Kauno Energija - Notification on material event

Vilnius Commercial Arbitration Court approved a peaceful agreement between AB Kauno Energija and UAB Kauno Termofikacijos Elektrinė by which a litigation in case No. 268 was terminated

 Vilnius Commercial Arbitration Court (hereinafter – Arbitration) approved on
29 January 2016 a peaceful agreement concluded between AB Kauno Energija
(hereinafter – the Company) and UAB Kauno Termofikacijos Elektrinė (hereinafter
– KTE) on 23 December 2015 by which a litigation in case No. 268 regarding
noncompliance of Investment agreement of 31 March 2003 (including all changes)
(hereinafter – Investment agreement) was terminated. The litigation continued
since April 2013. The decision of Arbitration was received by the Company on 02
February 2016. 

Following essential terms of peaceful agreement:

1. Investment agreement between both sides is being terminated.

2. KTE obliges to pay compensation for the Company in amount of EUR
2,316,960.15 following this order: 

2.1. KTE immediately acknowledges sum in amount of EUR 1,592,910.10 suspended
by the Company as a part of the compensation paid by KTE and resigns any
claims; 

2.2. KTE obliges to pay EUR 724,050.05 to the Company in equal parts yearly
until 28 February 2018. First contribution must be paid until 28 February 2016. 

3. KTE disposes part of Kaunas critical centralized heat supplies
infrastructure to the Company for proprietorship as a non-financial
compensation, i.e. immovable property (manifolds building and coherent
pipelines) as well as part of technological circuit equipment, necessary to the
Company (hereinafter together – the Assets). 

4. The Company leases technological circuit equipment taken from KTE for KTE
for the 25 years period, manifolds building – for 15 years period and subleases
land for the 15 year period holding the right for bargain regarding additional
term until KTE performs its activity and remains able to pay. 

5. KTE obliges to make certain a proper maintenance and upkeep of the Assets as
well as a proper functioning of the whole centralized heat supplies system in
so far as it is coherent to the Assets, and the Company holds the right for
modernization of manifolds building and other assets taken at the discretion of
its own and at its own expenses, not changing their functionality. 

6. The Company gains the lease right to the part of land plot, coherent with
the Assets taken and (or earlier if KTE will not continue cogeneration
activities, or later if the sides will agree regarding additional term of lease
of manifolds building and of sublease of the land plot) is able to develop this
land plot at the discretion of its own according to the legislation after 15
years period. 




         Loreta Miliauskienė, Head of the Economics and Planning Department,
tel. +370 37 305 855