Current report 12/20172017-03-23

Current report no. 12/2017 (23.03.2017)

Title:

Conclusion of a contract for sale of tractors and agricultural machinery of the value 100 million USD

Legal basis:

Art. 17 sec. 1 Market Abuse Regulation

Message:

With reference to the Current report no. 11/2017, the Issuer’s Management Board informs that on the 23 March 2017 URSUS S.A. concluded with the company Industrial Development Corporation Limited (IDC) z with the seat in Lusaka (Republic of Zambia) an agreement for supply of agricultural tractors and machinery, implements, spare parts and related services. The total value of the above-mentioned Agreement at the moment of its signature is 100 million USD.

On the basis of the agreement the Issuer will deliver to the buyer 2694 agricultural tractors in SKD and CKD form, in the power range from 47 to 180 HP, with implements and spare parts, and 2506 agricultural machinery, like trailers, manure spreaders, round balers for straw and hay, harrows and ploughs.

Besides, according to the agreement’s provisions, URSUS S.A. in cooperation with IDC will establish in Lusaka an assembly plant for tractors and agricultural machinery URSUS and 10 authorized service centers on the territory of Zambia. The Issuer he Issuer will organize trainings for the buyer’s staff and will assure the technical support to the required extent.

The agreement with IDC shall enter into force 15 days after the date of sending by the Ministry of Finance of the Republic of Poland to the Ministry of Finance of the Republic of Zambia of the approval of the Agreement between the Government of the Republic of Poland and the Government of the Republic of Zambia on extending a tied aid credit, which will be signed in 2017.

All payments for goods being subject of the agreement will be effected in accordance with the above-mentioned intergovernmental agreement and the terms of the banking arrangements to be entered into between Bank Gospodarstwa Krajowego (BGK) and the Ministry of Finance of the Republic of Zambia or its authorized representative.

The first payment under the Agreement will be made as an advance payment before starting deliveries in the amount of 40% of the contract value, i.e. 40.000.000 USD. Another 58% of the total value in the amount of 58.000.000 USD will be paid to the Issuer after submission of the appropriate transport documents for subsequent deliveries of the goods, while the remaining 2% of the price in the amount of 2.000.000 USD will be paid after signing by the buyer of the acceptance protocols for the received goods. 

The agreement with IDC is concluded for define period 3 years from the date of its entrance into force and it shall remain valid until the full performance of its provisions.

The Company will start execution of the agreement immediately after receiving an advance payment in the amount of 40% of its total value. Completion of the project is scheduled within a year from the moment of beginning of its implementation.

The Agreement does not contain provisions concerning contractual penalties.

Any disputes arising out of or in connection with the agreement shall be settled by International Chamber of Commerce - International Court of Arbitration in Paris. The agreement shall be interpreted and enforced in accordance with the laws of England.

Other provisions of the concluded agreement do not differ from the terms commonly used in this kind of agreements.

The agreement is considered material due to the fact that its total amount exceeds 10% of the Issuer’s equity.

The newly signed agreement with the company Industrial Development Corporation is another significant contract of URSUS in Africa, after the Company’s activities executed recently in Ethiopia and Tanzania. The long-term experience of the Company in presence on several African markets, well-known and reliable technology combined with recognition of the URSUS brand caused that the company IDC decided to cooperate with the Issuer. The common undertakings of URSUS S.A. and IDC are included in implementation of the project of agricultural sector development on Zambia, through accelerating mechanization of the Zambian agriculture.


 

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