Invalda AB - Notification on material event

Tiltra Group merger with Trakcja Polska completed

Vilnius, Lithuania, 2011-04-19 18:16 CEST (GLOBE NEWSWIRE) -- On 19 April 2011,
AB Invalda and other shareholders of Tiltra Group AB and AB Kauno Tiltai
(further - “Tiltra Group”) executed an agreement with the Polish listed railway
infrastructure construction market leader Trakcja Polska S.A. and it‘s largest
shareholder Comsa Emte (Spain) group and agreed to restore the effectiveness of
the agreement (further - “Agreement”) regarding merger of activities of Trakcja
Polska and Tiltra Group, which was signed on 18 November, 2010. Concurrently,
the parties agreed to amend the terms and conditions of the transaction
provided for in the Agreement and completed the deal on the same day. 
Total value of Tiltra Group in the transaction - 777,536,000 PLN (679,527,587
LTL; 196,804,792 EUR). 


Amounts provided below are attributable only to Invalda proportionately to its
participation in the deal. 

AB Invalda sold to Trakcja Polska 44.78% stake in Tiltra Group AB and 43.36%
stake in AB Kauno tiltai for total amount of 314,120,016 PLN (274,525,188 LTL;
79,507,990 EUR) and subsequently, AB Invalda acquired: 
(i) 29,017,087 newly issued Trakcja Polska shares for a 132,317,917 PLN
(115,639,243 LTL; 33,491,440 EUR) ( 4.56 PLN (3.99 LTL; 1.15 EUR) per share),
amounting to 12.5% in share capital of Trakcja Polska. 
(ii) 59,892 bonds of Trakcja Polska with par value 1000 PLN (873.95 LTL; 253.11
EUR) each, annual interest rate - 7% (paid out on 30 June and 31 December of
each year), maturity date - 12 December 2013, for 59,892,000 PLN (52,342,613
LTL; 15,159,469 EUR). 
(iii) 59,891 bonds of Trakcja Polska with par value 1000 PLN (873.95 LTL;
253.11 EUR) each, annual interest rate - 7% (paid out on 30 June and 31
December of each year), maturity date - 12 December 2014, for 59,891000 PLN
(52,341,739 LTL; 15,159,216 EUR). 
Remaining 62,019,099 PLN (54,201,592 LTL; 15,697,866 EUR) was paid to AB
Invalda in cash. 

Taking into account market price of acquired financial instruments at the
closing date, LTL/PLN exchange rate and expenses related to the transaction,
preliminary positive result in the consolidated financial statements of AB
Invalda group and financial statements of AB Invalda is approximately 152 mLTL
(44 mEUR) and 199 mLTL (57.6 mEUR) respectively. These results will be
adjusted, when all expenses related to the transaction will be known, and
announced in the financial statements of AB Invalda. 

Proceedings paid to AB Invalda for shares of Tiltra Group AB and AB Kauno
tiltai might be reduced depending on the financial results of Tiltra Group.
Also, Invalda has a liability in respect of representations and warranties
provided to Trakcja Polska, and regarding a title to sold shares. In general,
total liability of AB Invalda might not exceed total proceedings from the
transaction. 

AB Invalda is obliged for at least 12 months not to sell acquired Trakcja
Polska shares and also provided other guaranties for fulfilment of the
liabilities. 


As mentioned above, the parties agreed to amend the terms and conditions of the
transaction provided for in the Agreement in the following way (amounts
provided below are attributed to all shareholders of Tiltra Group): 
1. The Parties introduced a mechanism for reducing the Tiltra Price of
777,536,000 PLN (679,527,587 LTL; 196,804,792 EUR) in such a way that, if
Tiltra Group AB and AB Kauno tiltai do not reach the planned aggregated net
profit and EBITDA for the financial year ended 31 March 2011 and for the
financial year ending 31 March 2012 in accordance with the formula set out in
the Agreement. The need, if any, to reduce the Tiltra Price will be examined
both on the basis of the audited statements of the Tiltra Group AB and AB Kauno
tiltai for the financial year ended 31 March 2011 and for the financial year
ending 31 March 2012. In relation to the above the parties agreed that in the
period ending on the date on which the auditor provides (i) the opinion on the
consolidated financial statement of Tiltra Group AB and AB Kauno tiltai and
(ii) the calculation of the potential reduction of Tiltra Price, Tiltra Group
AB, AB Kauno tiltai and their subsidiaries will be managed by the persons
indicated by Tiltra Group Shareholders. 
2. The performance of the Agreement will not be contingent upon the Warsaw
Stock Exchange to resolve to introduce new Trakcja Polska shares to stock
exchange trading. 
3. Trakcja Polska will issue issue bonds in two series with the total nominal
value of 148,608,000 PLN (129,875,962 LTL; 37,614,678 EUR) each. First bonds
issue, as it was announced earlier, will be redeemed on 12 December 2013, and
second - 12 December 2014. Bonds bear interest of 7% p.a. (paid out on 30 June
and 31 December each year. All the bonds will be taken up by the Tiltra Group
Shareholders. 
4. Trakcja Polska will be entitled to demand from the Tiltra Group Shareholders
and from Comsa S.A. extension of the prohibition on selling and encumbering the
Trakcja Polska shares.  At the Trakcja Polska demand, the prohibition on
selling and encumbering the Company's shares held by the Tiltra Group
Shareholders and Comsa S.A. will be extended automatically until the entry in
the National Court Register of the conditional share capital increase of
Trakcja Polska becomes final and non-appealable or until the date on which the
statement of claim of Trakcja Polska shareholder Jacek Jurek is dismissed in a
final and non-appealable decision. 
5. In connection with the statement of claim filed by Jacek Jurek, the former
shareholder of Tiltra Group AB subsidiary Poldim S.A.,  for the transaction
involving the acquisition by Silentio Investments (the subsidiary of AB Tiltra
Group) of shares in Poldim to be declared invalid, the Tiltra Price will be
reduced accordingly. The parties agreed that, after the Transaction Closing,
the court dispute with Jacek Jurek referred to in this item will be conducted
by a legal advisor designated by the Tiltra Group Shareholders, at the Tiltra
Group Shareholders' cost. Management of AB Invalda and Tiltra Group AB is of
the opinion that J. Jurek claims are without merit and groundless. 


         Person authorised to provide additional information:
         Darius Sulnis, president, tel. +370 5 273 4876, darius@invalda.lt