Press releases

Ciech has executed with the State Treasury an agreement that will enable it to acquire minority stakes in the group companies Zakłady Chemiczny Organika-Sarzyna, Zachem and Alwernia in consideration of new shares of Ciech

The Management Board of Ciech SA has begun to implement a new project aimed at organisation of the Group’s assets. Today, it has executed with the State Treasury an agreement on commencement of activities aimed at a new issue of Ciech shares addressed to the State Treasury. The agreement stipulates that, in consideration of  1 885 090 Ciech shares at PLN 23.5 each Ciech will receive 5.15 percent of shares of Zakłady Chemiczne Zachem SA, 5.06 percent of shares of Zakłady Chemiczne Organika-Sarzyna and 25.01 percent of shares of Zakłady Chemiczne Alwernia, which are now owned by the State Treasury. In consequence of the said operation, the share capital of Ciech will be increased by 3.56 percent.

– The agreement is favourable for both, the company and its shareholders. We hope that, due to the implementation of the agreement, the Group’s assets will be organised, the Group’s transparency and clarity will improve which will enable an optimum evaluation of assets – said Ryszard Kunicki, the President of Ciech. – At the same time, we will settle the liabilities set out in the contracts for purchase of Zachem and Organika-Sarzyna of 2006 without spending any money – he added.

In accordance with the contracts for purchase of ZCh Zachem SA and ZCh Organika-Sarzyna S.A. entered into in 2006, Ciech was obligated to repurchase from the State Treasury minority blocks of shares in the said companies. For that purpose, the Company submitted irrevocable offers for purchase of the minority stakes in Zachem and Organika-Sarzyna, the validity period of which will expire in 2016. In accordance with the contract, the Ministry of State Treasury was entitled to accept the said offers at any time and demand Ciech to repurchase the minority stakes for cash accounting for more than PLN 26 million. Being aware that the purchase of minority blocks of shares of Organika-Sarzyna, Zachem and Alwernia will result in an outflow of considerable funds, the Management Board of Ciech SA has been looking for the most favourable solution for a long time. The agreement is a result of the said works.

The acquisition from the State Treasury of a block of 25.01 percent of shares in ZCh Alwernia SA (PLN 18 332 741.56) may considerably facilitate the divestment process of the company enabling to implement the same at one stage. To date, in accordance with the articles of association of ZCh Alwernia, an investor acquiring a block of shares exceeding 32 percent of the company’s shares (Ciech holds 73.75 percent) would have to make the same offer to the State Treasury, which makes the entire transaction complicated. The acquisition of all shares will make the process easier.

The implementation of the agreement on an increase in the capital entered into today between the State Treasury and Ciech requires consent from the General Meeting of Shareholders. Ciech and the Ministry of State Treasury intend to adopt the increase in the share capital at an Ordinary General Meeting to take place at the end of June 2011.