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#Current report 42/2018

Current report no. 42/2018 (29.03.2018)

Title:

Conclusion of the agreement with PPG Industries Poland sp. z o.o.

Legal basis:

Art. 17 sec. 1 Market Abuse Regulation

Message:

The Management Board of the Issuer hereby informs that on the 28th March 2018 URSUS S.A. cocnluded with PPG Industries Poland sp. z o.o. Branch in Warsaw a commercial contract, on the basis of which the parties settled the conditions of cooperation related to use by the Issuer of PPG products in its economic activities concerning painting od surfaces of manufactured products.

The Parties agreed that during the whole term of the contract, URSUS S.A. together with the subsidiary URSUS BUS S.A. shall purchase PPG products at competitive prices in the total net amount not lower than 30,4 million PLN, according to the agreed order schedule.

The concluded contract is connected with the involvement of PPG Industries Poland sp. z o.o. in the Issuer’s investment consisting of creation in the production plant of URSUS S.A. in Lublin of one the most modern and innovative paint shops in Poland. The investment is executed by the Issuer within the long-term investment plan being a part of the strategy of the Manegemet Board. The newly launched paint shop will be used for painting products URSUS and buses URSUS BUS. Execution of the consequent stages of the project is expected in the next quarters of this year, while launching of the modern paint shop shall take place by the end of the third quarter 2018. The net value of the investment shall be around 3 million PLN.

The above-mentioned contract is concluded for a definite period and it remains effective till the 27th March 2023.

Moreover, according to the contract provisions, PPG Industries Poland sp. z o.o. within the cooperation shall ensure to the Issuer a technical care related to use of PPG products, periodic technical audits consisting of checking compliance of use of painting technology with PPG technological standards and giving guidance on use of PPG technology. Besides, PPG will provide regular trainings concerning new products and technologies of their use in painting of machines and vehicles manufactured by URSUS S.A. and URSUS BUS S.A.

The concluded contract specifies mutual rights and obligations of the parties in relations with its execution and terms of settlement of all due payments resulting from execution of the contract provisions.

The provisions of the contract concluded with PPG do no differ from conditions commonly used for such type of agreements.

The contract with PPG contains provisions on contractual penalties, which shall be payable by the Issuer for termination of the contract before the expiry of its validity, in the amount from 2% to 10% of the maximum discount amount received from PPG. Payment of contractual penalties does not waive the right to seek damages, the value of which may exceed the level of such penalties.

The warranty of on-time deliveries of innovatove and highly efficient PPG painting products, with the required parameters and in sufficient quantities, ensures to the Capital Group URSUS stability related to use of the highest-quality technological solutions in the process of manufacturing URSUS products, enabling an achievement of intened quality and quality objectives.

The reason of publication of this information is the fact that in the Management Board’s opinion it can impact the evaluation of the potential of the Issuer and its capital group, as well as its current situation.

The above-mentioned contract is considered to be material due to the fact that its total estimated value exceeds 10% of the equity of the Issuer’s Capital Group presented in the last published by the Issuer consolidated financial statement of the Capital Group URSUS.