Conclusion by the Consortium composed of Izostal S.A. (Consortium Leader) and Ferrum S.A. (Consortium Partner) of an Agreement for the supply of DN500 and DN300 coated steel pipes to O.G.P. Gaz-System S.A.

Legal basis: Art. 17 Clause 1 MAR - confidential information.
 
CONTENT OF THE REPORT:
In reference to the current report No. 17/2021 of 11 June 2021, the Management Board of Izostal S.A. (Company) informs that on 30 July 2021, the Consortium of companies (Contractor) composed of: Izostal S.A. (Consortium Leader) and Ferrum S.A. (Consortium Partner) concluded an Agreement with the Gas Transmission Operator - Gaz-System S.A. (Ordering Party) on the “Delivery of DN500 and DN300 coated steel pipes for the task: Connection to the transmission network EC Czechnica - in the town of Siechnice”.
The subject of the Agreement covers the supply of externally coated and internally painted steel pipes: DN500 with a length of approx. 5 km and DN300 with a length of approx. 7 km. The order will be completed within 18 weeks from the date of signing the Agreement.

The net value of the Agreement is PLN 13.9 million, which is PLN 17.1 million gross.

The participation of the parties to the Consortium in the performance of the Agreement will result from the actual involvement of Izostal S.A. and Ferrum S.A., respectively, in individual stages of preparation and implementation of deliveries. As at the date of conclusion of the Agreement, it is estimated that the Consortium Leader will have the majority share in the performance of the agreement, however, taking into account the perspective of delivery times as well as the logistic requirements related thereto, the involvement of the parties to the Consortium in the performance of the Agreement is not permanent and may be changed.

The Agreement provides for the following contractual penalties for O.G.P. Gaz-System S.A.: for a delay in the performance of the Subject of the Agreement up to 21 days - in the amount of 0.2% of the net contractual remuneration; for a delay in the performance of the Subject of the Agreement exceeding 21 days - in the amount of 0.3% of the net contractual remuneration; for a delay in the removal of any defects identified during the quality guarantee or warranty period for defects - in the amount of 0.05% of the net contractual remuneration for each day of delay; for withdrawal by the Ordering Party or the Contractor from the Agreement for reasons attributable to the Contractor - in the amount of 20% of the total net contractual remuneration. The total amount of contractual penalties charged to the Contractor is limited to 20% of the net contractual remuneration.

The subject of the Agreement is covered by a 36-month quality guarantee and a warranty for defects on the delivered goods. In order to ensure the proper performance of the Agreement, the Consortium will provide a performance bond in the amount of 5% of the Remuneration specified in the Agreement.

The remaining terms of the Agreement do not deviate from the standard terms and conditions applied in this type of agreement.

The Management Board of the Company considers the Agreement to be significant due to the priority related to the implementation of deliveries to O.G.P. Gaz System S.A.
 
SIGNATURES OF PERSONS REPRESENTING THE COMPANY:
Management Board President, Marek Mazurek  2021-07-30
Management Board Vice President, Michał Pietrek  2021-07-30

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: 47-113 Kolonowskie, Opolska 29
Telephone: +48 77 405 65 00
Fax: +48 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