A promisory note issued for the subsidiary IZOSTAL S.A.

On 14 June 2016 STALPROFIL S.A. issued a promissory note guarantee vor the subsidiary IZOSTAL S.A. in Kolonowskie. Promissory notes issued by IZOSTAL S.A. and guaranteed by STALPROFIL S.A. constitute a security advance payment guarantees issued by TUiR Warta S.A. and PZU S.A.
The value of advances intended for the fulfillment of the agreement dated 3 June 2016 (contract for the supply of insulated steel pipes DN1000 for gas pipeline Lwówek-Odolanów), concluded between OGP Gaz-System S.A. (Purchaser), a consortium involving IZOSTAL S.A. and STALPROFIL S.A. (Contractor) by which the Consortium Leader - IZOSTAL S.A. intends to apply to the Employer is 37142 thousand PLN.
The guarantee was granted for a fee and the remuneration of the issuer has been established on market conditions. The guarantee was granted for the period of validity of advance payment guarantee (27.07.2017).
The framework agreement concluded on 17.4.2015 between the Employer and the Contractor allows the possibility of the Contractor receives an interest-free advance towards the realization of partial agreements to the amount of 30% of gross contractual remuneration. As security for advances granted to Purchaser requires the submission of a guarantee insurance or bank issued equal to the value of the advance.
The total value of securities which STALPROFIL S.A. granted IZOSTAL S.A. as security for repayment of advances received from OGP Gaz-System S.A., or to obtain IZOSTAL S.A. which will be applied as of 15 June 2016 is 70 139 thousand PLN.
IZOSTAL S.A. is a subsidiary of STALPROFIL S.A. The issuer holds 60.28% of the share capital of the company.