Current Report No. 65/2017 of October 18, 2017
Publication of postponed confidential information about the signing of a conditional annex to the Shareholder Agreement concluded in connection with the planned investment of the subsidiary and revaluation of the option obligation, which has a material impact on the consolidated financial result of the Wirtualna Polska Holding SA Group in the fourth quarter of 2017
Legal basis: Art. Article 17 4 - delaying confidential information
Based on Article. Article 17 1 and 4 of European Parliament and Council Regulation No 596/2014 of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directive 2003/124 / EC, 2003/125 / EC and 2004/72 / EC ("MAR Regulation"). The Management Board of Wirtualna Polska Holding SA (The "Issuer") discloses confidential information, whose release was delayed by the Issuer on October 11, 2017, pursuant to Art. 17 (4) of the MAR Regulation.
Content of delayed confidential information:
The Issuer's Management Board announces that on October 11, was informed about the conclusion of an annex to this Agreement dated 7 June 2016 (hereinafter referred to as "Annex to the Agreement of Shareholders") between the Issuer's subsidiaries, ie Wirtualna Polska Media S.A. with its registered office in Warsaw ("WP Media"), Nocowanie.pl Spółka z o.o. with the registered office in Lublin ("Nocowanie.pl") and Mr. Kamil Ruciński ("KR"), collectively referred to hereinafter as the "Parties to the Shareholder Agreement", to which the Issuer informed in current report no 14/2016 dated 7 June 2016. The Annex to the Shareholder Agreement was concluded in connection with a change in the settlement of the settlement of the minority shareholding in Nocowanie.pl. The most important principles included in the Annex to the Shareholder Agreement are described below and related to the decision to revaluate the option obligation, as reported by the Issuer in current reports No. 13/2016. dated 23 May 2016 and No. 23/2017 of March 10, 2017, having a significant impact on the consolidated financial result of the Issuer's Capital Group in the fourth quarter of 2017.
In the Annex to the Shareholders Agreement, the principles of the planned investment of Nocowanie.pl, consisting in the acquisition by Nocowanie.pl of 100% of shares in the company eHoliday sp. Z o.o. ("Investment"). The Parties to the Agreement agreed that the Investment will be made on the basis of a share sale agreement with the content determined by Nocowanie.pl with the sellers, ie three natural persons who are Polish citizens and Nzolo Holdings Limited with registered office in Cyprus, with the participation of WP Media and KR. Failure to perform or improper performance of obligations under the contract referred to in the preceding sentence by the seller shall be secured by contractual penalties of the amount appropriate for such transaction and subject to the amount of the breach. The sale price of the shares will amount to PLN 11,250,000, while Nocowanie.pl will partially finance the investment from own resources and partly from loans granted to the company Nocowanie.pl by WP Media (PLN 6,488,000) and KR PLN 2,162,000). The Parties to the Shareholder Agreement have decided that following the implementation of the Investment, the clearing rules for the Redemption shall be changed in such a way that:
- The terms of the option will be changed, ie WP Media will have the right to purchase half of the minority interest from the CoR, and the CoR will be required to sell ("Call Option 1") after the end of the 2019 financial year (the original agreement was 2018 ) and the right to purchase by WP Media the remaining minority shares from the CoR, which the CoR will be obliged to sell (the "Buy Option 2"), will be created after the end of the financial year 2020 (the original agreement was 2019)
- The basis for calculating the value of shares to be redeemed will be changed in such a way that the price of the call option will be calculated as the product of (i) the normalized consolidated EBITDA Nocowanie.pl and the company whose shares are the subject of the Investment respectively for Option 1 for 2019 and for the Buy Option 2 for the financial year 2020 (ii) 12.5%, and (iii) the multiplier dependent on the average growth of standardized EBITDA for Option 1 in the years 2017 - 2019 and for Option 2 in the financial years 2017 - 2020 in relation to the consolidated normalized EBITDA for the financial year 2016, defined in the Shareholder Agreement.
The provisions of the Annex to the Shareholder Agreement regarding the change of settlements connected with the Redemption will come into force upon the transfer to the company Nocowanie.pl of the ownership of 100% of the shares being the subject of the Investment ("Suspension Condition").
At the same time, due to the change in the rules of settlements related to the Redemption, the Issuer's Management Board made on October 11, 2017. a conditional resolution indicating the necessity of updating the valuation of the option obligation to be redeemed in the Issuer's Capital Group, whereby the estimated value and the amount of its updating will be determined at the latest on the day of execution of the Investment and thus fulfilling the Suspension Condition. The increase in the value of the liability will be recognized in the financial costs of the Capital Group when the Suspension is met.
In the opinion of the Issuer, the delay of the transmission of the above confidential information was justified due to the risk of infringing the Issuer's legitimate interests, so that the earlier disclosure of such confidential information could have contributed to the failure of the Investment to take effect and the Suspension Condition in the Annex to the Shareholder Agreement and the revaluation of the option obligation to the Redemption would not be made.
The execution of the Investment - on the terms described above - and at the same time the fulfillment of the Suspension Condition included in the Annex to the Agreement of Shareholders took place today, ie October 18, 2017. At the same time, the Issuer's Management Board, by way of a resolution, today updated the discounted value of the Issuer's Group's liabilities due to its held redemption options by PLN 6.6 million. The Management Board of the Issuer also informs that the EBITDA of the company being the subject of the Investment for the last 12 months (excluding synergies) amounts to PLN 1,541 thousand zloty.
Accordingly, there is no basis for further delay of confidential information.
Legal basis: Art. Article 17 1 and 4 of European Parliament and Council Regulation No 596/2014 of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directive 2003/124 / EC, 2003/125 / EC and 2004/72 / EC
Signatures of persons representing the Company:
Jacek Świderski - President of the Management Board
Elżbieta Bujniewicz - Belka - Member of the Management Board of the Company