ELEL HOLD
The Board Management Elemental Holding S.A. with its seat in Grodzisk Mazowiecki ("Issuer") announces that today (i.e. 24 July 2015) the Issuer's subsidiary - Tesla Recycling Limited Liability Company S.K.A. with its seat in Grodzisk Mazowiecki (hereinafter referred to as: "Tesla") concluded the negotiations of which start the Issuer informed in the current report 14/2015 dated April 3rd, 2015, and signed with the majority shareholder of the company Gorenje Surovina d.o.o. with its seat in Maribor, Slovenia (hereinafter: "Gorenje Surovina") Gorenje Gospodinjski Aparati, d.d. with its seat in Velenje, Slovenia (hereinafter: "Seller") Agreement on sale and purchase of business share No 191760 and No 174847, of nominal value, amounting respectively
4,552,539.00 EUR and 1,039,536.03 EUR (hereinafter "Shares"), constituting 69.32% of the Gorenje Surovina share capital and representing 69.32% of votes on the Gorenje Surovina shareholder's meeting (hereinafter: "SPA").
The SPA agreement was concluded on the following conditions:
1. Determination of the subject SPA. Significant financial conditions SPA.
Tesla, after fulfilment of the conditions precedent set out below shall acquire the Shares in Gorenje Surovina on the Purchase Price calculated in accordance with the following:
Purchase Price = (100% of the enterprise value of the company Gorenje Surovina and its Subsidiaries equal 29,200,000.00 EUR less Net Debt on the closing date of transaction) multiplied by 0,6932
which will be paid by cash in a form of the transfer in three instalments, of which the first shall amount to 5,000,000.00 EUR and shall be paid on the closing date of
transaction, the second shall constitute 30% of the Purchase Price +/- a Purchase Price Adjustment and will be paid within one year from the closing date of transaction and the third in the amount of 30% of the Purchase Price, which shall be paid not longer than within two years from the closing date of transaction.
In addition, until the payment of Purchase Price in full, the interests shall be payable to the Seller in the amount 1% p.a. counted in each case from the open balance
payment of the Purchase Price, payable together with the payment of the second instalment of the Purchase Price for the period from the day following the day after
the first instalment payment of the Purchase Price until the day of payment the second instalment of the Purchase Price and along with the payment of the third instalment of the Purchase Price for the period from the day following the day of payment the second instalment of the Purchase Price until the day of payment the
third instalment of the Purchase Price .
Date of closing the transaction is dependent on fulfilment the conditions precedent
and shall not take place later than until 31 March 2016..
2. Conditions precedent the SPA agreements.
For the effective purchase of the Shares, from the closing date of transaction, the following conditions precedent must be fulfilled:
(a) The Seller shall redeem the shares in Gorenje Surovina, which are held by the company (treasury shares),
(b) The Seller and Gorenje Surovina shall have performed a reorganisation of the ownership structure in Gorenje Group so that Gorenje Surovina shall be the registered owner of 100% business share in each Daughter Company, except in "Cleaning system S" d.o.o. Šabac, Serbia, where Kemis Valjevo d.o.o. shall have 100% voting rights, and in no other member of Gorenje Group, (hereinafter "Daughter Companies"),
(c) Intra-group loans under the Finance Agreements granted by Gorenje Surovina to members of the Group other than the Daughter Companies and intra-group loans under the Finance Agreements granted by any Daughter Company to other members of Gorenje Group (except Gorenje Surovina), have been repaid or transferred in full to another entity in the course of spin-off as part of the Reorganization and any collateral granted by Gorenje Surovina or any Daughter Company in relation to the Finance Agreement concluded by any member of Gorenje Group other than Gorenje Surovina or Daughter Companies, shall be terminated as part of the reorganization,
(d) The supervisory body of the Company shall cease to exist as of Closing, (e) Gorenje Surovina shall obtain the consent of its creditors,
(f) The supervisory board of the Seller granted its approval to the sale of the Sale Shares on the terms and conditions set in SPA,
(g) Kemis Vrhnika d.o.o. has entered into a license agreement, in the form and substance satisfactory to Tesla, with Gorenje Surovina and / or the Daughter Companies, Kemis Valjevo d.o.o. and Kemis BH d.o.o., to allow the use of the trademark "kemis" in Bosnia and Herzegovina and in Serbia to Kemis Valjevo d.o.o. and Kemis BH d.o.o. for a period of 12 months after Closing,
(h) Gorenje Surovina has obtained a written confirmation from its lenders that after consummation of the envisaged transaction hereunder lenders shall accept collateral on assets of Gorenje Surovina as replacement collateral for the surety of Gorenje d.d. under long term loans. If the bank will not accept collateral on the assets of Gorenje Surovina, Tesla is obliged to offer additional collateral in order for the banks to replace the surety of Gorenje d.d.,
(i) The Seller shall have performed and complied in all material respects with all of its undertakings and obligations under SPA up to and including Closing,
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(j) Seller's and Tesla's Warranties shall be true and correct in all material respects at
and as of the Closing Date,
(k) Competition or other relevant Governmental Authorities have issued all merger control or antitrust notifications, clearances or approvals that are required for the purpose of consummating the transactions, if any. As soon as the required Merger Control Approvals are obtained or it is established that no Merger Control Approvals are required, Tesla shall immediately deliver to the Seller a notification / a copy thereof,
(l) The Issuer having issued to the Seller the irrevocable surety, guaranteeing for the fulfilment of payment of Purchase Price and interests jointly and severally with Tesla,
(m) No judgement, order, decision etc. which shall present the realization of transactions in such scope as specified in SPA shall not be issued,
(n) To the date of closing the transaction there shall not occur any events, circumstances, action, which could have the negative impact on the financial condition (or other), interests, business, operations or assets of Gorenje Surovina (Material Adverse Effect).
Simultaneously, the Issuer announces that today he has acquired awareness that the condition precedent stated in subsection f) hereinbefore has been fulfilled, i.e. the supervisory board of the Seller had granted its approval to the sale of the Sale Shares on the terms and conditions set in the SPA.
3. Liability of the Seller and penalties.
According to the provisions of SPA the Seller is responsible for the warranties and representatives submitted to Tesla, if:
the claim against the Seller from a single breach exceeds EUR 100,000.00; or
claims against the Seller from more than one breach in aggregate exceeds EUR
350,000.00. In the calculation of this sum, individual claims are only taken into consideration if and to the extent they exceed EUR 50,000.
Liability of the Seller on the warranties expires if Tesla does not notify the Seller in written form within 12 months from the closing date of transaction about appearing the circumstances able to cause arising the claim, except for the claims connected with the taxes, concerning the environment or compliance, of which presence Tesla must notify the Seller within 5 years.
As collateral for the payment of the second and third instalment of the Purchase
Price, Tesla will on the Closing Date enter into an agreement with the Seller for the creation of the first ranking pledge over the Sale Share to the benefit of the Seller with the prohibition of alienation and encumbrance of the Sale Shares. The ratio of the value of Share Collateral to the outstanding Purchase Price must not be less than
1,6. Upon payment of the second instalment of the Purchase Price, the Seller shall agree to release the Share Collateral on part of the Sale Shares provided that the ratio
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from the preceding sentence is at all times retained. The Share Collateral shall remain in force until the Purchase Price is paid in full.
The remaining conditions of SPA do not deviate from market used in similar agreements. The issuer shall inform about the next steps of realization of the transaction in question in the current reports.
The issuer considers the transaction as significant due to its value.
Besides, the transaction shall impact significantly on expansion of the operations range on the market of recycling used electric and electronic equipment. The transaction is therefore essentials from the point of view of strategic Issuer's business activity and the
share of Tesla in electro recycling area.
Gorenje Surovina is one of the biggest recycling companies operating on the territory of former Yugoslavia Countries. The company was established in 1951 and is operating in metal collection and recycling, waste electricity equipment and alternative fuel production sectors. The company is owner of 30 localisations of scrapyards and recyclable
waste sites in Slovenia, Serbia and Bosnia and Hercegovina. In the nearest future Gorenje
Surovina may grow in the other countries of the region.
The purchase of Shares in Gorenje Surovina shall be financed from own funds. Acquiring of shares the Issuer treats as the long-term investment.
Between the Issuer and the persons managing or supervising the Issuer and Seller and between Tesla and the managing persons or the supervising persons of Tesla and the Seller there are no connections.
1. § 5 par. 1 point 1) and 3) of the Regulation of the Minister of Finance as of 19
February 2009 on current information and periodical Publisher by the issuers of securities and the conditions for recognizing as equivalent the information required by laws of non-member state (Journal of Laws 2014.133);
2. Art. 56 par. 1 point 2) of the Act of 29 July 2005 r. on the public offer and conditions of implementing the financial instruments to the organized system f trading and on the public companies (Journal of Laws 2013.1382).
Paweł Jarski - President of Management
Jarosław Michalik - Vice-President of Management
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