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Closing of the transaction regarding offshore wind projects

  • No. of the report: 14/2021
  • Report date: 06.05.2021 17:54
  • Report legal ground: Art. 17 sect. 1 of MAR – inside information.

Contents of the report

With regard to current report no. 3/2021 dated February 10, 2021, the Management Board of PGE Polska Grupa Energetyczna S.A. (“PGE”) discloses that on May 6, 2021, the relevant entities from PGE and Ørsted group, following the fulfilment of the conditions precedent, completed a transaction in which the relevant entities from Ørsted group subscribed for the shares representing 50% of the share capital of Elektrownia Wiatrowa Baltica – 2 sp. z o.o. (“EWB2”) and Elektrownia Wiatrowa Baltica – 3 sp. z o.o. (“EWB3”) – the companies developing two offshore windfarms: Baltica 2 (with a potential capacity of approximately 1.5 GW) and Baltica 3 (with a potential capacity of approximately 1 GW). Upon the registration of the share capital increase, Ørsted and PGE (acting through their respective subsidiaries) will become 50/50 partners in the joint ventures.

The total subscription price for 50% of the shares in EWB2 and EWB3 amounted to the equivalent of approx. PLN 686 million. The increased price primarily takes into account the capital injection to companies made by PGE, which took place after the signing of the investment agreement. Upon the fulfilment of certain assumptions, the relevant investors from Ørsted group will be required to provide EWB2 and EWB3 with additional cash contributions which may amount in total up to PLN 1 024 bn.

At the closing of the transaction the relevant entities from both Ørsted and PGE groups entered into a number of documents separately for each Baltica 2 and Baltica 3 (the “Transaction Documents”) including notably:

(i) the shareholders’ agreements regulating, inter alia, the corporate governance of the joint ventures, functioning of integrated project teams, obligations of the parties related to the funding of and providing for other support to the joint ventures, restrictions regarding the transfer of interest on the joint ventures as well as the consequences of any events of default and change of control;

(ii) the development services agreements regulating the provision of development services to the joint ventures by the respective affiliates of both parties;

(iii) the resource provisions agreements based on which both parties will delegate personnel to the joint venture;

(iv) the shareholder loan agreements under which the shareholders will provide debt financing (in addition to equity financing) to the joint ventures; and

(v) the corporate guarantees issued by both PGE and Ørsted Wind Power A/S under which both parties guarantee the commitments of their respective subsidiaries in the development stage of the projects.