Approval of the National Centre for Research and Development on the admission of the consortium comprising the Issuer to the next stage of the Blocks 200+ Program

Current report No 38/2019

Legal basis: Article 17(1) of the Market Abuse Regulation (MAR) – confidential information.

The Management Board of Polimex Mostostal S.A. with the registered office in Warsaw (the “Issuer”, the “Company”) informs that it has received an approval of the National Centre for Research and Development (the “NCBiR”) on the admission of the consortium comprising of the following entities: the Company, Warsaw University of Technology, Transition Technologies S.A. and Energoprojekt-Warszawa S.A. (the “Consortium”) to the implementation of Stage 3 of the “Blocks 200+ Program, innovative technology for changing the working regime of 200 MWe power units” (the “Program”).

The Program is implemented based on the Agreement of 7 June 2018 (the “Agreement”) between the NCBiR and the Consortium for the implementation and financing of a project within the Blocks 200+ Program. The subject of the Agreement is the performance of R&D works with the aim to develop a novel, innovative, reference, test and low-cost technology for the modernization of steam, subcritical 200 MWe power units fired with coal or lignite. The purpose of this technology would be to transform the basic operation and maintenance parameters to adapt them to the new requirements and a specific working regime with greater load variability and large number of shutdowns and launches.

The Agreement has been divided into 3 stages of implementation with time and functionality as criteria for the division: Stage 1, Stage 2 and Stage 3. The Contractor's participation in the next stage of the implementation of the Agreement was conditional upon the approval of the NCBiR. The approval was based on the assessment of the Contractor's works in the previous stage, as well as his compliance with the formal and legal requirements outlined in the Agreement. The Issuer’s involvement in the implementation of Stage 1 and Stage 2 of the Program was considerably modest due to the specific nature of the works (the Issuer’s remuneration amounted to PLN 20,000 net and PLN 300,000 net respectively). The remuneration for the execution of works in Stage 3 amounts to PLN 62,461,817.00 net, of which PLN 50.212.108,70 net will be the share of Company. The acceptance of works from Stage 3 by the NCBiR has been scheduled for 30 March 2021. 

As a security for the proper performance of the Agreement in Stage 3 and in order to make settlements related to this security, the Issuer has submitted to the NCBiR a blank promissory note and a relevant promissory note statement with the maximum anticipated liability of PLN 50,212,108.70. 

The Agreement stipulates the possibility of its termination by each party with a two months' notice with the results of the termination governed by the applicable legal regulations. In addition, the Agreement specifies the circumstances when NCBiR may terminate the Agreement with immediate effect.

The detailed terms of the Agreement can be found on the website of the National Centre for Research and Development in the tab specifically devoted to the Blocks 200+ Program.