Body of the report:
The Management Board of Jastrzębska Spółka Węglowa S.A. (“JSW”, “Company”) hereby reports that on 13 December 2017 it signed a cooperation agreement with PGE Towarzystwo Funduszy Inwestycyjnych S.A. and ALTUS Towarzystwo Funduszy Inwestycyjnych S.A. acting jointly as a Consortium (“TFI”) for the establishment and management of a Closed-End Mutual Fund (“FIZ”) created by JSW. The agreement will enter into force following the receipt of consents from the Company’s bondholders and JSW’s corporate authorities.
FIZ will strive to stabilize the Company’s current liquidity and curtail the impact of the risk of volatility of coal and coke prices on maintaining the continuity of the JSW Group’s operations and investments.
In periods of upswing on the coal markets, the Company intends to transfer a portion of its cash surpluses to FIZ to have them invested. The Company will be able to use the funds accumulated in FIZ in periods of market downturn and/or in periods of negative cash flows generated by the Company. In parallel, these funds will offer financial support for long-term and medium-term expense planning associated with the execution of investment projects of strategic importance for the Company and the JSW Group aimed at, among other objectives, the expansion of mining capacity, improved access to deposits, coal preparation and coke production.
TFI will apply a conservative investment policy in managing the portfolio of the newly created fund. The fund’s cash will be invested in very secure liquid assets, including primarily State Treasury bonds, other treasury debt instruments and other instruments for which the applicable exposure limit has been strictly defined in the fund’s investment policy.
The Company assumes that the application for registration of FIZ will be delivered to the Court by the end of 2017 and that upon its creation it will receive a contribution of PLN 1-1.5 billion.
Legal basis: Article 17 Section 1 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse 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.