Concluding an addendum to the Pledge Agreement with BRE Bank S.A.

Date  of issue: 2012-08-31
 
Legal basis: Art. 56 Clause 1 Item 2 of the Offering Act - current and periodic information.
 
SUBJECT: Concluding an addendum to the Pledge Agreement with BRE Bank S.A.

CONTENT OF THE REPORT:
Izostal S.A. (Company) informs that on August 31, 2012 it concluded an addendum to the Pledge Agreement No. 11/008/11 of April 28, 2011 concluded with BRE Bank S.A. (“Bank”) seated in Warsaw (current report no. 55/2011). On the basis of the addendum to the Pledge Agreement, the Company increases the value of the registered pledge on movable property (inventory of goods, production materials and finished products in the form of coated steel pipes) in favor of the Bank from PLN 10,000,000 to PLN 16,000,000.

The value of the pledge was increased following the conclusion on August 31, 2012 of the Loan Facility Agreement no. 11/086/12/Z/FR with BRE Bank S.A. (revolving loan in PLN) and the Addendum to the Multi-currency Overdraft Agreement no. 11/158/11/Z/VW for the amount of PLN 10,000,000 (current report no. 8/2012).

Following the conclusion of the Loan Facility Agreement no. 11/086/12/Z/FR the Company received a revolving loan in PLN in the amount of PLN 10,000,000. Izostal S.A.  can utilize the loan without submitting separate loan applications, in the period from August 31, 2012 to August 28, 2014. The financial means received via this loan will be used for the financing of ongoing operations. The repayment of the loan is secured by a blank promissory note and a registered pledge on the stocks of goods, materials for production and finished products in the form of coated steel pipes, in the amount of PLN 10,000,000.

The loan bears an interest rate based on WIBOR 1M plus Bank’s margin.

The Company concluded this revolving loan facility agreement in order to secure the current needs of the Company related to the realization of contracts for the delivery of coated pipes.

Moreover, according to the addendum (dated August 31, 2012) to the multi-currency overdraft agreement no. 11/158/11/Z/VW for the amount of PLN 10,000,000, the amount of the registered pledge on inventory of goods, materials for production and finished products in the form of coated steel pipes, was decreased from PLN 10,000,000 to PLN 6,000,000. The other essential conditions of the Agreement remained unchanged.

To the best of the Company’s knowledge, there are no connections between Izostal S.A. and persons managing or supervising the Company and BRE Bank S.A. as the holder of the registered pledge BRE Bank S.A. or any persons managing the bank.

The amount of the registered pledge established on the basis of the addendum (of August 31, 2012) to the Pledge Agreement No. 11/008/11 is higher than the equivalent of the amount of EUR 1,000,000 in Polish zlotys, and therefore it meets the criterion of a significant asset.
 
Specific legal basis: §5 clause 1 item 1 of the Ordinance of the Minister of Finance of February 19, 2009 on current and periodic information disclosed by the issuers of commercial papers and the conditions for recognizing as equivalent the information required by the laws of a non-member state (Journal of Laws No. 33, item 259 as amended).

SIGNATURES OF PERSONS REPRESENTING THE COMPANY:
Management Board President, Marek Mazurek 2012-08-31
Proxy, Marek Matheja 2012-08-31
 
INFORMATION ON THE ENTITY:
Full name of the issuer: IZOSTAL SPÓŁKA AKCYJNA
Abbreviated name of the issuer:  IZOSTAL S.A
Sector based on the classification of Warsaw Stock Exchange:  Other industry
Address: 47-120 Zawadzkie Polna 3
Telephone: (77) 405 65 00
Fax: (77) 405 65 01
e-mail:info@izostal.com.pl
www.izostal.com.pl
VAT No. [NIP]:756-00-10-641
Statistical No. [REGON]: 530884678