Conclusion by the subsidiary Izostal S.A. of a contract for the supply of insulated DN700 steel pipes to AB Amber Grid
The Management Board of STALPROFIL S.A. (the Company) in reference to the current report 24/2019 dated 29 May 2019 informs that on 25 July 2019, the subsidiary Izostal S.A. (the Supplier) concluded with AB Amber Grid with its registered office in Vilnius, Republic of Lithuania (the Employer), a contract for the supply of insulated DN700 steel pipes for an investment project carried out by AB Amber Grid: construction of a Poland-Lithuania gas interconnector (GIPL) on the territory of the Republic of Lithuania, approximately 170 km long.
The value of the contract is 26,425 thousand EUR net, which after conversion according to the exchange rate of the National Bank of Poland published on 24 July 2019 amounts to PLN 112,520 thousand PLN net.
The contract provides for delivery by 31 December 2021 at the latest.
The contract contains the following important provisions regarding the possible imposition of contractual penalties:
- for delay in delivery of goods not exceeding 15 days, the Employer will be entitled to demand from the Supplier a penalty for delay in the amount of 0.05% for each day of delay counted from the value of goods not delivered on time;
- for delay in the delivery of goods for a period exceeding 15 days, the Employer will be entitled to demand from the Supplier a penalty for delay in the amount of 0.1% for each day of delay counted from the value of goods not delivered on time;
- in the event that due to a delay in the delivery of goods, it is not possible to use other goods delivered to date, the penalties for late payment will be calculated on the total price of the goods;
- in the event of refusal to accept the goods from the Supplier or its return, in the cases provided for in the aforementioned contract, the Employer has the right to demand a penalty of 10% of the returned goods, but not less than 3 thousand EUR;
- in the case of non-compliance with the facts of the statements and guarantees contained in the contract, the declarant and the guarantor will pay the other party a penalty of 1% of the total value of the goods for each non-compliance,
- the Supplier's liability under this agreement is limited to the value of the contract, except in cases of gross negligence or fraud of the Supplier;
- if the contract is terminated for reasons attributable to the infringing party, the infringing party will pay the other party a penalty of 10% of the total price of the goods and compensate for any direct losses that exceed their size above the penalty.
The subject of the contract is covered by a 36-month quality guarantee. The guarantee period starts from the date of delivery of the goods to the Ordering Party.
The Supplier is obliged to provide the Employer with a performance guarantee for an amount corresponding to 10% of the total net contractual remuneration specified in the contract.
The contract has been concluded and will be performed and interpreted in accordance with the law of the Republic of Lithuania.
The other terms of the contract do not differ from the standard terms used for this type of contracts.
The Management Board of the Company considers the described contract to be significant due to its high value. The implementation of the aforementioned agreement will have an impact on the increase in revenues of the STALPROFIL S.A. Capital Group.