Regarding questions that shareholders of AB Klaipėdos nafta asked in advance in relation to matters on the agenda of the General Meeting of Shareholders
Please be informed that AB Klaipėdos nafta, legal entity code 110648893, address of the registered office: Burių St. 19, Klaipėda (hereinafter referred to as the Company), received questions from shareholders of the Company in connection with matters on the agenda of the General Meeting of Shareholders to be held on 31 October 2019 at 13:00. Following paragraph 1 of Article 16¹ of the Law on Companies, we present answers to the shareholders’ questions and/or regarding additional documents requested to be provided:
QUESTION 1
When did the negotiations start with the Brazilian company UTE GNA I Geração de Energia SA for the Terminal Operator’s Services Agreement for GNA SGD terminal located in the port of Acu (the state of Rio de Janeiro), Brazil, and what are the main terms of the agreement planned to be concluded and of the planned cooperation?
ANSWER: The question is not related to the matters on the agenda of the General Meeting of Shareholders to be held on 31 October 2019 at 13:00. The terms and conditions of the Terminal Operator’s Services Agreement planned to be concluded (hereinafter referred to as the Agreement) are confidential information. The Company has made public the information for shareholders about the project intended to be carried out in Brazil, which is necessary for decision making on the matters on the agenda of the General Meeting of Shareholders to be held on 31 October 2019 at 13:00, in the notification of 9 October 2019 .
QUESTION 2
Present the cost– benefit analysis of the planned project with the Brazilian company UTE GNA I Geração de Energia SA for KN itself and for its shareholders, information about the planned economic benefit and possible risks in the course of fulfilment of the project
ANSWER: The question is not related to the matters on the agenda of the General Meeting of Shareholders to be held on 31 October 2019 at 13:00. But the Company additionally informs that the management and the Board of the Company assessed the costs and economic benefit of the planned project and, in the opinion of the management and the Board of the Company, the Agreement planned to be concluded with the Brazilian company UTE GNA I Geração de Energia SA is useful for the Company.
QUESTION 3
Present information on the effect that granting of guarantees for the Brazilian SPV by KN directly or indirectly will have on shareholders of KN and on the financial situation of KN
ANSWER: The management of the Company responsibly assessed the structure of the planned transaction and the possibilities of giving securities for obligations of the Company’s subsidiary in Brazil and, in the opinion of the management of the Company, the consolidated results of the Company will not be affected by the fact whether the Company participates in the said project itself directly or whether the Company issues a guarantee in order to secure obligations of the Company’s subsidiary established in Brazil, directly or indirectly. The guarantees issued by the Company directly and indirectly for the Brazilian SPV will be in accordance with market conditions and at the arm’s length, i.e. the prices of the controlled transactions will not differ from their fair market price, and the profit or income earned upon conduction of the controlled transactions will not differ from profit (income), which would have been earned if the transaction had been conducted at its fair market price.
QUESTION 4
Present information on calculations, referring to which a decision was made that the guarantee granted by KN for the Brazilian SPV should not exceed EUR 5,900,000
ANSWER: The Company presented information, based on what calculations a decision was taken that the guarantee granted by the Company for the Brazilian SPV should not exceed EUR 5,900,000 both in its notification of 9 October 2019 AB Klaipedos nafta is negotiating the Operations and Maintenance Services Agreement for the LNG terminal in Brazil and in the draft decisions proposed for the General Meeting of Shareholders to be held on 31 October 2019. The total maximal amount of the guarantees granted by the Company (both direct and indirect) cannot exceed 100 % of the annual income of the Brazilian SPV earned under the Agreement, consisting of:
- the fixed fee (which changes subject to annual inflation), and
- the variable fee (depending on the utilization of the terminal and which changes subject to annual inflation), and
- compensation for incurred expenses (depending on actually incurred expenses of a certain type, that GNA (or its legal successor) compensates under the Agreement)
and the total amount of which in one year, as estimated, should not exceed EUR 5 900 000 during the first year of the commercial operations of the terminal as established in the Agreement (without regard to possible foreign exchange fluctuations).
QUESTION 5
Present information, referring to which a decision was made, in performance of the project with GNA, to establish an SPV in Brazil, not anywhere else, e.g. in a Member State of the EU
ANSWER: The question is not related to the matters on the agenda of the General Meeting of Shareholders to be held on 31 October 2019 at 13:00, as the General Meeting of Shareholders is not to consider an issue in connection with choice of jurisdiction for establishing an SPV. The decision on jurisdiction for establishing an SPV has been taken by the Board of the Company, having assessed all significant circumstances.
The Company in its notification of 9 October 2019 AB Klaipedos nafta is negotiating the Operations and Maintenance Services Agreement for the LNG terminal in Brazil has made public the information that the Company is negotiating with UTE GNA I Geração de Energia SA for the Agreement for the LNG terminal in the port of Acu (the state of Rio de Janeiro), one of the key port complexes in Brazil, offering logistics solutions for the Brazilian oil and gas market. Performance of the project through a limited liability company established in Brazil is one of the project requirements, it is also in line with the practical need to establish the operating company in the location where services will be provided, i.e. namely in Brazil, not in some other Member State of the European Union.
QUESTION 6
Present information on legal regulation provisions ensuring protection of rights and interests of shareholders of the Brazilian SPV
ANSWER: The question is not related to the matters on the agenda of the General Meeting of Shareholders to be held on 31 October 2019 at 13:00, as the General Meeting of Shareholders is not to consider an issue in connection with choice of jurisdiction for establishing an SPV. The decision on jurisdiction for establishing an SPV has been taken by the Board of the Company, having assessed all significant circumstances.
Jonas Lenkšas, Chief Financial Officer,
