On November 9, 2007, UNIPETROL, a.s. ("Unipetrol"), as a purchaser, and
(i) MEI-Tsjechië en Slowakije Fonds N.V., with its registered office at Zwiepseweg 27, 7241GM Lochem, Netherlands, registered in „Kamer vam Koophandel Veluwe en Twente" Netherlands, Reg. No: 06083012 ("TSF"),
(ii) MIDDEN EUROPESE BELEGGINGSMAATSCHAPPIJ S.A., with its registered office at 16, ALL. MARCONI, L-2120 LUXEMBOURG, registered in „Registre de Commerce et des Sociétés" , Luxembourg, Reg. No.: B 51498 ("MEB"), and
(iii) BLUE MOUNTAIN, s.r.o., with its registered office at Prague 10, Říčanská 1984/5, Zip Code: 101 00, Reg. No: 27179176, registered in the Commercial Register maintained with the Municipal Court in Prague, Section C, Insert 102309 ("Blue Mountain", together with TSF and MEB, the "MEI Companies"),
as sellers, executed three (3) in all material aspects identical share purchase agreements, pursuant to which Unipetrol, as a purchaser, shall acquire from the MEI Companies, as sellers, the shares of PARAMO, a.s., with its registered office at Pardubice, Přerovská No. 560, Zip Code: 530 06, Reg. No.: 48173355, registered in the Commercial Register maintained by the Regional Court in Hradci Králové, Section B, Insert 992 ("Paramo"), which represent in the aggregate 14.51 per cent stake in the registered capital of Paramo (the "Sale Shares"). For the sake of completeness, Unipetrol shall acquire (i) from TSF 11.39 per cent of the Sale Shares, (ii) from MEB 3 per cent of the Sale Shares, and (iii) from Blue Mountain 0.12 per cent of the Sale Shares.
The aggregate purchase price for the Sale Shares amounts to CZK 241,303,750, provided that the purchase price for one (1) share of Paramo shall equal to CZK 1,250.
The purchase price may be subject to the limited price adjustment. The mechanism can be only triggered if Unipetrol within the agreed time period undergoes some steps towards further restructuring of Paramo which would influence the terms and conditions offered to the MEI Companies.
For purposes of the determination of the purchase price, the Board of Directors of Unipetrol has undertaken a rigorous analysis and evaluation of the Sale Shares. Outlined below is a brief information on the procedure of the investment process concerning the purchase of the Sale Shares by Unipetrol:
On 3 September 2007 Unipetrol received the invitation from WOOD & Company ("Wood") to participate in a tender for acquisition of the Sale Shares owned, at present, by the MEI Companies.
After the thorough analysis of the proposed investment opportunity, Unipetrol presented its binding offer to Wood on 12 October 2007. After submission of the binding offer, the relevant parties engaged in extensive negotiations concerning the terms and conditions of the transaction.
During the investment process, Unipetrol's Board of Directors has applied the rule of transparency and investment process was monitored by the Supervisory Board and its respective committees. The purchase by Unipetrol of the Sale Shares from the MEI Companies was approved by the Supervisory Board and the Board of Directors of Unipetrol provided that the approvals were granted prior to the execution of the Share Purchase Agreements.
The project has been supported by the following external advisors – WEIL, GOTSHAL & MANGES v.o.s., as legal advisor, and Erste Corporate Finance, a.s., as financial advisor.
Paramo is a crude oil processing company engaged in fuels, lubricants and bitumen manufacturing. As the oil processing belongs to Unipetrol's core businesses, the purchase of the Sale Shares shall enable to strengthen the Unipetrol's position within this business segment and to proceed with further restructuring of the Paramo with the aim to implement more flexible management of Paramo and its strategic compliance with interests of Unipetrol group.
Important Notice
Please note that the settlement of the transaction is subject to the fulfillment of the conditions precedent agreed by the parties in the Share Purchase Agreements. It is expected that the transfer of the Sale Shares shall be completed by the end of year 2007.
Additional Information
Paramo has the registered capital in the amount of CZK 1,330,078,000 which is divided into 1,330,078 pieces of ordinary book-entered shares of Paramo with the nominal value of CZK 1,000 per a share.
The book value of Paramo shares in the Unipetrol books amounted to CZK 146,684,000 as of September 30, 2006.
The Sale Shares represent 193.043 pieces of Paramo shares which represent approximately 14.51 per cent ownership interest and voting rights in Paramo. Unipetrol shall acquire (i) from TSF 151,478 pieces of the Sale Shares, (ii) from MEB 39,960 pieces of the Sale Shares, and (iii) from Blue Mountain 1,605 pieces of the Sale Shares.
In Prague, 9 November 2007
UNIPETROL, a.s.