Conclusion of the negotiations in the sales process of shares in TAURON Ciepło Sp. z o.o.
Polskie Górnictwo Naftowe i Gazownictwo S.A. on 29 January 2021, expressed its will to discontinue the negotiations aimed at the acquisition of shares in TAURON Ciepło Sp. z o.o.
Due to the failure to conclude the transaction, the Management Board of the Company decided to commence analyses concerning the Heat Area, taking into account the projected changes in the external environment, including regulatory and market changes as well as taking into account the outlook of the Polish heat sector, which may affect further decisions on the sale of shares in TAURON Ciepło Sp. z o.o. or keeping the Company in the Group.
New subordinated bond issue scheme
On 11 March 2021, TAURON Polska Energia S.A. concluded the agreement with Bank Gospodarstwa Krajowego on the new scheme for the issue of subordinated bonds up to PLN 450,000 thousand.
The subordinated bond issue scheme provides for a possibility to carry out the issue within a period of two years from signing of the documentation. The financing period is 12 years from the date of issue. In the period of the first seven years following the issue, earlier redemption of the bonds by the Company is not possible and the earlier sale of bonds by BGK to third parties is not possible. The interest rate is variable based on WIBOR 6M increased by a fixed margin, and after the 7-year financing period, the margin is additionally increased.
If issued, the bonds will be subscribed by Bank Gospodarstwa Krajowego on the primary market.
Funds from the issue may be used to finance the Group’s current and investment needs, including projects related to Green Turn of TAURON.
Until the date of approval of these consolidated financial statements for publication, no bonds had been issued.
Contributions to the capital of Polska Energia-Pierwsza Kompania Handlowa Sp. z o.o.
On 17 March 2021, the Extraordinary General Meeting of Polska Energia-Pierwsza Kompania Handlowa Sp. z o.o. adopted a resolution on contributing to the company’s equity in the amount of PLN 10 800 thousand by the sole shareholder of TAURON Polska Energia S.A. As part of the additional payments, the funds were contributed by the Company on 24 March 2021.
Restructuring of the portfolio of CO2 emission allowances of the subsidiary Nowe Jaworzno Grupa TAURON Sp. z o.o.
After the balance sheet date, in March 2021, the Group restructured the portfolio of CO2 emission allowances of the subsidiary Nowe Jaworzno Grupa TAURON Sp. z o.o., in relation to the volume of 3,258,000 CO2 emission allowances, with the deadline for collection in March 2021.
Due to the delay in putting the 910 MW unit into operation and, consequently, lower production, the company’s portfolio had a significant surplus of allowances contracted for the purpose of meeting the redemption obligation for 2020 over the actual demand. As at the balance sheet date, the Group intended to purchase CO2 emission allowances with a maturity date of March 2021, therefore these contracts are recognized as excluded from IFRS 9 Financial Instruments and therefore are not measured at fair value as at the balance sheet date.
In the first quarter of 2021, as a result of the analysis of new premises and circumstances that appeared after the balance sheet date, the Group changed its intentions regarding the above CO2 emission allowances and decided to roll them over with the conclusion of new contracts with delivery dates in March 2022, 2023 and 2024.
Therefore, the original contracts were not settled by physical delivery, and therefore the Group recognized the contracts in accordance with IFRS 9 Financial Instruments at fair value at the date of the change of judgment, i.e. in March 2021, and then recognized the result from the settlement of the instruments, which resulted in an increase in its operating result in the amount of EUR 65,893 thousand.
New contracted transactions with an execution date in the years 2022-2024 are excluded from the scope of IFRS 9 Financial Instruments and are not measured at fair value. At the same time, these transactions were made at prices higher than the originally contracted purchase, which will increase the costs of establishing a provision by the Group for liabilities due to CO2 emissions for 2021 and subsequent financial years.
As a result of the above, the Group estimates that the total impact of the restructuring on its operating results in 2021-2023 will not be significant.
Signing an agreement for the sale of shares in PGE EJ 1 Sp. z o.o. for the State Treasury
After the balance sheet date, on 26 March 2021, the Company signed an agreement with the State Treasury for the sale of shares in PGE EJ 1 Sp. z o.o. (“Agreement”). The Agreement was signed by all entities holding shares in PGE EJ 1 Sp. z o.o. In addition to the Company, these are: PGE Polska Grupa Energetyczna S.A., Enea S.A. and KGHM Polska Miedź S.A., jointly (the “Shareholders”). The company PGE EJ 1 Sp. z o.o. is responsible for the preparation and implementation of the investment consisting in the construction and operation of the first Polish nuclear power plant.
Pursuant to the Agreement, the Company sold to the State Treasury 532,523 shares of PGE EJ 1 Sp. z o.o. representing 10% of the share capital and representing 10% of votes at the shareholders’ meeting of PGE EJ 1 Sp. z o.o. After closing the transaction, the Company will not have any shares in PGE EJ 1 Sp. z o.o. The selling price for 100% of the shares amounted to PLN 531,362 thousand, of which PLN 53,136 thousand is attributable to the Company. Payment for shares in PGE EJ 1 Sp. z o.o. will take place no later than 31 March 2021. The selling price will be subject to adjustment based on the valuation of PGE EJ 1 Sp. z o.o. updated as of the closing date of the transaction. In the opinion of the Company, any possible adjustment will not have a significant impact on the final sale price.
Moreover, the Shareholders concluded with PGE EJ 1 Sp. z o.o. an annex to the agreement of 15 April 2015 in the case of WorleyParsons, according to which the Shareholders are proportionally liable for the liabilities or are proportionally entitled to benefits potentially arising as a result of the settlement of the dispute with WorleyParsons up to the level of claims, together with interest as at 26 March 2021.