Contents of the report
The Management Board of PGE Polska Grupa Energetyczna S.A. („PGE”) discloses that on August 12, 2013 PGE Górnictwo i Energetyka Konwencjonalna S.A., a PGE subsidiary, concluded an agreement with Kompania Węglowa S.A. (“Kompania Węglowa”) for hard coal supplies.
Subject matter of the agreement (“Agreement”) is supply of hard coal by Kompania Węglowa for power plants within PGE Group for 2014-2018 years. The net value of Agreement amounts to approx. PLN 5.6 bn.
Price of hard coal for consecutive years within the Agreement is determined on factors of the average electricity price and average market price of hard coal.
The aggregate value of contractual penalties shall not exceed 10% of the non-delivered supply volumes based on the Agreement. PGE may seek compensation claims on general basis exceeding the value of contractual penalties.
Concluded agreement meets criteria of the material agreement since it exceeds value of 10% of PGE’s equity.