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Signing a letter of intent

Signing a letter of intent

Date of publication: 06.11.2019

The Management Board of PROCHEM S.A. with its registered office in Warsaw (hereinafter „Issuer”) informs that on November 2019 the Issuer signed a letter of intent with FOOSUNG POLAND sp. z o. o. as a result of approval by FOOSUNG POLAND sp. z o.o. of the Issuer’s offer regarding the execution of design works and perform the function in the formula of GRI (management contracting) for the construction of a plant producing components used in the construction of lithium-ion batteries for electric cars in Kędzierzyn-Koźle (hereinafter referred to as the “Investment”).

The remuneration formula in the scope of the Management Contracting includes a margin and coverage of the costs of implementing the subject of the contract, hence the Issuer’s remuneration will be possible to determine only after the final settlement of costs incurred.

The Issuer expects that it will amount to approximately PLN 400,000,000.00 (four hundred million) net.
Expected investment implementation period – 2020-2021. The final dates for the commencement and completion of works will be agreed by the parties in the contract.

Signing the agreement between the Issuer and FOOSUNG POLAND sp. z o. o. will be when the text is finally agreed and upon obtaining by FOOSUNG POLAND Sp. z o. o.

Pursuant to the signed letter of intent, Issuer will immediately begin design work and provision of procurement services after signing the letter of intent, still before the conclusion of the contract. If the parties do not conclude an agreement in the formula of Management Contracting (GRI), FOOSUNG POLAND sp. z o. o. shall pay the Issuer remuneration for design services and procurement services based on the letter of intent.

Anticipated remuneration of the Issuer for design and procurement services, along with remuneration for provided so far the initial engineering services for FOOSUNG POLAND sp. z o. o. will amount to approx. PLN 8 million net in 2019.

The Management Board of the Issuer’s company decided that the above information meets the criteria for confidential information specified in Art. 7 paragraph 1, 2 and 4 of MAR.