39/2015: Conclusion of negotiations and execution of Annex 2 to a significant agreement
Further to Current Report No. 35/2010 of July 15th 2010 and Current Report No. 27/2013 of September 10th 2013, the Management Board of PBG S.A. w upadłości układowej (in company voluntary arrangement) (“PBG” or “Company”) announces that on September 9th 2015 Annex 2 was signed the contract “Delivery of the working design, construction and commissioning of the Liquefied Natural Gas Regasification Terminal in Świnoujście” executed between a Consortium including PBG and Polskie LNG S.A. (“PLNG”) on July 15th 2010. The Consortium is led by Saipem S.p.A. and comprises Saipem S.A., SAIPEM Canada Inc. (formerly Snamprogetti Canada Inc.), Techint Compagnia Tecnica Internazionale S.p.A., PBG S.A. w upadłości układowej (in company voluntary arrangement) and EGBP Sp. z o.o. w upadłości układowej (in company voluntary arrangement) (formerly PBG Export Sp. z o.o.) as consortium partners.
The following material amendments to the contract were made under the Annex:
(1) May 31st 2016 was indicated as the deadline for project completion, taking into account relevant changes to the intermediate project delivery milestones and detailed schedule of works;
(2) in view of the above, the Consortium agreed to extend the Performance Bond accordingly;
(3) Consortium’s liability for failure to meet completion deadlines was extended by:
a. increasing the total amount of contractual penalties that may be imposed on the Consortium for failure to meet the conditions required for signing the Project Handover Certificate and the Milestones, to 12.5% of the Contract Price;
b. increasing the total amount of all Contractual Penalties that may be imposed by the Employer under the Contract, to 22.5% of the Contract Price;
(4) the Consortium agreed to be properly engaged in the process of ordering and collecting LNG by PLNG; under the Annex, the Consortium assumed liability for any direct loss suffered or costs incurred by PLNG as a result of any action taken by PLNG in reliance on information provided by the Consortium regarding the delivery of LNG for commissioning purposes, in particular, the Consortium agreed to reimburse PLNG 70% of costs that may be incurred by PLNG in connection with a delay in the delivery. The Consortium’s total liability in this respect is limited to 5% of the Contract Price.
Furthermore, the Parties agreed to suspend the exercise of guarantee rights resulting from a contractual penalty having been levied for a delay in the delivery of the “April 15th 2014” Key Milestone, in order to enable the Parties to accurately assess the actual scope of the delay and the extent to which the delay can be attributed to the Consortium.
As new project completion deadlines, including for LNG deliveries, were negotiated and agreed by the parties, in the Annex PLNG also undertook to ensure that the statement of claim of March 20th 2015 filed in proceedings pending before the Regional Court of Szczecin (court docket No. VIII GC 140/5) is withdrawn, and to file for discontinuation of the proceedings (the Company became aware of the statement of claim for setting the date of the first LNG delivery on May 7th 2015). The Company further reports that, according to the information received on September 9th 2015, the statement of claim filed by PLNG was rejected on the grounds of lack of jurisdiction of the common court.