| Management Board of Work Service S.A. (the “Issuer” or the “Company”), informs that on 8 May 2019 the Issuer and Hungarian companies: Human Investors Kft. (“SPV”), Profólió Projekt Tanácsadó Kft. (“Profólió”) and Prohumán 2004 Kft. (“Prohuman”) agreed on the key terms of the transaction concerning the sale of shares in Prohuman by concluding the relevant “term sheet” document (the “Term Sheet”). The Term Sheet refers to a sale to SPV, a company created by managers associated with Profólió and Prohuman or another entity indicated by SPV: (i) of all shares in Prohuman held by the Issuer, representing 80.22% of the share capital of Prohuman (the “Controlling Interest”), and (ii) of all or part of the shares in Prohuman held by Profólió, representing 19.78% of the share capital of Prohuman (the “Non-Controlling Interest”). The selling price of the Controlling Interest consists of a cash price and settlement of all loans granted by Prohuman for Work Service increased by interest (amount of settlement of intragroup liabilities). The Basic Transaction on the conditions agreed in the Term Sheet at the time of closing will generate a gross profit (before tax) in the Issuer's separate financial statements in the amount of approx. PLN 49 mln. The funds obtained from the sale of the Controlling Interest will be allocated to: (i) the repayment of the loan granted to the Issuer under the loan agreement of 18 November 2015 (subsequently amended) concluded with Bank BNP Paribas SA, Bank Millennium SA, Santander Bank Polska S.A. and Powszechna Kasa Oszczędności Bank Polski S.A. about which the Company informed in current reports, inter alia, no. 43/2015, no. 34/2017, no. 7/2018, no. 82/2018 and no. 86/2018 in the amount of approximately PLN 110 mln (ii) further debt relief and reduction of liabilities of the Issuer's Group of Companies.. Term Sheet targets completion of the Prohuman sale process by SPV until 31 March 2020, with the possibility of its extension under certain conditions ("Basic Transaction"). The Term Sheet provides that for the purposes of executing the Transaction, an agreement regulating the cooperation of the parties in the sale process will be concluded, as well as granting SPV a 2-year option to purchase the Controlling Interest from the Issuer (with the possibility of its earlier expiry in certain cases) with the simultaneous granting SPV the right to designate the buyer of this interest during the Basic Transaction. For the duration of the Basic Transaction, the Issuer's previous obligation towards Profólió to purchase the Non-Controlling Interest by the Issuer (or another designated entity) resulting from the agreement dated 23 October 2017 and the annex to this agreement dated 29 June 2018 (about which the Issuer reported in reports No. 80/2017 and No. 31/2018 respectively), at the time of settlement of the Basic Transaction, this obligation will be suspended (as the Issuer will not purchase a Non-Controlling Interest as part of the Basic Transaction). Additionally, in connection with the reconciliation of the Basic Transaction, Profólió will waive the contractual penalty due from Company in the amount of PLN 3 mln in connection with the Issuer's obligation to repurchase the Non-Controlling Interest so far. In the event of failure to effect the Basic Transaction in the schedule described above, the parties have agreed terms of mutual settlements and further sale of Prohuman. In this case, the Issuer's current obligation to repurchase the Non-Controlling Interest, in addition to canceling the additional contractual penalty, will also be reduced by approximately PLN 4 mln and will be suspended and no interest will be charged on it for a maximum of 24 months from the completion of the Basic Transaction. The Alternative Transaction will provide complete Work Service control over the Prohuman sales process. At the time of the Basic Transaction and in case of its failure for the period up to 31.12.2021, the obligation to repay loans (and accrued and future interest) granted by Prohuman to Work Service in the current amount of approximately PLN 49 mln will also be postponed. The Term Sheet provides for a right of withdrawal under the conditions set out therein. The performance of the obligations specified in the Term Sheet will be secured by mutual contractual penalties and standard protections for this type of contracts. Other terms and conditions of the Term Sheet do not differ from those applied in agreements of this type. The planned sale of the Controlling Interest is a consequence of the Company's restructuring process. The Company informed about Prohuman’s sales process in current reports no. 86/2018 and 52/2018. The transaction on the conditions agreed in the Term Sheet will have a positive impact on the Issuer's financial situation, which the Issuer will inform about in a separate report. As a result of the conducted analysis, the Issuer decided that it is justified to classify the information indicated above as confidential information within the meaning of Article 17 (1) of the MAR, subject to publication in the form of this report. Legal basis: Article 17 (1) MAR (Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC). Signatures: Iwona Szmitkowska – President of the Management Board Paul Christodoulou – Vice-President of the Management Board | |
