joint services (e.g. maintenance, logistics).
5. Optimization of costs, including costs related with R&D, financial, marketing and legal services.
6. Fuller utilization of the regional potential and conditions.

Kolb Sp. z o.o. seated in Kolonowskie has belonged to Stalprofil S.A. capital group since year 2008.  The Company deals with production and installation of steel structures, producing, among others: metallic prefabricated buildings (industrial halls), metallic structures (structural framings, pillars, towers), machinery structures (components of high storage facility equipment), etc.

The Company is also present on the metallics anti corrosion proofing market, holding a broad know-how in this regard.

The income of Kolb Sp. z o.o. for 2016 amounted to PLN 39 162 thou., and its net profit was PLN 1 224 thou. For year 2017, the expected income of Kolb Sp. z o.o. should be around PLN 52 999 thou., and its net profit - PLN 1 424 net.

The Management of Izostal S.A. will report the concluding of the above mentioned purchase transaction, and present its significant contractual terms through a separate current report.

The Management of Izostal S.A. is planning to finalize the transaction in January 2018.


SIGNATURES OF PERSONS REPRESENTING THE COMPANY:
Management Board President, Marek Mazurek 2017-12-12
Proxy, Marek Matheja 2017-12-12
 
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