Klaipedos Nafta AB - Notification on material event

The Government of the Republic of Lithuania approved the draft resolution of the Seimas of the Republic of Lithuania to grant a state guarantee to the European Investment Bank

On 20 June 2013, the Government of the Republic of Lithuania inter alia decided 
 to approve of the draft resolution of the Seimas of the Republic of Lithuania  
 (hereinafter, the Seimas) “On granting state guarantee to the European         
 Investment Bank” and to present it to the Seimas. According to the draft       
 resolution, it is intended to grant the state guarantee in the amount of EUR   
 81,093,605 (LTL 280 million) for the loan to be taken by AB Klaipėdos Nafta    
 (hereinafter, the Company) from the European Investment Bank (hereinafter, the 
 EIB), as the Company seeks to borrow this respective amount from the EIB. On 4 
 June 2013 EIB has approved the loan for the Company for up to EUR 87 million   
 (LTL 300 million).                                                             
If the above-mentioned draft resolution of the Seimas is adopted by the Seimas, 
 it would resolve:                                                              
1. To grant state guarantee to the EIB for the loan in the amount of EUR        
 81,093,605 (LTL 280 million) granted to the Company for the period up to 20    
 years at the interest rate set by the EIB for financing the investment project 
 “Liquefied Natural Gas Terminal” (hereinafter, the LNGT), the state assuming   
 guarantee obligations regarding repayment of the loan of EUR 81,093,605 (LTL   
 280 million) and payment of interest.                                          
2. To establish that the state guarantee regarding the above-mentioned loan will
 be valid if:                                                                   
2.1. the LNGT project implemented by the Company is transferred and the LNGT    
 activity performed by it is moved to a subsidiary directly 100 percent         
 controlled by the Company;                                                     
2.2. all the rights and obligations of the Company in connection with the       
 implementation of the LNGT project and LNGT activity are transferred to the    
 said subsidiary;                                                               
2.3. the Republic of Lithuania maintains at least 67 percent of the shares of   
 the Company and the Company maintains direct or indirect control over 100      
 percent of the shares of the subsidiary specified in paragraph 2.1 above       
 throughout the entire period of the loan specified in paragraph 1.             
3. To establish that the state guarantee cannot be signed until:                
3.1. the Company mortgages/pledges future real property of LNGT and concurrently
 related items, i.e. LNGT link and its technologic commodity, which will be     
 created in the future or which will come into the ownership of the Company or  
 the subsidiary specified in paragraph 2.1 above in the future, upon the        
 implementation of the LNGT investment project, by conditional mortgage (primary
 pledge) to the Ministry of Finance for the amount no less than 100 percent of  
 the loan specified in paragraph 1 in order to secure the fulfilment of         
 contractual obligations;                                                       
3.2. the Company pays a guarantee fee equal to 0.1 percent of the loan amount   
 specified in paragraph 1;                                                      
3.3. a confirmation is not received from the European Commission that the state 
 guarantee to be granted to the EIB is not regarded as state aid provided for in
 Article 107(1) of the Treaty on the Functioning of the European Union or is    
 regarded as state aid compatible with the internal market according to Article 
 107(3) of the Treaty.                                                    




         Mantas Bartuška, Director of the Finance and Administration
Department, +370 46 391 763