Menu Close

Conclusion of a significant contract

Conclusion of a significant contract

The Management Board of PROCHEM S.A. informs that has signed with BIOAGRA S.A. an agreement of design work and for acting in the capacity of Management Contracting (GRI) for extension and modernization of the process installations in the Ethanol Production Plant “Goświnowice”. The signing on the part of BIOAGRA S.A. requires corporate approvals, which will be obtained until 22 June this year.

The agreement shall enter into force in the scope of the part of design work on the day of its signing by the Parties. Remuneration of PROCHEM S.A. due to preliminary design work will be PLN 4,937,540.

The agreement shall enter into force in the scope of other design works and implementation of technological deliveries and construction and assembly works upon the transfer by BIOAGRA S.A. of a written decision on starting of implementation of the agreement in the full scope. This decision will be conditional upon obtaining financial support for the implementation of the investment; the agreement provides for transfer of that decision to PROCHEM S.A. by 31 August 2018.

The time for implementation specified in the agreement – 16 months from the entry into force of the agreement in the full scope.

The remuneration formula for acting in the scope of Management Contracting includes a margin and covering the costs of realization the subject of the agreement, hence the remuneration of PROCHEM S.A. it will be possible to determine after the final settlement of the costs incurred.

The contract provides for contractual penalties, their value is limited to PLN 2.4 million. Each party shall be entitled to seek for compensation on general principles above the amount of contractual penalties, but no more than PLN 12 million.

The Management Board of the Issuer’s company decided that the above information meets the criteria for confidential information specified in Art. 7 section 1, 2 and 4 of MAR due to the expected value of the agreement – above PLN 150 million.