MCI Venture Projects Spółka z ograniczoną

Transcription

MCI Venture Projects
Spółka z ograniczoną odpowiedzialnością VI spółka komandytowo – akcyjna
Prospectus
Floating Rate Bonds
bearing an interest of 6-month PRIBOR plus 3.8 per cent.
up to CZK 351,000,000
due 2021
This document constitutes the prospectus (the Prospectus) which applies to bonds up to the aggregate principal amount
of CZK 351,000,000 (in words: three hundred and fifty one million Czech crowns) (the Bonds or the Issue) issued by
MCI Venture Projects Spółka z ograniczoną odpowiedzialnością VI spółka komandytowo – akcyjna, a limited
joint-stock partnership incorporated under the laws of Poland, with its registered office in Warsaw (00-113) at ul. Emilii
Plater 53, Poland, entered in the Register of Business Entities kept by the District Court for the Capital City of Warsaw
in Warsaw, XII Commercial Division of the National Court Register under the number KRS 0000485654 (the Issuer or
MCI Venture or the Company). The Bonds will bear floating interest rate payable semi-annually on 8 April and 8
October each year until the maturity date. The Issue Date of the Bonds is 8 April 2016. The Bonds will mature on 8
April 2021. The ISIN of the Bonds assigned by the Central Depository (in Czech: Centrální depozitář cenných papírů,
a.s.) is CZ0000000708.
Liabilities under the Bonds will be unconditionally and irrevocably secured by a guarantee (the Guarantee) issued by
MCI Capital S.A., a joint-stock company incorporated under the laws of Poland, with its registered office in Warsaw
(00-113) at ul. Emilii Plater 53, Poland, entered in the Register of Business Entities kept by the District Court for the
Capital City of Warsaw in Warsaw, XII Commercial Division of the National Court Register under the number KRS
0000004542 (the Guarantor) in favour of each Bondholder (as defined in the Prospectus), and by a pledge over shares
in ABC Data S.A., a joint-stock company incorporated under the laws of Poland, with its registered office in Warsaw
(03-230), ul. Daniszewska 14, Poland (ABC Data), held by the Issuer, and over shares in company Indeks Bilgisayar
Sistemleri Mühendislik Sanayi ve Ticaret A.Ş., a joint-stock company incorporated under the laws of Turkey, with its
registered office at Merkez Mah. Erseven Sok. No: 8, 34406 Kağıthane / Istanbul, Turkey (Indeks), held by company
Alfanor 13131 AS, a private limited liability company incorporated under the laws of Norway, with its registered office
at c/o Intertrust (Norway) AS, Bryggegata 6, 0250 Oslo, Norway (the Security Provider). The Security (as defined in
the Prospectus) will be created in favour of the Security Agent (as defined in the Prospectus) under the concept of the
parallel debt as specified in Clause 4.4 of the Terms and Conditions (as defined in the Prospectus).
If needed, the Issuer will update this Prospectus in the form of supplements. Each such supplement will be approved
by the Czech National Bank (the CNB) and published in a way that the Issue becomes listed on the regulated market on
the basis of an up-to-date security prospectus if such application is made. For the purpose of listing the Bonds on the
regulated market, this Prospectus will be valid for twelve (12) months from the date of its approval by the CNB. The
Issuer does not intend to make any public offering of the Bonds under applicable legislation, nor does it intend to
entrust any third person with public offering of the Bonds.
An application has been made for the Bonds to be admitted to listing on the regulated market (in Czech: Regulovaný
trh) of Burza cenných papírů Praha, a.s. (the Prague Stock Exchange or the PSE). The Bonds are expected to be
admitted to trading on the PSE on or around the Issue Date.
The Prospectus, which includes the wording of the Terms and Conditions (as defined in the Prospectus), has been
approved by the CNB's decision on 1 April 2016, ref. no. 2016/039090/CNB/570, file no. S-Sp-2016/00009/CNB/572,
which became final and effective on 2 April 2016. This Prospectus was made on 24 March 2016.
This Prospectus does not constitute any public or any other offer to purchase any Bonds. The persons interested in the
purchase of any Bonds should make their investment decision on the basis of information provided not only in this
Prospectus, but also in its supplements (if any).
The distribution of this Prospectus, as well as any offers, sale or purchase of the Bonds, are restricted by law in some
jurisdictions. The Bonds were not permitted or approved by any administrative or other authority in any jurisdiction
with the exception of the CNB.
Lead Manager
Česká spořitelna, a.s.
THIS PAGE WAS INTENTIONALLY LEFT BLANK
IMPORTANT NOTICE
This Prospectus represents a prospectus of the Bonds within the meaning of Article 5 of Directive
2003/71/EC of the European Parliament and of the Council, as amended (the Prospectus Directive) and
Section 36 of Act No. 256/2004 Coll., the Capital Market Act, as amended (the CMA).
The distribution of this Prospectus, as well as any offers, sale or purchase of the Bonds, are restricted by law
in some jurisdictions. Neither the Bonds nor the Prospectus related thereto will be at the instance of the
Issuer listed, registered, permitted, recognized or approved by any administrative or other authority in any
jurisdiction with the exception of the CNB. All persons in possession of this Prospectus will be responsible
for observing any restrictions relating to offers, purchase and sale of the Bonds and the possession and
distribution of any documents relating to the Bonds in all relevant jurisdictions.
The Issuer would like to draw the attention of potential investors to the fact that the Bonds have not been and
will not be registered under the U.S. 1933 Securities Act, as amended (the U.S. Securities Act) or by any
securities commission or any other authority of any State of the United States and therefore will not be
offered, sold or transferred within the United States or to U.S. residents (as defined in
Regulation S implementing the U.S. Securities Act) except pursuant to an exemption from the registration
duty under the U.S. Securities Act or in transactions not subjected to registration under the U.S. Securities
Act.
In relation to each Member State of the European Economic Area which has implemented the Prospectus
Directive (each a Relevant Member State), the Lead Manager has represented and agreed that with effect
from and including the date on which the Prospectus Directive is implemented in that Relevant Member
State (the Relevant Implementation Date) it has not made and will not make an offer of Bonds which are the
subject of the offering contemplated by this Prospectus to the public in that Relevant Member State except
that it may, with effect from and including the Relevant Implementation Date, make an offer of such Bonds
to the public in that Relevant Member State:
(a)
following the date of publication of a prospectus in relation to such Bonds which has been approved
by the competent authority in that Relevant Member State or, where appropriate, approved
in another Relevant Member State and notified to the competent authority in that Relevant Member
State in accordance with the Prospectus Directive, in the period beginning and ending on the dates
specified in such prospectus and the Issuer has consented in writing to its use for the purpose of that
offer;
(b)
at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(c)
at any time to fewer than 150 natural or legal persons (other than qualified investors as defined
in the Prospectus Directive), subject to obtaining the prior consent of the Lead Manager; or
(d)
at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Bonds referred to in (b) to (d) above above shall require the Issuer or the Lead
Manager to publish a prospectus pursuant to Article 3 of the Prospectus Directive, or supplement
a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an offer of Bonds to the public in relation to any Bonds
in any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the Bonds to be offered so as to enable an investor to decide
to purchase or subscribe the Bonds, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State, the expression Prospectus Directive means
Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant
implementing measure in the Relevant Member State.
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The Issuer further wishes to point out that the Bonds will not be offered or sold in the United Kingdom of
Great Britain and Northern Ireland (the United Kingdom) by way of distributing any documents or notices
except for offers to persons authorised to trade with securities on their own or on someone else's account in
the United Kingdom or under such circumstances that do not constitute a public offer of securities under the
1985 Companies Act, as amended. All legal acts pertaining to the Bonds made in the United Kingdom, from
the United Kingdom or otherwise associated with the United Kingdom in any manner whatsoever will also
be performed in compliance with the 2000 (FSMA 2000) legislation governing financial services, including
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order), and with the
Prospectus Regulations 2005, as amended. In particular, this Prospectus may only be distributed to, and is
directed at (a) persons who have professional experience in matters relating to investments falling within
article 19(1) of the Order or (b) high net worth entities falling within article 49(1) of the Order (all such
persons together being referred to as relevant persons). Any person who is not a relevant person should not
act or rely on this document or any of its contents.
The persons interested in the purchase of any Bonds should make their investment decision on the basis
of information provided in this Prospectus, including its supplements, and in conjunction with all documents
which are deemed to be incorporated herein by reference (see the "Information Incorporated by Reference").
This Prospectus should be read and construed on the basis that such documents are incorporated and form
part of the Prospectus. In case of any discrepancy between the information provided in this Prospectus and
its supplements, the last-published information will be valid.
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer or the Lead
Manager to subscribe for or purchase, any Bonds.
No person has been authorised in connection with the offering of the Bonds to give any information or make
any representation regarding the Issuer, the Guarantor, the Security Provider, the Lead Manager or the
Bonds other than as contained in this Prospectus. Any such representation or information must not be relied
upon as having been authorised by the Issuer or the Lead Manager. The delivery of this Prospectus at any
time after its drafting should not mean that the information contained therein is correct at any time after the
publication of the Prospectus. Moreover, the information included in this Prospectus may be further
modified or supplemented by the specific supplements to the Prospectus.
None of the Issuer or the Lead Manager or any of their respective representatives is making any
representation to any offeree or purchaser of the Bonds regarding the legality of any investment by such
offeree or purchaser under appropriate legal investment or similar laws. Each investor should consult with
his own advisors as to the legal, tax, business, financial and related aspects of a purchase of the Bonds. The
Lead Manager has not independently verified the information contained in this Prospectus. Accordingly, no
representation, warranty or undertaking, express or implied, is made and no responsibility or liability is
accepted by the Lead Manager as to the accuracy or completeness of the information contained or
incorporated in this Prospectus or any other information provided by the Issuer, the Guarantor or the
Security Provider in connection with the offering of the Bonds. The Lead Manager does not accept any
liability in relation to the information contained or incorporated by reference in this Prospectus or any other
information provided by the Issuer, the Guarantor or the Security Provider in connection with the offering of
the Bonds or their distribution. The Lead Manager expressly does not undertake to review the financial
condition or affairs of the Issuer, the Guarantor or the Security Provider during the life of the Bonds or to
advise any investor in the Bonds of any information coming to their attention.
The information included in chapters "Taxation" and "Enforcement of Civil Liabilities against the Issuer,
the Guarantor and the Security Provider" is provided as general information only (is not intended to be
comprehensive) that is based on the state as of the date of this Prospectus, and that was obtained from public
sources, which have not been processed or independently verified by the Issuer. Besides, the information
contained in these chapters cannot be considered an indicator of future trends due to the significant
political, economic and other structural changes in Poland in the recent years. All potential purchasers of
any Bonds should rely exclusively on their own analyses of the factors stated in those chapters and upon the
opinion of their own legal, tax and other professional advisors.
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Any assumptions and projections concerning the future development of the Issuer, the Guarantor or the
Security Provider, their financial or market positions and the scope of their business, should not be deemed
as representations or binding promises of the Issuer, the Guarantor or the Security Provider regarding any
future events or outcomes, because such future events and outcomes are subject, entirely or in part,
to circumstances and events beyond the Issuer's, the Guarantor's or the Security Provider's control. Potential
investors should make their own analyses of any development trends or projections contained in this
Prospectus, and if relevant, conducts further independent investigations, and base their investment decisions
on the results of such investigations and analyses.
The Issuer, the Guarantor and the Security Provider will publish their economic and financial reports within
the scope and in accordance with the generally binding legislation and regulations governing the individual
official securities markets on which the Bonds are to be listed and will observe their reporting duties.
The Prospectus, all annual reports of the Issuer, the Guarantor and the Security Provider, copies of any
audit reports concerning the Issuer and the Guarantor, as well as any documents incorporated in this
Prospectus by reference, will be available for inspection, free of charge, to all interested persons on business
days during regular office hours from 9 a.m. to 4 p.m. at the Issuer 's registered office and at the Specified
Office of the Fiscal and Paying Agent. Documents regarding the Issuer and the Guarantor will be also
available in electronic form on the Issuer's website: http://www.privateequitymanagers.pl by selecting the
following sections: “FUNDS MANAGED”-”MCI.EUROVENTURES 1.0”-“MCI Venture Projects Sp. z o.o.
VI S.K.A.” and documents regarding the Guarantor on the Guarantor's website: http://www.mci.pl/en/ by
selecting the section “INVESTOR RELATIONS”.
Certain values contained in this Prospectus have been rounded. Accordingly, there may be slight differences
between certain values relating to a single information item appearing in several tables of this Prospectus
and certain values presented as sums in some tables may not be the arithmetic sum of the counted numbers.
The Issuer and the Lead Manager do not intend to make any public offering of the Bonds in the Czech
Republic or abroad. The Issuer and the Lead Manager and their authorised persons will offer the Bonds for
subscription and purchase in the Czech Republic exclusively to professional customers (within the meaning
of Section 2a(1) of the CMA) or outside of the Czech Republic in accordance with applicable laws. The
nominal value of a Bond exceeds an equivalent of EUR 100,000. The Issuer has not authorised and does not
intend to authorise the Lead Manager or other persons to conduct a public offering of the Bonds and
requests all investors in possession of the Bonds not to make any public offering of the Bonds within the
meaning of applicable laws and to observe all statutory restrictions concerning the Bonds offer in the Czech
Republic and abroad. This Prospectus does not include a prospectus summary within the meaning of the
Prospectus Directive in accordance with Section 36(2) of the CMA.
The primary offering of the Bonds will not be made through an automated trading system of the PSE
(XETRA® Prague).
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TABLE OF CONTENTS
Risk Factors .............................................................................................................................. 11
1.
Risk Factors Related to the Business of the Issuer .............................................................................. 11
2.
Risk Factors Related to the Guarantor and the Guarantor's Group .................................................... 14
3.
Risk Factors Related to the Security Provider ..................................................................................... 19
4.
Risk factors related to Indeks .............................................................................................................. 21
6.
Risk Factors Related to Poland and Czech Republic ............................................................................ 29
7.
Risk Factors Related to the Bonds ....................................................................................................... 29
8.
Risk Factors related to the Guarantee................................................................................................. 35
Responsible Persons ................................................................................................................ 37
Information Incorporated by Reference .................................................................................... 39
Terms and Conditions of the Bonds .......................................................................................... 42
Annex to the Terms and Conditions – the Financial Guarantee.................................................. 70
1.
FINANCIAL GUARANTEE DECLARATION .............................................................................................. 70
2.
TERMS OF THE FINANCIAL GUARANTEE DECLARATION...................................................................... 71
3.
SUBORDINATION OF SUBROGATION CLAIM ....................................................................................... 72
4.
ISSUE TERMS........................................................................................................................................ 72
5.
PAYMENTS ........................................................................................................................................... 72
6.
REPRESENTATION TO HOLDERS OF THE BONDS ................................................................................. 72
7.
FINAL PROVISIONS............................................................................................................................... 73
Description of the Security ....................................................................................................... 74
1.
Initial Polish Pledge.............................................................................................................................. 74
2.
Initial Turkish Pledge ........................................................................................................................... 76
Interest of Persons Involved in Issuance and Offering of Bonds ................................................. 80
Use of Proceeds ....................................................................................................................... 81
Information about the Issuer .................................................................................................... 82
1.
General information about the Issuer ................................................................................................. 82
2.
Incorporation and History of the Issuer .............................................................................................. 82
3.
Responsible Auditors ........................................................................................................................... 83
4.
Risk Factors .......................................................................................................................................... 83
5.
Recent Events Related to Issuer's Solvency ........................................................................................ 83
6.
Business Overview ............................................................................................................................... 84
7.
Simplified Organisational Structure as of 29 February 2016 .............................................................. 85
7
8.
Trend Information ............................................................................................................................... 86
9.
Profit Forecasts or Estimates ............................................................................................................... 87
10.
Administrative, Management, and Supervisory Bodies .................................................................. 87
11.
The Sole Shareholder....................................................................................................................... 89
12.
Financial Information Concerning the Issuer's Assets and Liabilities, Financial Position and Profits
and Losses ................................................................................................................................................... 90
13.
Additional Information .................................................................................................................... 92
14.
Material Contracts ........................................................................................................................... 93
15.
Third Party Information and Statement by Experts and Declarations of any Interest .................... 95
16.
Documents on Display ..................................................................................................................... 96
Information about the Guarantor ............................................................................................. 97
1.
General information about the Guarantor.......................................................................................... 97
2.
Incorporation and History of the Guarantor ....................................................................................... 97
3.
Responsible Auditors ......................................................................................................................... 101
4.
Risk Factors ........................................................................................................................................ 101
5.
Recent Events Related to Guarantor's Solvency ............................................................................... 102
6.
Business Overview ............................................................................................................................. 102
7.
Organisational Structure ................................................................................................................... 103
8.
Trend Information ............................................................................................................................. 103
9.
Profit Forecasts or Estimates ............................................................................................................. 103
10.
Administrative, Management and Supervisory Bodies ................................................................. 104
11.
Major Shareholders ....................................................................................................................... 108
12.
Financial Information Concerning the Guarantor's Assets and Liabilities, Financial Position and
Profits and Losses ...................................................................................................................................... 109
13.
Additional Information .................................................................................................................. 113
14.
Material Contracts ......................................................................................................................... 115
15.
Third Party Information and Statement by Experts and Declarations of Any Interest ................. 128
16.
Documents on Display ................................................................................................................... 129
Information about the Security Provider ................................................................................ 130
1.
General Information about the Security Provider............................................................................. 130
2.
Incorporation and History of the Security Provider .......................................................................... 130
3.
4.
Risk Factors ........................................................................................................................................ 131
5.
Recent Events Related to Security Provider's Solvency .................................................................... 131
6.
7.
8.
8
9.
10.
Administrative, Management and Supervisory Bodies ................................................................. 132
11.
Major Shareholder......................................................................................................................... 133
12.
Financial Information Concerning the Security Provider's Assets and Liabilities, Financial Position
and Profits and Losses ............................................................................................................................... 133
13.
14.
15.
Third Party Information and Statement by Experts And Declarations of Any Interest ................. 136
16.
Information about Indeks ....................................................................................................... 138
1.
General information about Indeks .................................................................................................... 138
2.
Incorporation and History of the Indeks ........................................................................................... 138
3.
4.
Risk Factors ........................................................................................................................................ 143
5.
Recent Events Related to Indeks Solvency ........................................................................................ 143
6.
7.
8.
9.
10.
Administrative, Management, and Supervisory Bodies ................................................................ 146
11.
The Major Shareholder.................................................................................................................. 149
12.
Financial Information Concerning the Indeks Assets and Liabilities, Financial Position and Profits
and Losses ................................................................................................................................................. 150
13.
14.
15.
Third Party Information and Statement by Experts and Declarations of any Interest .................. 152
16.
Taxation................................................................................................................................. 154
1.
Taxation in Poland ............................................................................................................................. 154
2.
Taxation in the Czech Republic.......................................................................................................... 158
Enforcement of Civil Liabilities Against the Issuer, the Guarantor and the Security Provider .... 160
1.
Enforcement Against the Issuer (in Poland) ...................................................................................... 160
2.
Enforcement Against the Issuer as a Security Provider (in Poland) .................................................. 163
3.
Enforcement against the Guarantor (in Poland) ............................................................................... 166
4.
Enforcement Against Alfanor as the Security Provider ..................................................................... 166
Subscription and Sale ............................................................................................................. 169
Certain Definitions ................................................................................................................. 172
9
General Information............................................................................................................... 177
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RISK FACTORS
Potential investors in the Bonds should familiarise themselves with this Prospectus as a whole. The Issuer
believes that the following factors may affect its, the Guarantor's and the Security Provider's ability to fulfil
their obligations under the Bonds. In addition, factors which are material for the purpose of assessing the
market risks associated with the Bonds are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the
Bonds, but its inability to pay interest, principal or other amounts on or in connection with the Bonds may
occur for other reasons. The risks and uncertainties the Issuer describes below are not the only ones the
Issuer, the Guarantor or the Security Provider may face. Additional risks not currently known to the Issuer
or that the Issuer now deems immaterial may also harm the Issuer, the Guarantor or the Security Provider
and affect their businesses, results of operations, financial condition and your investment. Prospective
investors should also read the detailed information set out elsewhere in this Prospectus and in the terms of
the Bonds offer and reach their own conclusions prior to making any investment decision.
The order in which the following risk factors are presented is not an indication of the likelihood of their
occurrence.
1.
Risk Factors Related to the Business of the Issuer
The Issuer is exposed to risks from a newly established company
The Issuer was established in November 2013 as a special purpose vehicle, mainly to hold shares in other
companies and businesses. The Issuer has made a significant investment in the listed Polish company ABC
Data. The Issuer's financial data disclosed in this Prospectus thus only has limited informative value for
assessing the Issuer's capability to fulfil its obligations under the Bonds.
Risk associated with losing key management personnel
Key personnel of the Issuer, i.e. members of management and especially senior management of the General
Partner, assist in the creation and implementation of the key strategies of the Issuer. Their activity is crucial
for the overall management of the Issuer as well as their ability to introduce and implement these strategies.
The Issuer cannot guarantee its ability to keep and motivate the key personnel. A potential loss of members
of its key personnel could adversely affect the Issuer's business, its economic results and financial situation.
Risk connected with changes in tax law
The Polish tax system is characterized by frequent changes of regulations. Some of these regulations are
ambiguous and often a coherent and unified interpretation or tax bodies' practice is missing. Due to different
interpretation of tax law, the risk related to tax law in Poland is higher than in some other legal systems.
The Issuer may not guarantee that tax bodies will apply different interpretation of tax provisions, which
would be unfavorable for companies from the Issuer's Group. Furthermore, the Minister of Finance may,
ex officio, change the previously issued general or individual tax rulings. Moreover, tax settlements
in Poland may be subject to inspection for a period of five years. Consequently, the amounts shown
in financial statements may be changed at a later date, after the final determination of their value by the
competent authorities.
The attractiveness of investments undertaken by the Issuer's Group sometimes depends on tax privileges.
The current income tax regulations generally permit deferred taxation of accumulated profits from certain
products offered by investment fund companies, or their full exemption from such taxation. Any legislative
changes resulting in the abolishment or limitation of these tax privileges may contribute to limitation, in full
or in part, the benefits attributed to investments by members of the Issuer's Group.
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The above factors may have a material adverse impact on the prospects of growth, results and financial
standing of the Issuer and members of the Issuer's Group. The above may, in consequence, affect the Issuer's
ability to meet its liabilities under the Bonds.
Risk of insufficient refinancing opportunities
The total nominal value of the Bonds is considerably high and as the redemption of the Bonds is based on a
repayment structure with a single payment on the Final Redemption Date, the Issuer is exposed to liquidity
and the refinancing risks. The Issuer may face a liquidity risk if it is unable to fulfill its liabilities under the
Bonds. The Issuer may not be in the position to mitigate the liquidity risk by obtaining a suitable refinancing
of the debt under the Bonds. The Issuer's ability to fulfill its obligations to redeem the Bonds under the
Terms and Conditions may depend on the Issuer's ability to obtain a suitable refinancing, through debt
instruments, credit facilities, loan or otherwise, of the debt under the Bonds.
Risk associated with the Issuer's current financial situation
The special purpose financial statements of the Issuer for the period from 1 January 2014 to 31 December
2014 show a cumulative loss of PLN 42,511,614. The loss exceeded the sum of the Issuer's supplementary
and reserve capital and one-third of its share capital.
The Issuer concluded the agreement on sale of the ABC Data shares, including the Initial Polish Pledged
Shares, on 26 September 2014, 12 December 2014 and 23 December 2014. Under these agreements, the sale
price for the ABC Data shares was to be paid by the Issuer by 31 December 2015. On 29 December 2015 the
Issuer concluded additional agreements with the sellers of the ABC Data shares (ABCD Management sp. j.
and MCI Venture Projects sp. j., also owned by the Sub-fund MCI.EuroVentures 1.0.) on the basis of which
the settlement date was changed to 30 April 2016. As of the date of this Prospectus, the price for the Initial
Polish Pledged Shares under the abovementioned agreements has not been paid. On 25 January 2016 the
Issuer concluded annexes to the sale agreements with the sellers of ABC Data shares, on the basis of which
the sellers waived their right to withdraw from these agreements if the Issuer fails to pay the sale price before
the settlement date.
As the Issuer concluded the agreements on sale of ABC Data shares with companies ABCD Management sp.
j. and MCI Venture Projects sp. j., which are also owned by the Sub-fund MCI.EuroVentures 1.0., there is no
risk in respect of the settlement of the sale price of ABC Data shares as the transaction was concluded
between related parties, fully controlled by Sub-fund MCI.EuroVentures 1.0. and the sellers have no
intention to whithdraw from the sale agreements and request return of the ABC Data shares from the
Issuer.This has been confirmed by the annexes concluded on 25 January 2016.
If the Issuer fails to obtain sufficient funds or if it fails to obtain a loan from its group entities before the
settlement date on 30 April 2016, the Issuer will not be able to repay its liabilities, including its liabilities
under the Bonds.
The Issuer expects that the Bonds will be redeemed from the future dividends proceeds received from
current and future portfolio companies, as well as from the proceeds received by the Issuer from partial or
full sale of its investments.
The risk for the Issuer to be a going concern
The financial statements prepared by the Issuer for the purposes of this Prospectus for the period from 1
January 2014 to 31 December 2014 show a cumulative loss of PLN 42,511,614. The loss exceeded the sum
of the Issuer's supplementary and reserve capital and one-third of its share capital.
If the balance sheet prepared as at 31 October 2015 still presents cumulative loss exceeding the sum of
Issuer's supplementary and reserve capital and one-third of its share capital then, in accordance with Art. 397
of the Commercial Companies Code, the General Partner's Management Board will be obliged to
12
immediately convene the Issuer's General Meeting for the purpose of adoption of a resolution regarding
Issuer's further existence as a going concern.
On 14 December 2015 the General Partner's Management Board convened extraordinary Issuer's General
Meeting and adopted a resolution on the continued operation of the Issuer. Based on the analysis performed
it was decided that there are no obstacles or any other financial difficulties for the Issuer to conduct its
business activities in the unchanged scope.
As the majority of the Issuer's assets constitute ABC Data shares (the Issuer has liabilities from the
acquisition of shares (publicly listed on the Warsaw Stock Exchange) that generate negative net assets), there
is also a market risk that the Issuer is exposed to. The ABC Data share price may fluctuate depending on the
market situation, however, the main risk factor for the Issuer is lack of growth of the market price of ABC
Data, which may cause that the existing negative net assets to remain or even rise if the market price of ABC
Data shares goes down. However this risk is a natural consequence of the Issuer's business.
The above may have a negative impact on the Issuer's capability to fulfil its obligations under the Bonds.
Risk connected with the Issuer's possible bankruptcy or restructuring
Pursuant to the Polish Bankruptcy Law of 28 February 2003 (Journal of Laws 2015, item 233, as amended)
(the Polish Bankruptcy Law) and the Polish Restructuring Law of 15 May 2015 (Journal of Laws 2015,
item 978, as amended) (the Polish Restructuring Law), a debtor's insolvency is the basis for the
restructuring or declaration of bankruptcy. A debtor is insolvent if it does not pay its due and payable cash
liabilities.
The bankruptcy or restructuring petition may be filed with the court by the debtor or any of his creditors in
the case of occurrence of grounds for filing particular type of petition. As a consequence, the Issuer may be
declared bankrupt or liquidated, or the liabilities towards the Issuer may be restructured and the Bondholders
may find it difficult to pursue any Bond-related claims from the Issuer and, therefore, the risk that the
Bondholders will not recover their funds invested in the Bonds may not be excluded.
Risk connected with Issuer's possible liquidation
Pursuant to the Commercial Companies Code, the Issuer's dissolution may be caused by:
(a)
reasons set out in the Issuer's Articles of Association (however, as of the date of this Prospectus,
the Issuer's Articles of Association do not contain any);
(b)
resolution of the Issuer's General Meeting regarding the Issuer's dissolution;
(c)
declaration of the Issuer's bankruptcy;
(d)
death, declaration of bankruptcy or withdrawal of the Issuer's sole general partner, unless the Issuer's
Articles of Association provide otherwise; or
(e)
other reasons set out by law.
The Issuer's dissolution will follow its liquidation which, in principle, involves only the activities consisting
of closing the Issuer's current transactions, debt collection, fulfillment of liabilities and liquidation
of the Issuer's assets.
The Issuer may be dissolved, first of all, as a result of declaration of its bankruptcy referred to above.
If the Issuer is dissolved, there is a risk that the Bondholders will not recover their funds invested
in the Bonds.
13
Risk connected with concentration of assets
The main component of the Issuer's investment portfolio consists of the ABC Data shares listed on the
regulated market. Six million of ABC Data shares will represent the Security under the Initial Polish Pledge.
Therefore, the Issuer is primarily exposed to the risk connected with changes in the price of the ABC Data
shares on the regulated market. This risk also applies, if the Issuer decides to sell a material stake in ABC
Data and the price obtained is lower than the purchase price the Issuer has paid (or will pay) for the ABC
Data shares.
Deterioration of the Issuer's financial standing may have a negative impact on the Issuer's ability to meet
its Bond-related liabilities.
Moreover, it may turn out that, due to the lack of any other material assets in the Issuer's assets than the ABC
Data shares, the Bondholders may find it difficult to pursue any Bond-related claims from the Issuer.
However, as of the date of this Prospectus, the value of the ABC Data shares is significantly higher than the
total nominal value of the Bonds.
The abovementioned risk includes also the fact that indirectly, the Issuer is affected by the same risk factors
as ABC Data. The risks related to ABC Data are included in Chapter 5 below.
If any of the risks related to ABC Data materialises, it will affect ABC Data shares, including the value of
the Initial Polish Pledged Shares, and, ultimately, it will affect the Issuer.
2.
Risk Factors Related to the Guarantor and the Guarantor's Group
Risk connected with the Guarantor's possible bankruptcy or restructuring
Pursuant to the Polish Bankruptcy Law and the Polish Restructuring Law, debtor's insolvency is the basis for
the restructuring or declaration of bankruptcy. A debtor is insolvent if it does not pay its due and payable
cash liabilities. The bankruptcy or restructuring petition may be filed by the debtor or any of its creditors in
the case of occurrence of grounds for filing particular type of petition.
As a consequence, the Guarantor may be declared bankrupt or liquidated, or the liabilities towards the Issuer
may be restructured the Bondholders may find it difficult to pursue any Bond-related claims from the
Guarantor, and, therefore, the risk that the Bondholders will not recover their funds invested in the Bonds
may not be excluded.
Risk connected with the Guarantor's possible liquidation
Pursuant to the Commercial Companies Code, the Guarantor's dissolution may be caused by:
(a)
reasons set out in the Guarantor's Articles of Association (however, as of the date of this Prospectus,
the Guarantor's Articles of Association do not contain any);
(b)
resolution of the Guarantor's General Meeting regarding the Guarantor's dissolution or transfer of the
Guarantor's registered office abroad;
(c)
declaration of the Guarantor's bankruptcy; or
(d)
other reasons set out by law.
The Guarantor's dissolution will follow its liquidation which, in principle, involves only the activities
consisting of closing the Guarantor's current transactions, debt collection, fulfillment of obligations
and liquidation of the Guarantor's assets.
The Guarantor may be dissolved, first of all, as a result of declaration of its bankruptcy referred to above.
14
If the Guarantor is dissolved, there is a risk that the Bondholders will not recover their funds invested
in the Bonds.
Risk of the Issuer's failure to repay Bond-related liabilities
The Guarantor may not exclude the future occurrence of a situation where the Issuer is unable to meet its
liabilities related to the Bonds, in particular, to redeem them or to pay interest. In the case of such a situation,
the Bondholders may, on the specified terms, seek satisfaction of their Bond-related claims from the
Guarantee granted by the Guarantor.
If the Guarantor is also unable to meet its liabilities related to the Bonds, there is a risk that the Bondholders
will not recover their funds invested in the Bonds.
Venture capital risk
The essence of venture capital investments, as the main business of the investment funds the investment
certificates in which are held by the Guarantor's Group, is the possibility of obtaining higher rates of return
through investing in projects of higher risk level.
Prior to making a venture capital investment, a business plan needs to be thoroughly analysed.
This, however, does not always ensure that the development of the company into which the investment fund
invested (the Target Company) will go as planned. If the business model of the Target Company is not
successful, it can negatively affect the value of investment by incurring losses. As a result, this could
negatively affect the Target Company's profit and subsequently the value of investment certificates held
by the Guarantor and the Guarantor's Group in the investment fund.
Risk related to measurement of managed companies affecting the value of managed assets
Once a quarter the MCI Group measures the fair value of assets held in investment funds. The resulting
measurement value translates to the value of managed assets and the level of received remuneration.
Funds whose investment certificates are held by the MCI Group companies, invest their capital for 5 to 10
years. Companies which are not listed on the stock exchange receive financing in the form of pure equity,
debt and a mix of equity and debt. Liquidity of such investments is limited and the profit is realised through
disposal of the company's shares, usually to sector investors or financial investors. It is not certain if the
funds find buyers for their investments in the future and if they are able to achieve planned rates of return.
The risk of economic downturn and downturn on the stock exchange may additionally make it more difficult
to exit or may materially restrict the potential rate of return. As a result, this could negatively affect the MCI
Group's profit and loss.
Competition risk related to acquiring new investment projects
The MCI Group's development is closely linked to the possibilities of making new investments in promising
and technologically advanced economic projects by the investment funds the investment certificates in which
are held by the Guarantor's Group. The market has recently observed increased competition of other funds
(venture capital funds and private equity funds) and business angels interested in making investments in
companies in the new technologies sector. This risk has been addressed through geographical expansion to
new and perspective markets where the competition is smaller.
A material competitive advantage of the investment funds the investment certificates in which are held by
the Guarantor's Group is their recognition in Poland and abroad, which allows it to engage in new projects.
Risk related to the investments in investment certificates
15
The main part of assets of the Guarantor's Group are investment certificates issued by the Polish investment
funds established and managed by MCI TFI (which is an investment fund company established and existing
under Polish law).
Pursuant to Polish law, investment funds have legal personality. Assets contributed to an investment fund for
the investment certificates become a part of the investment fund's investment portfolio and are no longer a
part of an investment certificate-holder's property. The investment fund's investment portfolio is managed by
the investment fund company or another entity engaged by the investment fund company on the basis of a
portfolio management agreement. The investment certificate holders usually have no power to impact the
investment policy of investment funds, unless such right stems from the investment fund's statute or law
provisions.
The investment fund company is a body of the investment fund, authorised to manage the investment fund
and represent it in relations with third parties. The investment fund company operates on the basis of
relevant permission granted by the PFSA and is supervised by the PFSA to the extent set out principally by
the Act on Investment Funds.
Under Section 4(4) of the Act on Investment Funds, an investment fund is not a subsidiary of an investment
fund company which manages it (i.e. MCI TFI in this case) or of any entities holding, directly or indirectly,
the majority of voting rights in the investment fund's bodies (Guarantor or entities belonging to the
Guarantor's Group in this case).
Ultimately, neither the Guarantor and nor the Guarantor's Group have any impact on the operations of
investment funds whose investment certificates are owned by the Guarantor or the Guarantor's Group.
It may occur that the assets contributed to the investment funds by the Guarantor or the Guarantor's Group
will be managed in the manner which will be unprofitable to the Guarantor and the Guarantor's Group. There
may be also other events which may have a negative impact on the profitability of the investments in
investment certificates held by the Guarantor or Guarantor's Group, such as liquidation or dissolution of the
investment fund, transfer of the management of the investment fund or its investment portfolio to other
investment fund company, change of the investment fund's depositary or change of the investment policy
implemented by the investment fund.
The Guarantor's Group is also exposed to the typical risks connected with investments in investment
certificates of the Polish investment funds.
Risk related to the structure of investment funds portfolio
An important aspect of creating an investment portfolio of an investment fund is its appropriate
diversification, which aims at mitigating the investment risk. The rules of diversification of assets of a
particular investment fund stem from the Act on Investment Funds and its statute. It may occur that the
assets of investment funds whose investment certificates are owned by the Guarantor or the Guarantor's
Group are concentrated in a single market or sector, or in a single entity. In such case negative circumstances
in such market or sector or in given entity may ultimately have a negative impact on the value of investment
certificates owned by the Guarantor or the Guarantor''s Group and, as a consequence, on the MCI Group's
profit and loss.
The Guarantor and the Guarantor´s Group may have no impact on the realisation of the investment policy by
the investment funds the investment certificates in which are owned by the Guarantor or the Guarantor's
Group.
As of 31 December 2014, the investment portfolio of investment funds the investment certificates in which
are owned by the Guarantor's Group consisted in particular of shares of three companies, i.e. ABC Data,
Netia S.A. (indirectly through portfolio companies) and one non-public company. The proportion of the
value of the shares of these companies in the net assets value of a particular investment fund exceeded 20%.
16
As of 31 December 2014 investments in these companies represented 34.9%; 20.1% and 20.5% of assets of
investment funds the investment certificates in which are owned by the Guarantor's Group.
The majority of the current investment portfolio of the investment funds the investment certificates in which
are owned by the Guarantor's Group is concentrated in the innovative technologies sector. A downturn in this
industry sector may materially affect the number and scope of investment projects realised by the investment
funds, as well as their profitability, which in turn, may lead to material decrease of the Guarantor's profit.
Foreign exchange risk
Investment funds the investment certificates in which are owned by the Guarantor's Group also make
investments in other currencies than zloty. As of 31 December 2014 investments in currencies other than
zloty constituted 31.3% of investment portfolio of the investment funds the investment certificates in which
are held by the Guarantor's Group. As a result, currency fluctuations may negatively affect the reported
investment value if zloty appreciates against other currencies in which particular investments are
denominated. Fluctuations of investment currencies (due to lower income from sales of investments) may
decrease the value of investments in the Fund's assets and ultimately lead to a decrease of the Guarantor's
Group revenues from the investments in such investment funds.
Interest rate risk
The MCI Group companies use external financing facilities to finance their long term assets as well
as the working capital. Most of those financing facilities bear the floating interest rate and, therefore, depend
on the fluctuation of the base interest rates in the interbank market and the interest rate policies adopted
by the relevant central banks. The rapid and unexpected changes in interest rates might result in increase of
the financing costs and in consequence may negatively impact the MCI Group's profitability and financing of
its cash flows.
At the time of this Prospectus, the MCI Group did not protect itself against changes in interest rates.
Risk connected with changes in tax law
The Polish tax system is characterized by frequent changes of regulations. Some of these regulations are
ambiguous and often a coherent and unified interpretation or tax bodies' practice is missing. Due to different
interpretation of tax law, the risk related to tax law in Poland is higher than in some other legal systems.
The Guarantor may not guarantee that tax bodies will apply different interpretation of tax provisions, which
would be unfavorable for the companies from the Guarantor's Group or investment funds investment
certificates in which are owned by the Guarantor's Group. Furthermore, the Minister of Finance may, ex
officio, change the previously issued general or individual tax rulings. Moreover, tax settlements in Poland
may be subject to inspection for a period of five years. Consequently, the amounts shown in financial
statements may be changed at a later date after the final determination of their value by the competent
authorities.
The attractiveness of investments undertaken by the Guarantor's Group sometimes depends on tax privileges.
The current income tax regulations generally permit deferred taxation of accumulated profits from certain
products offered by investment fund companies (like investment certificates owned by the Guarantor's
Group), or their full exemption from such taxation. Any legislative changes resulting in the abolishment or
limitation of these tax privileges may contribute to limitation, in full or in part, of the benefits attributed to
investments by members of the Guarantor's Group.
The above factors may have a material negative impact on the prospects of growth, results, and financial
standing of the Guarantor and members of the Guarantor's Group. The above may, in consequence, affect the
Guarantor's ability to meet its Bond-related liabilities.
Risk of innovative technologies sector downturn
17
The majority of the current investment portfolio of the investment funds whose investment certificates are
owned by the Gurarantor or the Guarantor's Group, as well as their planned investments, is realised in the
sector of innovative technologies. A downturn in this industry sector may materially affect the number and
scope of investment projects realised by the investment funds whose investment certificates are owned by
the Gurarantor or the Guarantor's Group, as well as their profitability, which in turn, may lead to material
decrease of the Guarantor's profit.
Political risk
The political and economic situation in some countries where the assets of investment funds (investment
certificates in which are owned by the Guarantor's Group) are invested, or will be invested in the future, may
be unstable, which may affect portfolio companies and their value and, as a consequence, affect the value of
investment certificates held by MCI Group.
Liquidity risk
Due to the character of the transactions and of the financial assets the liquidity risk is small. The Guarantor
manages the liquidity risk through monitoring payment deadlines and funds demand for servicing payments
(ongoing transactions monitored on a weekly basis) and cash demand. Cash demand is compared against
available sources of financing (especially by evaluating the possibilities of obtaining financing in the form of
loans or bond issues) and its own available cash.
The liquidity management process is optimised through the centralised management of funds in the MCI
Group where excess of cash generated by individual companies from the MCI Group is invested
in borrowings and in other instruments issued by companies from the MCI Group. The surplus of the
Guarantor's cash is invested in current liquid financial instruments, e.g. bank deposits.
Credit risk
The Guarantor's credit risk is primarily related to bank deposits. The maximum amount put to credit risk
equals the carrying amounts of deposits. The Guarantor concludes bank deposit agreements with entities
of high creditworthiness and it deposits its cash for short periods.
MCI Group further uses external financing in the form of bank loans, bonds and leasing. The financing
arrangements are concluded for the specified time periods and are typically extended at maturity upon the
fulfilment of certain conditions by the MCI Group companies.
Deterioration in the financial performance (or breach of covenants in financing agreements) can lead to a
lack of extension of the financing facilities or in extreme cases a cancellation of the financing contracts,
which can result in exposing the MCI Group companies to the necessity of refinancing.
Termination of the financing facilities may also occur with the bank's decision to reduce or completely
withdraw from the exposure in particular markets where the MCI Group companies operate.
IT Risk
The MCI Group companies, in order to carry out day-to-day business, rely on information technology
supporting all major processes in the business. The MCI Group companies may thus encounter system
failures including, but not limited to, power losses, computer break-downs, computer viruses or security
breaches which may also be caused by third parties. Any failure of the information systems may result
in disruption of daily operations, which could have an adverse effect on the MCI Group's revenues and thus
the profitability and the ability to generate cash.
18
Dependence on cash-flow from the Subsidiaries
The main assets of the Guarantor's Group are investment certificates issued by the Polish investment funds
and many of the risk factors relate to the operations of such investment funds. The ability of the Guarantor to
meet its financial obligations related to the Bonds will depend on the financial results of the investment
funds and their ability to generate cash and make distributions.
Polish insolvency laws may provide investors with different protection than Czech insolvency laws
The Guarantor is incorporated under the laws of the Republic of Poland and its shares are listed
on the Warsaw Stock Exchange. The insolvency laws of the Republic of Poland are different from the laws
of the Czech Republic or other jurisdictions with which investors are familiar, including rules on
reorganisation, priority of creditors, ability to obtain post-petition interest and duration of the insolvency
proceedings, and, thus, may limit investors' ability to recover payments due on the Bonds to an extent
exceeding the limitations arising under other insolvency laws. In the event that the Guarantor or any
Subsidiary of the Guarantor experiences financial difficulty, it is not possible to predict with certainty the
outcome of such proceedings. This may adversely affect investors' ability to enforce their rights against the
Guarantor in Poland and limit any amounts that they may receive from the Bonds.
General risks related to future regulation
Since the Guarantor's core business activities consist of direct investment activity in private equity and
venture capital, it is subject to, among others, risk connected with changes in law, including tax law and
other regulations governing the Guarantor's core business activities. Future regulations and changes in
regulations and other legal requirements by the Polish Government or the European Union may require
significant changes in the Guarantor's business or otherwise affect it in ways that the Guarantor cannot
predict. Any new regulations that cause the Guarantor to restructure or otherwise change its business may
have a material adverse effect on its business prospects, operating results and financial standing.
3.
Risk Factors Related to the Security Provider
Risk connected with economic, political, and social situation and with the government's policy
The headquarters of Alfanor is in Norway, therefore, its results as well as financial standing
and development prospects are to a great extent exposed to changes in the economic, political, and legal
situation in Norway. The general macro-economic situation, particularly such factors as regulatory changes,
inflation, deflation, economic recession, local market disruption, social unrest, changes in disposable income
or gross national product, variations in interest rates and taxation policies, levels of economic growth and
other similar factors may have a direct influence on business results, financial standing and growth prospects
of the Issuer, the Guarantor, members of the Issuer's Group or of the Guarantor's Group.
Each government, also the Norwegian government, conducts the policy of influencing the economic growth
by applying such measures as: allocation of resources, fiscal policy, or preferential terms for selected sectors
of the economy or firms. Governments, in cooperation with other state administration bodies, are also
empowered to introduce new regulations, which have an impact on the economy, such as regulations
connected with money supply, interest rates, foreign exchange rates, taxes, inflation, budget deficit, foreign
debt, unemployment level or income structure of individuals, which may be material factors affecting
the economic situation in the segments in which Alfanor operates. The only business activity of Alfanor is
owning shares in other companies and businesses. Alfanor has made a significant investment in the listed
Turkish company Indeks in 2013.
Negative trends in the above factors may have a material negative impact on Alfanor's prospects of growth,
results, and financial standing of businesses operating in Norway, in particular, Alfanor.
19
There can be no assurance that any potential political or economic instability in Norway could not adversely
affect Alfanor's business, results of operations, financial standing, liquidity, capital base, prospects or
reputation.
Risk connected with terrorist attacks, pandemic, natural disasters, and other extraordinary events
Terrorist attacks, pandemics, natural disasters and other extraordinary events may cause material
disturbances in the global economy, increase the level of uncertainty on financial markets, additionally lower
the level of mutual trust and reduce the ability of market participants to settle liabilities or limit
the opportunities to acquire financing.
Each of the above factors may have a material negative impact on Alfanor's prospects of growth, results,
and financial standing.
The main investment of Alfanor – shares in Indeks – is denominated in TRY, a currency different than NOK.
Currency fluctuations may affect the reported investment value which will fall if NOK is appreciated against
TRY in which the investment is denominated.
Currency fluctuations may have a negative impact on Alfanor's financial results and financial standing.
Credit risk
Alfanor's credit risk is primarily related to bank deposits. The maximum amount put to credit risk equals
carrying amounts of deposits. Alfanor concludes bank deposit agreements with entities of high
creditworthiness and it deposits its cash for short periods.
Risk connected with tax law changes
The tax system is characterized by changes of regulations, which sometimes are ambiguous, and often
a coherent and unified interpretation or tax bodies' practice is missing. Changes in the Norwegian tax system
may have a negative impact on Alfanor's financial result.
Risk connected with the existence of Alfanor as a special purpose vehicle
Alfanor was established as a special purpose vehicle, mainly to hold shares in other companies and
businesses. Since the main component of Alfanor's investment portfolio is composed of the Indeks shares,
including the shares listed on the regulated market, Alfanor is exposed, first of all, to the risk connected with
changes in the prices of equity securities on the public market or stock exchange indexes, generated
by maintaining an open position in instruments sensitive to changes in these market parameters.
In addition, Indeks pursues a dividend policy attractive for Alfanor. A possible change in the Indeks
dividend policy may, therefore, have a material negative impact on Alfanor's financial results and
its financial standing.
Risk connected with the occurrence of events anticipated in the facility agreements concluded by Alfanor
In the case of occurrence of events anticipated in the provisions of the agreements concluded by Alfanor,
referred to in section 14 of the chapter "Information about the Security Provider", the outstanding
indebtedness under Alfanor's facility may become due and payable.
In accordance with the Amended and Restated Loan Agreement concluded between Sub-fund
MCI.EuroVentures 1.0. and Alfanor on 14 May 2015 and the loan agreement concluded between Sub-fund
MCI.EuroVentures 1.0. and Alfanor, if the following events occur:
20
(i)
Alfanor fails to pay any sum payable under given agreement or defaults in the performance
of any obligation under such agreement, and (if such default is, in the opinion of Sub-fund
MCI.EuroVentures 1.0., capable of remedy) such default is not remedied within seven days
after Sub-fund MCI.EuroVentures 1.0. notified Alfanor of such default; or
(ii)
Alfanor fails to immediately communicate any internal disposition which may affect
Alfanor's capital situation;
Sub-fund MCI.EuroVentures 1.0. shall be entitled to declare that any outstanding indebtedness under the
facility (under given agreement) has become due and payable, whereupon the same shall, immediately or in
accordance with such notice, become due and payable, unless Sub-fund MCI.EuroVentures 1.0. agrees
otherwise.
In view of the value of funds which Alfanor may be required to repay in the above situations, the need
to repay them may result in insolvency and, consequently, in Alfanor's bankruptcy or liquidation.
In such a situation, the Bondholders' seeking satisfaction of the Bond-related claims from the Initial Turkish
Pledge may be difficult, and, therefore, the risk that the Bondholders will not recover their funds invested
in the Bonds, in full or even in part, may not be excluded.
Risk connected with Alfanor's possible bankruptcy and liquidation
There is a risk that, in specific cases, Alfanor may go bankrupt and, consequently, be liquidated.
In such a situation, the Security Agent seeking satisfaction of the Bond-related claims from the Initial
Turkish Pledge should be able to seek full satisfaction provided that the value of the pledged shares is
sufficient to cover the claim. However, the insolvency administrator of Alfanor would have a statutory lien
over the assets of Alfanor upwards limited to five per cent. of the value of each asset and if the insolvency
estate of Alfanor does not have sufficient funds to cover the insolvency administrator's necessary costs, there
is a risk that up to five per cent. of the value of the pledged shares may be deducted to cover such costs.
4.
Risk factors related to Indeks
The information included in this chapter of the Prospectus is presented as general information. This chapter
was prepared exclusively on the basis of Indeks consolidated financial statement and operation report for the
year ended 31 December 2014. Alfanor, as the minority shareholder of Indeks, has no access to the
documents or information regarding Indeks, other than publicly available. The Issuer has not examined the
abovementioned documents in the light of their genuineness, accuracy or completeness.
Risk related to incomplete information on Indeks
The Issuer is not a person controlling Indeks, as a result of which the Issuer may not have all the relevant
information about Indeks for the preparation of this Prospectus. That is why there is a risk that the data on
Indeks set out in this Prospectus may be incomplete, which may result in investors not being provided with
the complete information for assessment of the financial and economic positions of Indeks. Nevertheless, the
Issuer is not aware of Indeks providing the Issuer with any incorrect or incomplete information for
preparation of this Prospectus.
Capital risk arising out of financial instruments
Indeks group, while trying to maintain the continuity of its activities in capital management on one hand,
aims to increase its profitability by using the balance between debts and resources on the other hand.
As indicated in Indeks consolidated financial statement for the year ended on 31 December 2014, the capital
structure of Indeks group consists of debts containing the credits, cash and cash equivalents and resource
21
items containing respectively issued capital, capital reserves, profit reserves and profits of previous years.
Risks, associated with each capital class, and the capital cost are evaluated by the senior management.
Risks associated with each capital class and the capital cost are evaluated by the senior management. It is
aimed that the capital structure will be stabilized by means of new borrowings or repaying the existing debts
as well as dividend payments and new share issuances based on the senior management evaluations.
Other risks arising out of financial instruments
Because of its operations, the Indeks group is exposed to financial risks related to exchange rates and interest
rates. Indeks group as it holds the financial instruments also to carry the risk of other party not meeting the
requirements of the agreement. Market risks seen at the level of Indeks group are measured according to the
sensitivity analysis principle.
As indicated in Indeks consolidated financial statement for the year ended on 31 December 2014, the market
risks seen at the level of Indeks group are measured according to the sensitivity analysis principle. Market
risks faced by Indeks in current period or the process of undertaking the faced risks or the process of the
measure of faced risks was not changed in the previous year.
Foreign currency risk management
Transactions in foreign currencies expose the Indeks group to foreign currency risk. This risk mainly arises
from fluctuation of foreign currency used in conversion of foreign assets and liabilities into Turkish lira.
Foreign currency risk arises as a result of trading transactions in the future and the difference between the
assets and liabilities recognized. Indeks is mainly exposed to foreign currency risk due to deposits,
receivables and payables.
Indeks operates in original currencies. If a product is purchased in USD currency, Indeks sells these products
in USD currency. There could be exception such sellling this product in TRY. At this level, Indeks finance
team does hedging.
Accounting books have to be kept in TRY legally in Turkey. This creates currency differences which are
non-cash financial items.
Credit risk management
According to the Indeks consolidated financial statements for the year ended on 31 December 2014, the
Indeks group credit risk management is exposed from the trade receivables. Trade receivables mostly consist
of receivables from dealers. Indeks group has set up an effective control system over its dealers and the risk
is monitored by credit risk management team and Indeks group management. Indeks group has set limits for
each dealer and these limits are revised if necessary. There is no significant trade receivable risk for Indeks
group, because the Indeks group has receivables from a wide range of customers instead of a small number
of customers and significant amounts.
Interest rate risk management
Important part of the Indeks group financial assets and liabilities with fixed rate are short-term.
Consequently the financial assets and liabilities with fixed interest rate are taken into consideration. There is
no interest rate risk if only financial assets and liabilities with floating rate are taken into consideration. TRY
loan interest rate is around 15% which is quite high. USD loan interest rate is around 3%. When customer,
especially large retails, demand extended long terms, Indeks group financial team is adding interest cost at
the top of prices.
22
Liquidity risk
Indeks group tries to manage the liquidity risk by maintaining the continuation of sufficient funds and loan
reserves by means of matching the financial instruments and terms liabilities by following the cash flows
regularly.
Short and long terms financial liabilities include Avea Iletisim Hizmetleri (Avea) guaranteed loan of
Datagate Bilgisayar Malzemeleri Ticaret AŞ. (Datagate). When considering, whole loan amount of Datagate
should be offsetted. This loan will decrease significantly in a year time.
5.
Risk factors related to ABC Data
The information included below was prepared exclusively on the basis of ABC Data's financial statements
for the year ended 31 December 2014 with auditor's opinion and management board's report of the activities
of ABC Data for the 2014 financial year. The Issuer has not examined such documents in the light of their
genuineness, accuracy or completeness.
Macro-economic environment influencing operations of the ABC Data and IT industry standing
The key factors to shape the ABC Data Group's operations in the reporting period and in the following year
are:
(i)
continuous increase in the IT market in the countries of the ABC Data Group's direct
presence, stimulated by economic growth and development of CE countries but slower than
in previous years;
(ii)
growing role of Polish enterprises in Central and Eastern Europe that stimulates exports;
(iii)
strong pricing competition in most IT product groups;
(iv)
growing market share of the largest IT distributors;
(v)
uncertain standing of markets where ABC Data Group operates due to possible negative
effects of events taking place in the Eurozone on the macro-economic standing of the region,
in particular of less developed countries.
Financial risk
The key financial instruments used by ABC Data include bank loans, cash and short-term deposits. The
major objective of the financial instruments is to secure financing of ABC Data's operations. ABC Data has
also other financial instruments, such as trade receivables and liabilities which result directly from its
operations.
ABC Data concludes spot and forward currency transactions aimed at the management of the currency risk
arising in the course of its operations and from the funding sources used.
ABC Data has not traded in financial instruments both at the date of preparation of the financial statement
and during the entire period included in the financial statements for the year ended 31 December 2014.
The key risks resulting from the financial instruments held by ABC Data include interest rate risk, liquidity
risk, currency risk, credit risk and commodity risk. ABC Data's management board verifies and arranges the
rules of risk management for each type of risk.
23
Interest rate risk
During 2014 ABC Data's liabilities included short-term bank loans and factoring facilities with interest rates
based mostly on monthly base rates for a given currency increased by bank's margin. Since intercompany
deliveries of purchases for Poland, Slovakia, Czech Republic, Lithuania, Hungary, Romania and Germany,
are centralized in ABC Data, ABC Data is the one to finance most operations. Purchases made by the
subsidiaries: Czech, Slovakian, Lithuanian, Hungarian, Romanian and German are funded through trade
liabilities to ABC Data.
A significant increase of market interest rates may adversely impact the financial performance of the ABC
Data. Risk mitigation and prevention measures involve continuous monitoring of the money market standing
and active managing of balance sheet items that impact working capital, although do not include financial
instruments hedging against forex rate risk.
ABC Data uses overdraft facilities denominated in PLN, RON (Romanian leu), CZK and EUR and nonrecourse factoring services denominated in PLN and CZK. Interest on facilities is based on a floating rate:
WIBOR (Warsaw Interbank Offer Rate), ROBOR (Romanian Interbank Offer Rate), PRIBOR (Prague
Interbank Offered Rate) and EURIBOR (Euro Interbank Offer Rate), respectively.
As of the date of publication of the ABC Data's financial statement for the year ended 31 December 2014,
ABC Data did not apply an active strategy of hedging against the interest rate risk.
Currency risk
ABC Data is exposed to the currency risk arising from concluded transactions. The risk arises from purchase
and sales transactions and loans taken in currencies other than its measurement currency. About 72% of costs
of acquiring goods and services is denominated in currencies other than the PLN, while only 60% of sales
transactions is concluded in foreign currencies. ABC Data has concluded transactions hedging from forex
risk in the form of financial instruments (mainly spot and forward contracts) in a manner corresponding to
the terms of the hedged item and therefore ensuring maximum effectiveness of the hedge. In its calculations
and hedging activities ABC Data monitors individual assets and liabilities (by currency) arising as a result of
operating activities.
Since 1 April 2010 ABC Data has applied hedge accounting involving the hedging of future cash flows. The
hedging of future cash flows minimizes the forex risk related to goods and services purchased for foreign
currencies and recorded by ABC Data in PLN at a historical exchange rate if the sales prices of the goods
and services for PLN are indexed to the current forex rate. In this case, receivables and liabilities in a given
foreign currency and derivatives constitute elements of the hedge.
ABC Data hedges currency risk related to sales indexed to EUR and USD exchange rates and denominated
in these currencies with foreign currency monetary items, i.e. trade liabilities reduced by trade receivables
and cash, and increased/reduced by the notional value of FX forwards and FX swaps regarding currency
sales/purchases. ABC Data designates certain foreign currency monetary items as hedging instruments under
the cash flow hedge model and recognizes them in line with the hedge accounting principles.
Price risk
Continuous reduction of product prices arising from their progressing technical obsolescence and launch of
new products is characteristic of the IT market. ABC Data purchases goods directly from IT hardware
manufacturers for further distribution. During pre-sale storage, prices of individual products may drop
following reductions introduced by manufacturers.
Price protection clauses included with most distribution contracts concluded by ABC Data with key supplies,
i.e. manufacturers of goods and market practice protect against the risk. They allow for obtaining a refund of
a portion of the cost of unsold goods if the sales price to ABC Data Group's clients decline. Manufacturer
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bearing full responsibility for price changes of goods held in distributor's warehouse is the standard
distribution market practice.
ABC Data does not store high volumes of goods purchased from distributors in order to avoid the risk of a
price drop. Such transactions are usually concluded based on specific orders of the ABC Data's buyers. ABC
Data strives to reduce the price risk by way of monitoring prices, immediate sales of products with increased
impairment risk and maintaining a high inventory turnover ratio.
Debt risk
During 2014 ABC Data used borrowings in the form of short-term bank loans, intercompany loans and
factoring facilities. ABC Data is the one charged with funding of the ABC Data Group's operations as it
operates the central warehouse supplying products for sale by distribution subsidiaries.
ABC Data uses services of six banks providing loans to fund the ABC Data's operations and five separate
factoring facilities for selected clients of ABC Data for the purpose of discounting receivables from these
clients on an ongoing basis.
Due to the commercial nature of the operations of the ABC Data and ABC Data Group, the amount of
funding closely depends on the level of sales and working capital management quality (turnover of
receivables, liabilities and inventory). Receivables, liabilities and inventory turnover is monitored on an
ongoing basis in order to limit the amount of borrowings, at the same time optimizing product availability
and attractiveness of trade credits offered to the Company's clients. Apart from planning the demand for
borrowings in its annual budget, ABC Data keeps monitoring its debt and cash flows to be able to undertake
relevant measures aimed at obtaining more funds necessary to ensure paying its trade liabilities within
contractual deadlines if necessary.
According to the management board of ABC Data, the current limits cover the potential demand for working
capital both in the ABC Data and ABC Data Group, and the risk that the banks that provide the funding will
be not willing to extend the funding agreements is limited.
Credit risk
Credit risk is defined as a risk of ABC Data's incurring a financial loss due to a counterparty's default in the
form of a failure to pay for goods or services within the extended payment deadline awarded by ABC Data.
Credit risk is related mostly to trade receivables and the use of deferred payment terms upon sale. ABC Data
has developed and implemented procedures aimed at minimizing and continuous monitoring of the risk in a
manner precluding occurrence of a significant credit risk concentration.
Clients with poor financial standing and those beginning their cooperation with ABC Data can buy for cash
or upon advance payment only. Each client applying for a trade credit is assessed for creditworthiness based
on financial documents provided by itself or reports ordered from business intelligence firms. ABC Data
insures its trade receivables; therefore, the credit limit determined individually based on an analysis of a
client's financial standing strongly depends on a decision regarding the amount insured of the client's trade
credit. Granting a client a credit in excess of the limit determined by the insurer requires acceptance in
accordance with internal credit procedures. Credit decisions are accepted only by the unit in charge of ABC
Data's credit risk (treasury department) or by ABC Data's management board. ABC Data regularly verifies
credit limits of its clients based on the current insurance of credit limits, history of payments, cooperation
scale, financial data and collateral held.
If a client has overdue liabilities to ABC Data, sales to this client are suspended until the debt is repaid. At
the same time, depending on the debt repayment process, the credit limit granted may be reduced or
withdrawn. ABC Data recognizes impairment losses on uninsured receivables and amounts arising from own
contribution in the amount insured based on a detailed analysis of receivable balances.
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The credit risk related to other financial assets of ABC Data, such as cash and cash equivalents and some
derivatives, results from the counterparty's payment default and the maximum exposure is equal to the
carrying amount of the instruments.
Liquidity risk
Liquidity risk is defined as a risk that ABC Data will be unable to pay its financial liabilities upon their
maturity.
ABC Data monitors projected operating cash flows on an ongoing basis, considering maturity of receivables
and liabilities. Liquidity is maintained with short-term credit and factoring facilities used by ABC Data. The
related demand is determined when preparing the budget for the subsequent year and modified depending on
the current financial standing of ABC Data. Since ABC Data efficiently manages its working capital and
counterparty's credit risk (insurance of receivables) at the same time maintaining good financial standing, the
liquidity risk is limited.
Risk related to macro-economic standing of Poland and other countries where ABC Data operates
Growth of the IT sector is closely correlated with the general economic standing of Poland and other
countries, in which ABC Data and ABC Data capital group carry out operations. Polish economy is sensitive
to the global economic situation, in particular to the EU standing. Possible economic slump may have
substantial adverse impact on the financial performance of ABC Data and the entire ABC Data Group. GDP
(gross domestic product) growth, IT expense level, pay level, investment in enterprises, inflation and foreign
exchange rates are the key factors influencing ABC Data's financial performance. There is a risk that a
slowdown in economic growth, reduced investment and public procurement level or an inflation increase
may negatively impact operations and financial standing of ABC Data, its performance and development
prospects.
Margin reduction risk
All markets inwhich ABC Data and the ABC Data Group operate are highly competitive. Growing
competition arising from new market entries, increasing saturation with IT products and aggressive pricing
may result in trade margin reductions. Margin control including all key factors that contribute to its amount,
active response to margin drops and substantial diversification of ABC Data's offer allow significant risk
mitigation.
A significant portion of products offered by the ABC Data come from foreign suppliers. Settlement of
foreign currency transactions concluded with suppliers and clients gives rise to the risk of revenue and
expense fluctuation caused by changes in forex rates, which may negatively affect the ABC Data's
performance.
The purchase structure of the ABC Data Group is generally centralized in ABC Data (in Warsaw). Then, the
goods are sold to local clients by subsidiaries located in the Czech Republic, Slovakia, Lithuania, Hungary
and Germany (which, except of Romania, do not have separate warehouses). Very few goods are purchased
directly by subsidiaries. Since deliveries from the head office to the subsidiaries are denominated in the
currency used by these companies when selling to their clients, their forex risk is very small, and the entire
risk management process lies with ABC Data (the parent).
ABC Data attempts to mitigate the negative effect of forex rate changes through pro-active forex risk
management. For this purpose, ABC Data applies solutions involving daily indexing prices of the offered
products in foreign currencies. Such a pricing policy allows, on the one hand, flexible adjustment of
domestic currency prices to the current exchange rates, and on the other hand, the use of inventory of goods
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expressed in foreign currencies as a natural hedge against the forex risk arising from foreign currency
liabilities.
The purpose of parent's currency position management is to maintain a balanced asset and liability position
in each currency including the inventory level. Spot, forward and currency swap transactions are the key
financial instruments used to hedge currency positions. In 2014 ABC Data Group did not use currency
options as forex risk hedges.
ABC Data has implemented hedge accounting involving hedging of the future cash flows from trading
operations with regard to the pricing system and the relevant forex risk policy, as well as in order to mitigate
financial effects of rapid forex rate changes and their impact on the ABC Data Group's performance. This
allows allocating forex differences to periods they actually pertain to, and thus limiting the risk of incidental
misstatement of financial profit/loss in a given period.
Business acquisition risk
Accelerating business growth by acquiring other entities is an important element of the strategy adopted by
ABC Data Group. ABC Data may be forced to withdraw from investing in certain entities it has been
negotiating with since potential targets, formerly evaluated as attractive, will generate too much risk or the
transaction price expected by their owners will render them unviable. Also, if transactions are concluded,
future financial performance of acquires and the presumed synergy effect may be lower than planned.
Supplier risk
ABC Data's operations are based on cooperation with key IT hardware suppliers. According to the ABC
Data's management board, there are no suppliers so important that disruption in cooperation with them
would have a material negative impact on the sales performance of ABC Data. A broad portfolio of products
allows efficient management of relationships with suppliers and offering clients with alternative solutions if
temporary shortages or price fluctuations occur.
IT and telecom system risk
Due to its operational specifics, ABC Data's efficiency closely depends on data flow and processing speed.
Therefore, continuous improvement and uninterrupted operation of IT tools supporting communication and
management is crucial. ABC Data has systematically extended and improved its IT infrastructure supporting
business management processes. Despite being modern and efficient, the risk of IT system breakdown
cannot be excluded, nor can be a future threat of its reduced efficiency due to growing scale of operations or
other factors, including those beyond the ABC Data's control. Any reduction in efficiency of the IT
infrastructure used by ABC Data may have an adverse effect on business management, development strategy
implementation and financial performance. ABC Data has monitored efficiency of its IT solutions on an
ongoing basis, improved and extended it to match the ABC Data's growth. Additionally, the ABC Data
Group has a team of IT specialists able to promptly repair potential breakdowns. The ABC Data Group has
implemented a system ensuring data control and recovery in crisis situations.
Risk related to loss of key employees
Operations of ABC Data and its development perspectives depend on knowledge, experience and
qualifications of ABC Data's management board members and other key managers. Strong demand for IT
specialists and competitors' activities may result in key personnel leaving the company and slow down the
recruitment of new hires with relevant background and skills. There is a risk that the losing of key employees
will negatively impact the operations and financial standing of ABC Data, its financial performance and
growth perspectives. However, the employee turnover in the ABC Data capital group is small. Further, ABC
Data has been monitoring the labor market on an ongoing basis and adjusting to its trends in order to limit
the risk, also in terms of remuneration and incentives offered, including stock options for top management.
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Risk related to trade credits granted
ABC Data offers trade credits to its business partners and therefore it is exposed to the risk of losing
receivables due to potential insolvency of their counterparties.
The risk is limited with group or individual insurance policies for trade receivables concluded by all ABC
Data Group companies. Insurance decisions determine internal decisions regarding trade credit limits for
ABC Data Group clients. In most cases, such limits do not exceed the level of coverage granted by the
insurer.
The companies within the ABC Data Group use an internal integrated CRM (customer relationship
management) system allowing analysis of risk related to clients, including the history of contracts, value of
orders and timeliness of payment, as well as analysis, approval and management of credit limits for
individual clients.
Receivables from clients are monitored on an ongoing basis. In case of overdue payments, sales are
suspended and immediate collection measures are implemented.
The efficient procedure of trade credit granting, verifying and monitoring, bad debt level has remained flat.
Risk related to the seasonality of sales
ABC Data's sales are of seasonal nature, which involves the sales level exceeding the sales average in the
fourth quarter of a given year. Capital expenditure of institutional clients and increased purchases of retail
clients over the Christmas period contribute most to the trend.
Risk related to damage or loss of goods in warehouse following force majeure
Gathering goods of substantial value in one place gives rise to a risk of exposing it to force majeure, such as
fire, flood etc. All ABC Data's assets (including inventories) are insured, as well as a potential loss of
income.
The above events may substantially limit or even suspend operations of ABC Data and its capital group
comapnies. This in turn may temporarily disrupt trade relations with clients and may damage their trust in
ABC Data as a supplier.
Major shareholder risk
As at 31 December 2014, companies belonging to the Guarantor's group companies held jointly 61.52% of
shares in the share capital, corresponding to 61.52% of votes at the ABC Data's general shareholders'
meeting. As at the date of publishing the ABC Data's financial statements for 2014, the above figures
remained the same. In 2014, the total share of the companies belonging to the Guarantor's group companies
in the interest (expressed in percent) decreased from 61.54% to 61.52% following the share capital increase.
At the same time during the reporting period and by the date of publication of this report, the number of the
ABC Data's shares held by the entities in the Guarantor's group did not change.
The impact of the companies belonging to the Guarantor's group, as the majority shareholder, on decisions
made by general shareholders' meeting of ABC Data, may be substantially stronger than the impact of
minority shareholders.
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6.
Risk Factors Related to Poland and Czech Republic
Risk connected with macro-economic situation and social, economic or political developments
The general macro-economic situation, particularly such factors as regulatory changes, inflation, deflation,
economic recession, local market disruption, social unrest, changes in disposable income or gross national
product, variations in interest rates and taxation policies, levels of economic growth and other similar factors
may have a direct influence on business results, financial standing, and growth prospects of the Issuer,
the Guarantor, members of the Issuer's Group or of the Guarantor's Group. The situation on financial
markets, perception of Poland and the Czech Republic on international foreign exchange markets, and
interest rates has a direct impact on investors' willingness to take risk.
Each government, also the Polish and Czech government conducts the policy of influencing the economic
growth by applying such measures as: allocation of resources, fiscal policy, or preferential terms for selected
sectors of the economy or firms. The government, in cooperation with other state administration and
constitutional bodies, is also empowered to introduce new regulations, which have an impact on the
economy, such as regulations connected with money supply, interest rates, foreign exchange rates, taxes,
inflation, budget deficit, foreign debt, unemployment level or income structure of individuals, which may be
material factors affecting the economic situation in the segments, in which the Issuer, the Guarantor, and
members of the Issuer's Group or of the Guarantor's Group operate.
Negative trends in the aforementioned factors may have a material negative impact on the prospects
of growth, results, and financial standing of businesses operating in Poland and the Czech Republic, in
particular, the Issuer, the Guarantor, and members of the Issuer's Group or of the Guarantor's Group. The
above may, consequently, have a negative impact on the Issuer's and the Guarantor's ability to meet their
Bond-related liabilities.
There can be no assurance that political or economic instability will not occur in Poland or the Czech
Republic that any such instability will not adversely affect the Issuer's or the Guarantor's business, results of
operations, financial standing, liquidity, capital base, prospects or reputation.
Risk connected with terrorist attacks, pandemic, natural disasters, and other extraordinary events
Terrorist attacks, pandemics, natural disasters, and other extraordinary events may cause material
disturbances in the global economy, increase the level of uncertainty on financial markets, additionally lower
the level of mutual trust, and reduce the ability of market participants to settle liabilities or the opportunities
to acquire financing.
Each of the above factors may have a material negative impact on the growth prospects, results, and financial
standing of the Issuer, the Guarantor and members of the Issuer's Group or of the Guarantor's Group.
The above may, consequently, have a negative impact on the Issuer's and the Guarantor's ability to meet their
Bond-related liabilities.
Risks related to the inflation rate, interest rate levels and their changes
The financial results of the Issuer, the Guarantor and members of the Issuer's Group or of the Guarantor's
Group are influenced by the inflation rate. Any significant change in inflation or interest rates may
negatively affect the Issuer's or the Guarantor's business and its financial situation.
7.
Risk Factors Related to the Bonds
General risks related to bonds
The Bonds may not be a suitable investment for all investors.
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Each potential investor in the Bonds must determine the suitability of that investment in light of its own
circumstances. In particular, each potential investor should:
(a)
have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits
and risks of investing in the Bonds and the information contained or incorporated by reference in
this Prospectus or any of its supplements;
(b)
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context
of its particular financial situation, investment in the Bonds and the impact the Bonds will have
on its overall investment portfolio;
(c)
have sufficient financial resources and liquidity to bear all of the risks of an investment in the Bonds;
(d)
understand thoroughly the terms of the Bonds (especially the Terms and Conditions, this Prospectus
and its supplements) and be familiar with the behaviour or development of the respective financial
market; and
(e)
be able to evaluate (either alone or with the help of a financial adviser) possible scenarios of further
development of economics, interest rates and other factors that may affect its investment
and its ability to bear the applicable risks.
The Bonds are complex financial instruments. Institutional investors purchase complex financial instruments
with adequate risk, the level of which they are aware of, in order to decrease the risk or increase the profit
of their overall portfolios. A potential investor should not invest in the Bonds, which are complex financial
instruments, unless it has the expertise (either alone or with a financial adviser) to evaluate the performance
of the Bonds under changing conditions determining the value of the Bonds and the impact this investment
will have on the potential investor's investment portfolio.
Liquidity risk
The Issuer applied for admission of the Bonds to trading at the Prague Stock Exchange (regulated market).
There can be no assurance that there will be a liquid secondary market for the Bonds or, if such will develop,
that it will last. The fact that Bonds are listed on a regulated market does not necessarily lead to higher
liquidity of the listed Bonds than the unlisted ones. The investor may not be able to sell the Bonds at any
time at a fair market price on an illiquid market.
The Issuer may be unable to list the Bonds on the Prague Stock Exchange
The Issuer intends to take all the necessary steps to ensure that the Bonds are admitted to trading on the
Regulated Market of the Prague Stock Exchange as soon as possible after the offering of the Bonds.
However, there is no guarantee that all of the conditions for listing will be met and that the Bonds will be
admitted to trading on the regulated market of the Prague Stock Exchange on the expected date.
Trading in the Bonds may be suspended or the Bonds may be excluded from trading on the regulated
market of the Prague Stock Exchange
The Prague Stock Exchange has the right to suspend trading in listed bonds if an issuer of the bonds fails to
comply with Prague Stock Exchange's regulations (such as, specific disclosure requirements) or if such
suspension is necessary to protect the interests of market participants or the orderly market functioning is
temporarily endangered. There can be no assurance that trading in the Bonds will not be suspended. Any
suspension of trading could materially adversely affect the Bonds' trading price.
Moreover, if an issuer of bonds which are listed on the Prague Stock Exchange fails to fulfil certain
requirements or obligations under the applicable laws and regulations or if the orderly stock exchange
trading, the safety of the trading or the investors' interests are endangered, the bonds can be excluded from
30
trading on the Prague Stock Exchange. In particular the Bonds could be excluded from trading when, among
others: (i) the transferability of the Bonds is restricted or (ii) there is such instruction by the CNB, or (iii)
early redemption of the Bonds has been announced. There can be no assurance that such a situation will not
occur in relation to the Bonds.
Taxation
Potential purchasers and sellers of the Bonds should be aware of the fact that they may be required to pay
taxes or other charges according to the laws and practices of Poland or the state where the Bonds
are transferred or in another relevant jurisdiction. In some countries no official statements of tax offices
or court rulings in the matter of financial instruments such as the Bonds may be provided. Potential investors
should not rely on the brief summary of tax matters included in this Prospectus when purchasing, selling
or repaying these Bonds, but they should act according to the recommendation of their financial advisors
regarding their individual taxation. To assess the risks stated in this section, the investors should take into
account at least the chapter Taxation on page 154 of this Prospectus.
Legality of purchase
Potential purchasers of the Bonds (in particular foreign entities) should be aware that the purchase
of the Bonds may be subject to legal restrictions affecting the validity of the purchase. Neither the Issuer,
the Guarantor, potential dealers nor any of their respective affiliates have or assume responsibility
for the legality of the acquisition of the Bonds by any potential purchaser of the Bonds, whether under
the laws of the jurisdiction of its incorporation or jurisdictions where it operates (if different). A potential
purchaser cannot rely on the Issuer, the Guarantor, potential dealers or any of their respective affiliates when
deciding in the matter of legality of the Bonds purchase.
Change of law
Terms and Conditions of the Bonds are governed by Czech law in force as of the date of this Prospectus.
No assurance can be given as to the impact of any possible judicial decision or change to Czech law
or administrative practice after the date of this Prospectus.
Legal investment considerations may pose restrictions for certain investors
The investment activities of certain investors are regulated by laws and orders or are subject to inspection or
regulation by certain authorities. Potential investors in the Bonds (foreign investors, in particular) should
consult their legal advisers to determine whether and to what extent the Bonds are legal investments for
them. The Issuer shall not bear any responsibility for the legality of investment in the Bonds by potential
investors, regardless of whether the law applicable in the state of incorporation, state of residence or state of
performance of business activities of potential investors is Czech law or another law.
Return on the investment in Bonds may be affected by various fees
The overall return on investments in the Bonds may be affected by the fees charged by the fiscal and paying
agent of the Bond issue, an agent for the sale/purchase of the Bonds (such as the Lead Manager) or charged
by the relevant settlement system used by the investor. Any such person or institution may charge fees for
the opening and keeping of an investment account, securities transfers, securities safekeeping services, etc.
The Issuer recommends that potential investors in the Bonds familiarise themselves with the materials that
will serve as the basis for charging fees related to the Bonds.
Early Redemption Risk
In the event of an early redemption of the Bonds in accordance with the Terms and Conditions, the value
of the yield on the Bonds could be lower than anticipated. Also, there can be no assurance that at the relevant
time the Bondholders will be able to reinvest the redemption proceeds at an effective interest rate as high
31
as the return that would have been received on such Bonds had they not been redeemed. Potential investors
should consider such reinvestment risk in light of other investments available at that time.
Write Down Risk
In the event of a reduce of the outstanding nominal value of Bonds in accordance with the Terms and
Conditions (Write Down), the value of the yield on the Bonds could be lower than anticipated. Also, there
can be no assurance that at the relevant time the Bondholders will be able to reinvest the reduced proceeds at
an effective interest rate as high as the return that would have been received on such Bonds if their
outstanding nominal value had not been reduced. Potential investors should consider such reinvestment risk
in light of other investments available at that time.
Risks associated with resolutions of Bondholders
As the Terms and Conditions provide for resolutions of the Bondholders, certain rights of a Bondholder may
be amended or reduced or even cancelled by way of resolutions, which could affect the Bondholder
negatively.
As the Terms and Conditions provide for resolutions of the Bondholders, a Bondholder is subject to the risk
of being outvoted by a majority resolution of the Bondholders. As such majority resolution properly adopted
is binding on all Bondholders, certain rights of such Bondholder against the Issuer or the Guarantor under
the Terms and Conditions of the Bonds may be amended or reduced or even cancelled.
Risks associated with appointment of common proxy
As the Terms and Conditions provide for the appointment of a joint representative, a Bondholder may be
deprived of its individual right to pursue and enforce its rights under the Terms and Conditions against the
Issuer or the Guarantor. The Terms and Conditions provide for the appointment of a joint representative, the
common proxy, by a qualified majority (in particular a three-quarters vote) resolution of the Bondholders.
Thus, it is possible that a Bondholder may be deprived of its individual right to pursue and enforce its rights
under the Terms and Conditions against the Issuer or the Guarantor, such right passing to the common proxy
who is then exclusively responsible to claim and enforce the rights of all Bondholders.
Risk of Non-payment
Like any other monetary debt, Bonds are exposed to the risk of non-payment. Under certain circumstances,
the Issuer may be unable to pay interest on the Bonds, and the value for the Bondholders upon redemption
may be lower than their initial investment, under certain circumstances, the Bonds could even be worthless.
The Issuer's ability to pay interest on the Bonds or repay their nominal value depends in particular
on the performance and solvency of the entities with whom it does business. If the Issuer's debtors
(current or future) default on their debts, such fact might have a negative impact on its ability to meet
its obligations under the Bonds in a due and timely manner.
Specific risks related to floating rate bonds
A Bondholder of a floating rate Bond is exposed to the risk of variation of interest rates, as well
as of uncertain interest income. Floating interest rates do not ensure an anticipated determination of profit.
The Bonds, the profit of which depends on the development of the reference rates, are sophisticated credit
instruments.
Under certain conditions, the Calculation Agent may determine the Reference Rate and binding
procedures or standards for making such determinations or adjustments to the Reference Rate will not be
available to the Calculation Agent
32
In cases where the Calculation Agent is authorised by the Terms and Conditions to ascertain the value of any
asset based on currently prevailing market practice (which may change significantly from time to time), no
binding procedures, standards or internal regulations regarding such adjustments will be available to the
Calculating Agent. Furthermore, if the relevant Reference Rate index ceases to exist, the Calculation Agent
may select any bank operating in the Prague interbank market to quote interest rates for the sale of Czech
crown interbank deposits. The Calculation Agent will not have any binding procedures, standards, internal
regulations or precedents at its disposal when making such determination and any such decision will
therefore be reached on an ad hoc basis pursuant to a case-specific analysis. Because not every event or
development concerning the Reference Rate is foreseeable, any adjustments or determinations made to the
Reference Rate performed by the Calculation Agent may (negatively) influence the Bond interest as
anticipated by an otherwise experienced investor at the time of the investment.
The Security will not be granted directly to the Bondholders.
The Security that will secure the obligations of the Issuer under the Bonds and the obligations
of the Guarantor will not be granted directly to the Bondholders but will be in connection with the issuance
of the Bonds, granted only in favour of the Security Agent under the concept of the parallel debt as stated in
the Terms and Conditions. In principle, only the Security Agent has the right to enforce the Security. As a
consequence, Bondholders will not have direct Security Interests and will not be entitled to take enforcement
action in respect of the Security.
The Bondholders' ability to recover under the Security securing the Bonds may be limited
The Security securing the Bonds will be subject to any and all exceptions, defects, encumbrances, liens
and other imperfections permitted under the conditions of the Issue and accepted by other creditors, if any,
that have the benefit of first-priority security interests in the Security securing the Bonds from time to time,
whether on or after the date the Bonds are first issued. The existence of any such exceptions, defects,
encumbrances, liens and other imperfections could adversely affect the value of the Security as well as the
ability of the Security Agent to enforce such Security. Furthermore, the first-priority ranking of security
interests can be affected by a variety of factors, including, among others, the timely satisfaction of perfection
requirements, statutory liens or re-characterization under the laws of certain jurisdictions.
The holders of obligations secured by the Security, if any, will be entitled to receive proceeds from
realization of the Security to repay their obligations in addition to the Bondholders. We cannot assure you
that, in the event of a sale or other disposition in connection with an enforcement action, the proceeds from
the sale of all of the Security would be sufficient to satisfy the amounts outstanding under the Bonds and
other obligations secured by the Security, if any. If the amount of proceeds recovered from such a sale or
other disposition is less than the aggregate amount of the obligations secured by the Security, the
Bondholders will not fully recover (if at all) under the Security and the Bondholders (to the extent not repaid
from the proceeds of the sale of the Security) would have only an unsecured claim against the remaining
assets, which will rank equal in priority to the unsecured claims with respect to any unsatisfied portion of the
obligations owed by the Issuer and the Guarantor under their other unsecured senior indebtedness.
Under the Terms and Conditions, we are allowed to issue additional bonds other than the Bonds under this
Issue and incur additional Indebtedness secured by first priority Security Interests, including the Security, so
long as such Security Interests are securing Indebtedness permitted to be incurred by the covenants described
in Clause 5 of the Terms and Conditions.
The value of the Security at any time will depend on market and other economic conditions, including the
availability of suitable buyers. By their nature, some or all of the Security may be illiquid and may have no
readily ascertainable market value, and its value to other parties may be less than its value to the pledgors.
The value of the assets pledged as Security for the Bonds may decline over time and could be impaired in the
future as a result of changing economic conditions, our failure to implement our business strategy,
competition and other future trends. In particular, some of the shares that comprise part of the Security are
shares in our holding companies and may also have limited value in the event of bankruptcy, insolvency or
33
other similar proceedings in relation to any of our operating companies because all of the obligations of the
relevant operating company must be satisfied prior to distribution to their respective equity holders. As a
result, the creditors secured by a pledge of the shares of a holding company may not recover anything of
value in the case of an enforcement sale.
Risk factors related to the Security Agent and its conduct
The Issuer cannot rule out that the Security Agent may be replaced. Although the Issuer acts with sufficient
prudence in choosing the Security Agent, a new Security Agent may not have similar experience or
reputation as the current Security Agent, and there may be a risk the Security Agent may not be able to
sufficiently exercise and enforce monetary claims from the Bonds against the Issuer or the Security Provider,
which may jeopardize satisfaction of the claims of the individual Bondholders.
The Security Agent is not obliged to act based on a decision of the Meeting if, in the opinion of the Security
Agent, such decision of the Meeting is contrary to legal regulations or good morals. The Issuer cannot rule
out that such failure to respect a decision of the Meeting, if the failure proves incorrect, may decrease or
make impossible successful enforcement of the Security.
Risk factors related to fees for Security Agent
The Bonds will be secured by the Security in favour of the Security Agent under the concept of parallel debt
as stated in the Terms and Conditions. In the case of enforcement of the Security, the enforcement proceeds
shall be reduced by the Security Agent's fees of 0.75 % of the total amount of proceeds from the enforcement
of the Security and any costs and expenses incurred by the Security Agent, or by any person appointed by
the Security Agent (in each case in relation to the enforcement of the Security) capped at 2.75 % of the total
amount of proceeds from the enforcement of the Security. Depending on the manner of realization of the
Security, it may be necessary or expedient to appoint third parties, who may charge additional fees the
amount of which will not be specified to investors, but will correspond to the regular market standard.
Specific compensation in relation to the Security Agent's actions
Each Bondholder will be obliged to reimburse (proportionally) the Security Agent for any cost, loss or
liability incurred by it (otherwise than by reason of the Security Agent's gross negligence or wilful
misconduct) when acting as Security Agent under, or exercising any authority conferred under or in
connection with the Bonds, the Terms and Conditions or, any documents creating the Security (unless
already reimbursed). Such reimbursement may have negative adverse effect on the Bondholders.
The Bondholders' rights may be adversely affected by the failure to perfect the Security
Applicable law requires that a security interest in certain assets can only be properly perfected and its
priority retained through certain actions undertaken by the secured party. There can be no assurance that the
Security Agent will monitor that the necessary action will be taken to properly perfect the Security. The
Security Agent has no obligation to monitor perfection of the Security. Such failure may result in the loss of
the Security or the priority of the security interest in favour of the Bonds against third parties.
Enforcement of the Security across multiple jurisdictions may be difficult.
The Security will be governed by the laws of multiple jurisdictions. In the event of bankruptcy, insolvency
or a similar event, proceedings could be initiated in any of these jurisdictions. The rights under the Security
will thus be subject to the laws of the respective jurisdiction, and it may be difficult to effectively enforce
such rights in multiple bankruptcy, insolvency and other similar proceedings. Moreover, such multijurisdictional proceedings are typically complex and costly for creditors and often result in substantial
uncertainty and delay in the enforcement of creditors' rights. The application of these various laws
in multiple jurisdictions could trigger disputes over which jurisdictions' law should apply and could
34
adversely affect the ability to enforce the Security and to realize any recovery under the Bonds and the
Guarantee.
In addition, the concept of the parallel debt is not explicitly regulated by any of Czech, Polish or Turkish
laws. Under the parallel debt the Issuer and the Guarantor undertake to pay to the Security Agent, as an
independent and separate creditor, sums equal to any sums which the Issuer or the Guarantor owes to each
Bondholder under the Bonds Documents. The Security Documents are entered into between the Issuer or the
Security Provider and the Security Agent, who becomes the sole secured creditor. The Security Agent should
be entitled to claim payments of any amount which the Issuer or the Guarantor owes to any Bondholder. The
Bondholders will not have any own direct rights under the Security Documents and will not be able to
individually enforce any of the Security or to exercise any rights, remedies, discretions or powers or to grant
any consents or releases relating to the Security or otherwise have direct recourse to any of the Security. In
addition, none of the Bondholders will be entitled to act individually to require the Security Agent to take
any action or proceedings under or in relation to the Security.
Given that (i) the legal concept of a parallel debt governed by Czech law, whereby the Bondholders are not
entitled to enforce obligations under the Security Documents individually has not been tested before Czech,
Polish and Turkish courts; (ii) there is only a very limited experience of Polish and Turkish courts in
decision making concerning taking and enforcing such security interests; (iii) Polish and Turkish courts have
only very limited experience with interpreting certain provisions of the Terms and Conditions, the Issuer and
the Guarantor cannot guarantee that a court decision will not negatively affect the definition of the secured
claims of the Security Agent under the parallel debt concept and ultimately the extent to which the
Bondholders would be satisfied from the proceeds of enforcement of the Security.
The Security concept based on the parallel debt and the fact that Polish and Turkish courts have never
adjudicated permissibility of security in favour of the Security Agent included in the Terms and Conditions,
the Issuer cannot exclude future court decisions that may potentially impair the Security.
Risk of an unforeseeable event
An unforeseeable event (natural disaster, terrorist attack) that causes disruptions in financial markets or a
quick change in foreign exchange rates may affect the value of the Bonds. The negative impact of such
events may decrease the return on the funds invested by the Issuer and the Guarantor, and thus jeopardize the
ability of the Issuer or the Guarantor to repay all amounts owed under the Bonds. Also, the value of the
Bonds and any proceeds from the Bonds may be affected by a global event (political, economic or other)
occurring in a country other than the country in which the Bonds are issued and traded.
8.
Risk Factors related to the Guarantee
Non-existence of application practice
The potential buyers or sellers of the Bonds should be aware that the securing of claims from bonds by a
financial guarantee declaration has not been tested in Czech courts. There cannot be any assurance that the
court adjudicating upon an action by the Bondholders against the Guarantor will acknowledge the claim
from the Guarantee and, if it does, to what extent.
Cross-border enforcement of rights
The potential buyers or sellers of the Bonds should be aware that the proceedings on a claim from the
Guarantee are to be held before the courts of the Czech Republic, but the Guarantor's assets are located also
in third countries. In relation to any assets located outside the Czech Republic, the enforcement of decisions
would have to be made in the relevant third countries and pursuant to their legal regulations.
35
Limitation of the volume of the Guarantee obligation
The potential buyers or sellers of the Bonds should be aware that in the Guarantee, the Guarantor has limited
its Guarantee obligation to 130 per cent. of the total outstanding nominal value of all issued Bonds. If the
value of the 'Bondholders claims exceeds this amount, the Guarantor will not be obliged to fully satisfy all
the 'Bondholders claims, but, pursuant to the terms of the Guarantee, secured debts will be satisfied in the
order following the dates on which the relevant written requests were delivered to the Guarantor. If the total
maximum amount of the Guarantee is exceeded as a result of the satisfaction of the secured debts based on
requests delivered on the same date, the secured debts exercised on the same date will be satisfied pro rata
according to the nominal values of the Bonds in respect of which the Guarantee was exercised, so that the
total value of the satisfied debts does not exceed the total maximum amount of the Guarantee. Secured debts
that remain unsatisfied after the total maximum amount of the Guarantee is reached will not be discharged
by the Guarantor.
Limitation of the term of the financial guarantee obligation
The potential buyers or sellers of the Bonds should be aware that, in the Financial Guarantee Declaration, the
Guarantor has limited the term of validity of its financial guarantee obligation until 8 April 2022. If any
Bondholders exercise their claims after this date, the Guarantor will not be obligated to satisfy the claims.
Risk of non-performance
The potential buyers or sellers of the Bonds should be aware that if the rights from the Guarantee are
exercised, the Guarantor may not be able to repay all its debts to the Bondholders under the Guarantee.
36
INFORMATION INCORPORATED BY REFERENCE
The following information has been incorporated into this Prospectus by reference to the documents that are
available on the Issuer's web page (www.privateequitymanagers.pl/mci-euroventures-1-0/#mci-vp-vi-ska)
and the Guarantor's web page (www.mci.pl/en/investor-relation/financial-reports) under the links indicated
below. For facilitation the respective names of the documents and the page numbers have been indicated in
the table below.
Issuer
Information
Document
Pages
Audited IFRS financial statements of the
Issuer for the year ended 31 December
2013
2013YE Financial Statement MCI Venture
Projects VI Sp. z o.o. VI SKA
3-22
The auditor's opinion on financial
statements of the Issuer for the year ended
31 December 2013
1-2
Issuer for the year ended 31 December
2014
3-25
statements of the Issuer for the year ended
31 December 2014
1-2
Web link to documents:
http://www.privateequitymanagers.pl/wpcontent/uploads/2016/02/2013YE_Financial_Statement_MCI_Venture_Projects_VI_Sp_z_o_o_VI_SKA1.p
df
http://www.privateequitymanagers.pl/wpcontent/uploads/2016/02/2014YE_Financial_Statement_MCI_Venture_Projects_VI_Sp_z_o_o_VI_SKA1.p
df
Guarantor
(a)
Consolidated Financial Statements:
Information
Document
Pages
Audited IFRS consolidated financial
statements of the Guarantor for the year
ended 31 December 2013
2013YE Consolidated Financial Statement
MCI Management S.A.
5-43
The auditor's opinion on consolidated
financial statements of the Guarantor for
the year ended 31 December 2013
MCI Management S.A.
1-4
Audited IFRS consolidated financial
MCI Management S.A.
16-69
39
Information
Document
Pages
The auditor's opinion on consolidated
financial statements of the Guarantor for
the year ended 31 December 2014
MCI Management S.A.
1-15
Web links to documents:
http://mci.pl/content/uploads/2015/09/2013yeconsolidatedfinancialstatementmci1.pdf
http://mci.pl/content/uploads/2015/09/2014yeconsolidatedfinancialstatementmci1.pdf
(b)
Standalone Financial Statements:
Information
Document
Pages
Guarantor for the year ended 31 December
2013
2013YE Financial Statement MCI
Management S.A.
21-54
Management S.A.
1-4
2014
Management S.A.
23-62
Management S.A.
1-13
2015
Management S.A.
14-64
Management S.A.
1-13
Web links to documents:
http://mci.pl/content/uploads/2015/09/2013ye-financial-statement-mci-management-sa1.pdf
http://mci.pl/content/uploads/2015/09/2014ye-financial-statement-mci-management-sa1.pdf
http://mci.pl/content/uploads/2015/09/2015ye-financial-statement-mci-capital-sa.pdf
Security Provider
Information
Document
Pages
Audited financial statements and auditor's
opinion on financial statements of the
Security Provider for the year ended 31
December 2013
2013YE Financial Statement ALFANOR
13131 AS
3-9
statements of the Security Provider for the
13131 AS
1-2
40
Information
Document
Pages
Audited financial statements and auditor's
opinion on financial statements of the
Security Provider for the year ended 31
December 2014
13131 AS
3-10
statements of the Security Provider for the
year ended 31 December 2013
13131 AS
1-2
year ended 31 December 2013
Web link to documents:
http://www.privateequitymanagers.pl/wpcontent/uploads/2016/02/2013YE_Financial_Statement_ALFANOR_13131_AS.pdf
http://www.privateequitymanagers.pl/wpcontent/uploads/2016/02/2014YE_Financial_Statement_ALFANOR_13131_AS.pdf
41
TERMS AND CONDITIONS OF THE BONDS
The Bonds issued by MCI Venture Projects Spółka z ograniczoną odpowiedzialnością VI spółka
komandytowo – akcyjna, a limited joint-stock partnership incorporated under the laws of Poland, with its
registered office in Warsaw (00-113) at ul. Emilii Plater 53, Poland, entered in the Register of Business
Entities kept by the District Court for the Capital City of Warsaw in Warsaw, XII Commercial Division of
the National Court Register under the number KRS 0000485654 (the Issuer), in the anticipated total nominal
value of up to CZK 351,000,000 (in words: three hundred and fifty one million Czech crowns), bearing
floating interest rate, due in 2021 (the Issue and individual Bonds within the Issue as the Bonds),
are governed by these Terms and Conditions of the Bonds (the Terms and Conditions) and
by Act No. 190/2004 Coll., on Bonds, as amended (the Bonds Act).
Liabilities under the Bonds will be unconditionally and irrevocably secured by a financial guarantee (the
Guarantee) issued by MCI Capital S.A., a joint-stock company incorporated under the laws of Poland,
with its registered office in Warsaw (00-113) at ul. Emilii Plater 53, Poland, entered in the Register of
Business Entities kept by the District Court for the Capital City of Warsaw in Warsaw, XII Commercial
Division of the National Court Register under the number KRS 0000004542 (the Guarantor), by pledge
over shares in ABC Data S.A., a joint-stock company incorporated under the laws of Poland, with its
registered office in Warsaw (03-230), at ul. Daniszewska 14, Poland (ABC Data), listed on the Warsaw
Stock Exchange, ISIN: PLABCDT00014, Bloomberg ticker: ABC PW, which are held by the Issuer (the
Initial Polish Pledged Shares) and pledge over shares in Indeks Bilgisayar Sistemleri Mühendislik Sanayi
ve Ticaret A.Ş., a joint-stock company incorporated under the laws of Turkey, with its registered office at
Merkez Mah. Erseven Sok. No: 8, 34406 Kağıthane / Istanbul, Turkey (Indeks), listed on the Istanbul Stock
Exchange, ISIN: TREINDX00019, Bloomberg ticker: INDES TI, which are held by Alfanor 13131 AS, a
private limited liability company, incorporated under the laws of Norway, with its registered office at c/o
CorpNordic Norway AS, Bryggetorget 1, 0250 Oslo, Norway (the Security Provider and the Initial
Turkish Pledged Shares, the Initial Turkish Pledged Shares together with the Initial Polish Pledged Shares
as the Initial Pledged Shares). The Security (as defined in the Prospectus) will be created in favour of the
Security Agent (as defined in the Prospectus) under the concept of the parallel debt as specified in Clause 4.4
of the Terms and Conditions.
The Issue was approved by a resolution of the Guarantor's Supervisory Board dated 24 September 2015 and
approved by a decision of the Guarantor's Management Board dated 10 March 2016. The Issuer's General
Meeting approved the Bonds on 14 December 2015.
The ISIN of the Bonds allocated by the Central Depository (as this term is defined in Article 1.3 below) is
CZ0000000708. The title of the Bonds is MCI VAR/21.
Services of the fiscal and paying agent related to the interest payments and the Bonds redemption will be
provided by Česká spořitelna, a.s., with its registered office in Prague 4, Olbrachtova 1929/62, Postal Code
140 00, identification number: 452 44 782, registered with the Commercial Register kept by the Municipal
Court in Prague, Section B, Insert No. 1171 (the Fiscal and Paying Agent). The relationship between the
Issuer and the Fiscal and Paying Agent in connection with the performance of payment services in favour
of the Bondholders (as this term is defined below) and some other administrative acts related to the Issue
is governed by an agreement entered into between the Issuer and the Fiscal and Paying Agent (the Agency
Agreement). A counterpart of the Agency Agreement is available for inspection to the Bondholders during
regular business hours at the Specified Office of the Fiscal and Paying Agent defined and set out in Article
12.1(a) of these Terms and Conditions.
Services of the security agent in connection with the Security will be provided by Česká spořitelna, a.s. (the
Security Agent) under the terms of the Agency Agreement.
Services of the calculation agent in connection with the Bonds will be provided to the Issuer by Česká
spořitelna, a.s. (the Calculation Agent) under the terms of the Agency Agreement.
42
Services of the listing agent related to the listing of the Bonds comprising the Issue on the regulated market
of the Prague Stock Exchange, as such term is defined below, will be provided by Česká spořitelna, a.s (the
Listing Agent) under the terms of the Agency Agreement.
1.
General Characteristics of the Bonds
1.1
Form, Nominal Value, Anticipated Volume of the Issue
The Bonds are issued as book-entered securities in bearer form. The nominal value of each Bond
is CZK 3,000,000 (in words: three million Czech crowns). The anticipated total nominal value of the Issue is
up to CZK 351,000,000 (in words: three hundred and fifty one million Czech crowns). In accordance with
the Bonds Act the Issuer is entitled to issue the Bonds in a lower total nominal value than the anticipated
total nominal value. The Issuer is entitled to issue the Bonds in a higher total nominal value which, however,
shall not exceed CZK 699,000,000 (in words: six hundred and ninety-nine million Czech crowns). Further
details are set out in clause 2.1. All Bonds will be admitted to listing on the regulated market (in Czech:
Regulovaný trh) of Burza cenných papírů Praha, a.s. (the Prague Stock Exchange or the PSE).
1.2
Detachment of the Right to Interest; Pre-emptive and Exchange Rights
There will be no detachment of the right to receive interest payable on the Bonds. No pre-emptive
or exchange rights are attached to the Bonds.
1.3
Bondholders
For the purpose of these Terms and Conditions, the Bondholder means a person on whose holder's account
kept by the Central Depository or in follow-up records relating to the central registry for securities the Bond
is recorded.
Central Depository means Centrální depozitář cenných papírů, a.s., a company with its registered office
in Prague 1, Rybná 14, Postal Code: 110 05, identification number: 250 81 489, registered with
the Commercial Register maintained by the Municipal Court in Prague, Section B, Insert No. 4308.
Unless the Issuer is informed in a credible manner about facts proving that the Bondholder is not the owner
of the relevant book-entered securities, the Issuer and the Fiscal and Paying Agent will consider as the
Bondholder in accordance with these Terms and Conditions authorised to receive the payments in
connection with the Bonds a person stated in the extract from the issue registry (in Czech: evidence emise) of
the Bonds (the Issue Registry) provided by the Central Depositary or generated by the Fiscal and Paying
Agent independently (the Extract from the Issue Registry). Persons who are the Bondholders and who are
not registered for any reason in the relevant records of holders of book-entered securities will be obliged to
promptly notify the Issuer and the Fiscal and Paying Agent of such fact and of their acquisition title to the
Bonds.
1.4
Transfer of the Bonds
The transfer of the Bonds will be effective upon the registration thereof in the holder's account maintained by
the Central Depository in accordance with the rules and regulations of the Central Depository and under
applicable laws. In case of the Bonds recorded in the clients' (nominee) account in the Central Depository,
the transfer of the Bonds will be effective (i) upon the registration of such transfer in the clients' account
in accordance with the rules and regulations of the Central Depository and under applicable laws, whereas
the client account owner is obliged to promptly register such transfer in the holder's account as of the
moment of registration thereof in the clients' account, or (ii) in case of any transfer between the Bondholders
within one clients' account, upon the registration of such transfer in the holder's account in follow-up records
relating to the central registry for securities.
43
1.5
Rating
Neither the Issuer's nor the Guarantor's financial standing (rating) has been assessed.
No separate financial rating of the Issue has been assigned and, therefore, the Issue does not have a separate
rating.
1.6
Certain Other Obligations of the Issuer
The Issuer undertakes to pay interest on and repay the nominal value of the Bonds in the manner and at the
place set out in these Terms and Conditions.
2.
Volume of the Issue, Issue Price, Subscription Period, Method of Bond Issue
2.1
Issue Date, Subscription Period
The issue date of the Bonds is scheduled on 8 April 2016 (the Issue Date). The Bonds may be issued (i) in
a single series on the Issue Date or (ii) in tranches during the subscription period ending one year after the
Issue Date (the Issue Period). The Issuer is entitled to issue the Bonds on the Issue Date or during the Issue
Period in a volume higher than the anticipated Bond Issue volume. If the Issuer decides on the Bond Issue in
a volume higher than the anticipated Bond Issue volume, total nominal value of all issued Bonds may not
exceed CZK 699,000,000 (in words: six hundred and ninety-nine million Czech crowns). All Bonds will be
admitted to listing on the Prague Stock Exchange.
Without undue delay after the expiry of the Issue Period, the Issuer will notify the Bondholders, in the same
manner as used for publication of these Terms and Conditions, of the total nominal value of all issued Bonds
comprising the Issue.
2.2
Issue Price
The issue price of any Bonds issued on the Issue Date will be set between 98 per cent. of nominal value as
the minimum issue price and 102 per cent. of nominal value as the maximum issue price.
The issue price of any Bonds issued on the Issue Date will be published on the Issuer's website:
http://www.privateequitymanagers.pl by selecting the following sections: “FUNDS MANAGED””MCI.EUROVENTURES 1.0”-“MCI Venture Projects Sp. z o.o. VI S.K.A.” not later than one day before
the Issue Date.
The issue price of any Bonds issued after the Issue Date will be determined by the Issuer taking into account
the current market conditions. Where relevant, a corresponding accrued interest will be added to the amount
of the issue price for any Bonds issued after the Issue Date.
2.3
Method and Place of the Bonds Subscription
The Bonds will be offered for purchase by the lead manager of the Issue, Česká spořitelna, a.s. (the Lead
Manager), to professional customers (within the meaning of Section 2a(1) of the Act No. 256/2004 Coll.,
the Capital Market Act, as amended) in the Czech Republic or outside of the Czech Republic in accordance
with applicable laws.
On a relevant settlement date agreed to in the subscription agreement to purchase the Bonds
(the Subscription Agreement), the Bonds will be allocated to the Lead Manager against payment
of the issue price by crediting the issue price into a respective bank account of the Issuer notified by the
Issuer to the Lead Manager for this purpose. The Bonds will be resold on the same day by the Lead Manager
to the investors.
44
3.
Status of the Bonds and Guarantee
The Bonds (and all payment obligations of the Issuer vis-à-vis the Bondholders under the Bonds) constitute
direct, unconditional and unsubordinated obligations of the Issuer, to be secured by i) a Guarantor's
guarantee in favour of each Bondholder and ii) by the Security in favour of the Security Agent under the
concept of the parallel debt as specified in Clause 4.4 of the Terms and Conditions, which are and will rank
pari passu among themselves and at least pari passu with any present and future direct, unconditional,
secured and unsubordinated obligations of the Issuer with the exception of such liabilities treated
preferentially under applicable mandatory laws.
The Guarantor has unconditionally and irrevocably guaranteed the due and punctual payment of all sums
from time to time payable by the Issuer in respect of the Bonds up to the amount equal to 130 per cent. of the
total outstanding nominal value of all issued Bonds. This Guarantee constitutes direct, unconditional and
unsubordinated obligation of the Guarantor which will at all times rank at least pari passu with any present
and future unsecured obligations of the Guarantor, save for such obligations as may be preferred by
provisions of law that are both mandatory and of general application.
4.
Security
4.1
Basic Security Mechanics
The Issuer and the Security Provider undertake to ensure that before the Issue Date the total of the Initial
Polish Pledged Shares subject to the Initial Polish Pledge Agreement will be at least 6 million shares and the
total of the Initial Turkish Pledged Shares subject to the Initial Turkish Pledge agreement will be at least 5
million shares.
The Issuer undertakes to the Bondholders and the Security Agent that it will, and that the Issuer will procure
that the Security Provider will, register in the relevant registers or take any other steps necessary for
perfection of the pledge over the Initial Polish Pledged Shares and the Initial Turkish Pledged Shares so that
the pledge over the Initial Polish Pledged Shares and the pledge over the Initial Turkish Pledged Shares is
duly registered or otherwise created and perfected within no later than 20 Business Days following the Issue
Date.
The Security Agent will determine and test the market value of the Security regularly on a quarterly basis
until the Bonds' maturity date, starting on the date falling 3 (three) months following the Issue Date (the
Testing Date). If such date is not a Business Day, the testing will occur on the first Business Day following
the Testing Date. In determining and testing the market value of the Security, the Security Agent will take
into account the officially published daily closing prices of the Security published on the Bloomberg screen
on each of the 20 Business Days immediately preceding the relevant Testing Date. The market values so
established will be converted into Czech crowns (CZK) using the daily foreign exchange rates for Czech
crowns (CZK) officially published by the Czech National Bank on each of the 20 Business Days
immediately preceding the relevant Testing Date. The exact formula for the testing of the market value of the
Security is:
𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑆𝑒𝑐𝑢𝑟𝑖𝑡𝑦 = 𝑁 ∗
∑20
∑20
𝑖=1(𝑃𝑖 ∗ 𝐴𝑖 )
𝑖=1(𝑇𝑖 ∗ 𝐵𝑖 )
+𝑀∗
+ 𝑀𝑉𝐴
20
20
Where:
N… number of the Polish Pledged Shares (as such term is defined below)
M… number of the Turkish Pledged Shares (as such term is defined below)
Pi… closing prices of the Polish Pledged Shares on day i
Ti… closing prices of of the Turkish Pledged Shares on day i
Ai… PLN/CZK exchange rate on day i
45
Bi… TRY/CZK exchange rate on day i
MVA… market value of the Additional Share Security1
The Issuer is obliged to top up the Security in favour of the Security Agent, and the Guarantor undertakes
that any MCI Group company, MCI.EV or any MCI.EV Subsidiary will top up the Security in favour of the
Security Agent, by virtue of creating and perfecting pledges over shares in ABC Data unencumbered in any
way (the Additional Polish Pledged Shares, together with the Initial Polish Pledged Shares as the Polish
Pledged Shares) or additional shares in Indeks unencumbered in any way (the Additional Turkish Pledged
Shares, together with the Initial Turkish Pledged Shares as the Turkish Pledged Shares) (the Additional
Turkish Pledged Shares, together with the Additional Polish Pledged Shares as the Additional Pledged
Shares and the Initial Pledged Shares and the Additional Pledged Shares together as the Pledged Shares),
provided that the market value of the Security as tested by the Security Agent, drops to or below 100% of the
outstanding nominal value of the Bonds (the Trigger Event). The top-up of the Security must result in
bringing the total market value of the Security to at least 115% of the outstanding nominal value of the
Bonds (the Security Limit). The market value of the Security for the purposes of testing by the Security
Agent does not include (a) any shares in Indeks which have been provided as the Security in favour of the
Security Agent and which are traded neither on the Istanbul Stock Exchange nor on any European regulated
market, (b) any shares in ABC Data which have been provided as the Security in favour of the Security
Agent and which are traded neither on the Warsaw Stock Exchange nor on any other European regulated
market or (c) any shares, other than shares in ABC Data or shares in Indeks, which have been provided as
the Security in favour of the Security Agent and which are not traded on any European regulated market.
If neither the Issuer, the Security Provider, the Guarantor, any MCI Group company, MCI.EV nor any
MCI.EV Subsidiary meets the Security Limit as set out above:
(a)
either the Issuer will reduce the outstanding nominal value of each Bond (without the need for the
consent of the Bondholders) by the relevant Write Down Amount (as defined bellow) which would
bring the unpaid Bonds to meet the Security Limit (such reduction, a Write Down and a Written
Down); or
(b)
the Issuer and the Guarantor undertake that any other MCI Group company, MCI.EV or any
MCI.EV Subsidiary will create pledge over shares in any company listed on a European regulated
market (the Additional Share Security, and together with the Pledged Shares the Security) to meet
the Security Limit.
Provided that the Issuer will choose the Write Down mechanism to meet the Security Limit, the Issuer shall,
as soon as reasonably practicable following the relevant Testing Date, and in any event in no more than 3
Business Days following such Testing Date, give notice (which notice shall be irrevocable) to the
Bondholders (the Write Down Notice) in accordance with clause 14 (Notices) and to the Fiscal and Paying
Agent stating:
(i)
that the Trigger Event has occurred;
(ii)
the date on which the Write Down will take effect, which shall not occur later than thirty-five (35)
Business Days following such Testing Date (the Write Down Date); and
(iii)
the amount (expressed per outstanding nominal value of each Bond or as a percentage) by which
then outstanding nominal value of each Bond is to be Written Down on the Write Down Date
determined by the Issuer to be necessary to meet the Security Limit (the Write Down Amount).
A Write Down may occur on one or more occasions and accordingly the Bonds may be Written Down on
one or more occasions. Any such Write Down shall not constitute a default by the Issuer under the Bonds.
1
Market value of the Additional Share Security will be calculated using the same methodology as for the market value of the Polish Pledged Shares and the Turkish
Pledged Shares. If the Additional Share Security is not established, market value of the Additional Share Security will be assumed to be zero.
46
The obligation of the Issuer to top up the Security or an event set out in paragraph (b) above must occur by
thirty-five (35) Business Days following the Testing Date on which the Security Limit has not been met (by
expiration of this time period the topped-up Security must be perfected). If the Security Limit amounts to at
least 150% of the outstanding nominal value of the Bonds as calculated by the Security Agent on any
Testing Date, the Security Agent is obliged to waive the right of pledge over such part of the Security to
bring down the Security Limit as close as possible to 115% of the outstanding nominal value of the Bonds.
Clause 8 (Payment Terms) will apply with the necessary modifications for the payment of the Write Down
Amount to the Bondholders in accordance with this Clause 4.1.
4.2
Security of the Bonds in favour of the Security Agent
The payment of the Security 'Agent claim (as such term is defined below) corresponding to all the
receivables of the Bondholders owed by the Issuer under or in connection with the Bonds will be secured by
the Security in favour of the Security Agent under the concept of the parallel debt as specified in Clause 4.4
(Parallel debt).
The Bondholders will be represented by the Security Agent for the purposes of establishment, perfection,
administration and potential enforcement of the Security. A "parallel debt" obligation will be created in
respect of the payment obligations of the Issuer vis-á-vis the Bondholders under, or in connection with, the
Bonds (more details on the parallel debt obligation and the parallel debt are provided in clause 4.4 (Parallel
debt) of these Terms and Conditions).
Each Bondholder shall supply the Security Agent with any information that the Security Agent may
reasonably specify as being necessary or desirable to enable the Security Agent to perform its functions as
Security Agent.
Material documents relating to the Security, including the contractual documentation under which
the Security will be established, will be accessible at the registered office of the Issuer during regular
business hours.
4.3
Position of the Security Agent
The Security Agent shall act with professional care and in compliance with the interests of the Bondholders
and shall be bound by the instructions validly given to it by the Meeting (as defined below) unless, in the
opinion of the Security Agent, such decision of the Meeting is contrary to legal regulations or good morals.
For the avoidance of doubt, Section 1868(1) of the Act No. 89/2012 Coll., the Civil Code, as amended (the
Civil Code),and related provisions, in particular Section 1126 et seq. of the Civil Code will not apply to the
activities of the Security Agent and the Security Agent will not carry out its activities within the meaning of
Section 2010(2) of the Civil Code. If the Security Agent ceases to exist without a legal successor or if the
Security Agent is not in a position to carry out its core business activity (for reasons of cancellation of the
relevant regulatory licenses or insolvency etc.) or in the case of a material breach of the obligations of the
Security Agent, the Issuer shall without undue delay appoint another person duly authorised to perform the
services of a Security Agent (the Replacement Security Agent), provided such change will not affect the
Bondholders' rights and will be approved by at least 75 per cent. of the Bondholders, or Persons Authorised
to Attend the Meeting, present at the Meeting (the Relevant Instructing Group). Upon request of the
Replacement Security Agent, the Issuer shall without undue delay enter into the new security documents
concerning the Security with the Replacement Security Agent which will be in all material aspects in the
form and substance similar to the security documents concerning the Security entered into between the Issuer
and the Security Agent. The Security Agent shall provide cooperation necessary for its substitution by the
Replacement Security Agent to the Issuer and the Replacement Security Agent. The Issuer shall notify to the
Bondholders without undue delay and in compliance with these Terms and Conditions that the new security
documents concerning the Security have been entered into with the Replacement Security Agent. The Issuer
is obliged to perfect the Security under the security documents entered into with the Replacement Security
47
Agent in the same time periods which have applied for perfection of the Security under the security
documents entered into with the Security Agent.
4.4
Parallel Debt
(a)
Parallel debt provisions
(i)
Each of the Bondholders authorises the Security Agent to perform the duties, obligations
and responsibilities and to exercise the rights, powers, authorities and discretions
specifically given to the Security Agent under or in connection with the Bonds Documents
(as such term is defined below) together with any other incidental rights, powers, authorities
and discretions.
(A)
The Security Agent will be the sole secured creditor in respect of the Security
governed by the laws of Poland or Turkey; or
(B)
in any other jurisdiction in which the Security may be taken until the full repayment
of the Bonds,
and which secures any claim of the Security Agent under Clause 4.4(b) (Parallel debt).
(b)
(ii)
Each Bondholder agrees that the Security Agent also acts as the Issuer's representative in its
roles as the Fiscal and Paying Agent, the Listing Agent and the Calculation Agent and
agrees not to terminate its authorisation to act as the Security Agent exclusively for this
reason.
(iii)
The Security Agent will agree to its appointment to act as the Security Agent in connection
with the Bonds Documents in the Agency Agreement which may include further details as to
its rights and obligations.
Parallel debt
The Issuer and the Guarantor (each the Obligor and jointly referred to as the Obligors) hereby agree
and undertake to pay to the Security Agent, as an independent and separate creditor an amount (the
Parallel Obligations or the Security Agent Claim) equal to, and in the currency of, any sums
which an Obligor owes to each Bondholder under or in connection with the Bonds, the Terms and
Conditions, any documents creating the Security (the Security Documents), and the Guarantee (the
Bonds Documents), including, for the purpose of the Security Documents and the Guarantee, any
amount which an Obligor owes to each Bondholder as a result of a party rescinding a Bonds
Document or as a result of the invalidity, illegality or unenforceability of a Bonds Document (the
Original Obligations or the Bondholders Claim).
The right of the Security Agent to demand payment of the Security Agent Claim is independent and
several from the rights of the Bondholders to demand payment of the Bondholders Claim, provided
that discharge or any other termination of a 'Bondholders Claim will discharge or in any other way
terminate the Security Agent Claim in the same amount and vice versa discharge or any other
termination of a Security Agent Claim will discharge or in any other way terminate the 'Bondholders
Claim in the same amount. The aggregate amount of the Security Agent Claim will never exceed the
aggregate amount of the Bondholders Claim.
All Security Agent Claims are owed to the Security Agent in its own name on behalf of the Security
Agent and not as agent or representative of any other person nor as trustee and all property subject to
the Security shall secure the Security Agent Claim so owing to the Security Agent in its capacity of
creditor of the Security Agent Claim. The Security Agent may enforce performance of any Security
Agent Claim in its own name as an independent and separate right (including, without limitation, any
48
suit, execution, enforcement of the Security and applications for and voting in respect of any kind of
insolvency proceedings).
Each Obligor irrevocably and unconditionally waives any right it may have to require a Bondholder to join
in any proceedings as co-claimant with the Security Agent in respect of the Security Agent Claim or its part.
(c)
Instructions
(i)
The Security Agent shall:
(A)
subject to paragraphs (iv) and (v) below, exercise or refrain from exercising any
right, power, authority or discretion vested in it as Security Agent in accordance
with any instructions given to it by the Relevant Instructing Group; and
(B)
not be liable for any act (or omission) if it acts (or refrains from acting) in
accordance with paragraph (A) above.
(ii)
The Security Agent shall be entitled to request instructions, or clarification of any
instruction, from the Relevant Instructing Group as to whether, and in what manner, it
should exercise or refrain from exercising any right, power, authority or discretion and the
Security Agent may refrain from acting unless and until it receives those instructions or that
clarification.
(iii)
Any instructions given to the Security Agent by the Relevant Instructing Group shall
override any conflicting instructions given by any Bondholder and will be binding on all the
Bondholders.
(iv)
Paragraph (i) above shall not apply:
(v)
(A)
where a contrary indication appears in these Terms and Conditions;
(B)
where these Terms and Conditions require the Security Agent to act in a specified
manner or to take a specified action; or
(C)
in respect of any provision which protects the Security Agent's own position in its
personal or other capacity as opposed to its role of the Security Agent.
In exercising any discretion to exercise a right, power or authority under the Bond
Documents where either:
(A)
it has not received any instructions as to the exercise of that discretion; or
(B)
the exercise of that discretion is subject to paragraph (c)(iv) above,
the Security Agent shall do so having regard to the interests of all the Bondholders.
The Security Agent may refrain from acting in accordance with any instructions of the Relevant
Instructing Group until it has received in its discretion any indemnification and/or security for any
cost, loss or liability (together with any applicable VAT) that it may incur in complying with those
instructions.
Without prejudice to the provisions of Clause 4.4(d) (Enforcement of Security) and the remainder of
this Clause 4.4(c), in the absence of instructions, the Security Agent may act (or refrain from acting)
as it considers in its discretion to be appropriate.
49
Each Obligor acknowledges that the Issuer is not obliged to verify or examine whether the Security
Agent exercises or refrains from exercising in a manner set out in the relevant instruction given to it
by the Relevant Instructing Group or whether the relevant instruction was given to it by the Relevant
Instructing Group properly.
Each Obligor irrevocably and unconditionally waives any claims it may have against the Security
Agent in connection with the fact that the Security Agent exercised or refrained from exercising in a
manner different than set out in the relevant instruction given to it by the Relevant Instructing Group
or the Security Agent exercised or refrained from exercising in the situation where the relevant
instruction has not been given to it by the Relevant Instructing Group properly.
(d)
Enforcement of Security and other resolutions
The Bondholders will not have any own direct rights under the Security Documents and will not be able
to exercise any independent power to enforce any of the Security or to exercise any rights, remedies,
discretions or powers or to grant any consents or releases relating to the Security or otherwise have direct
recourse to any of the Security. In addition, none of the Bondholders will be entitled to act individually
to require the Security Agent to take any action or proceedings under or in relation to the Security.
In the case of an Event of Default, the Security Agent will in its own full discretion, whilst acting in good
faith and in the best interests of the Bondholders, choose a suitable method of enforcement or other action
available under applicable laws in respect of the Security. Prior to the Security Agent commencing
enforcement or taking any other action in respect of all or part of the Security, the Security Agent must
request the Issuer to convene the Meeting under Clause 13.1(b)(iv) of these Terms and Conditions. The
Meeting will decide whether the Security Agent shall commence enforcement of the Security or take any
other action in respect of the Security (the Enforcement Decision). The Enforcement Decision must be
passed by the Relevant Instructing Group (such decision a decision of the Relevant Instructing Group),
and shall include the method of enforcement of the Security in accordance with applicable laws. The
Enforcement Decision is binding upon the Security Agent and all Bondholders.
The Security Agent shall inform the Bondholders on the status of the enforcement of the Security and
provide them with the copies of all material documents related to such enforcement in accordance with
the rules set out in the Enforcement Decision.
Unless the Security Agent fails to enforce a Security Agent Claim within a reasonable time after its due date,
the Bondholders may not take any action to enforce the corresponding Bondholders Claim unless requested
to do so by the Security Agent. Each Bondholder must, at the request of the Security Agent, perform any act
required in connection with the enforcement of any part of the Security Agent Claim. This includes joining
in any proceedings as co-claimant with the Security Agent.
If the Security Agent returns to any Obligor, whether in any kind of insolvency proceedings or otherwise,
any recovery in respect of which it has made a payment to the Bondholder, that Bondholder must repay
an amount equal to that recovery to the Security Agent.
(e)
Application of proceeds
The Security Agent will agree and undertake in the Agency Agreement to pay to the Bondholders any
proceeds, resulting from the enforcement of the Security, recovered as the Security Agent Claim or which
have otherwise been recovered by the Security Agent in connection with the Bonds Documents. Such
proceeds shall be applied in the following order:
(i)
first, in or towards discharging pro rata all fees of the Security Agent in the amount of 0.75
per cent. of the total amount of proceeds from the enforcement of the Security and any costs
and expenses incurred by the Security Agent, or by any person appointed by the Security
Agent, in each case in relation to the enforcement of the Security, capped at 2.75 per cent. of
50
the total amount of proceeds from the enforcement of the Security, unless such costs and
expenses have been otherwise recovered by the Security Agent or any other person acting on
its behalf;
(ii)
second, on a pro rata basis (A) in or towards payment of any principal and accrued interest
due but unpaid under the relevant Bonds Documents or Bonds and owed to any Bondholder
and (B) in setting aside the aggregate amount of the sums (including accrued interest due but
unpaid) that may become payable in the future under the relevant Bonds Documents or the
Bonds in connection with any of the claims of the Bondholders the exact amount of which
cannot be finally determined and which may not be covered by future recoveries, as notified
by the Bondholders to the Security Agent in writing;
(iii)
third, in or towards payment pro rata of any other amount due but unpaid under any
obligation secured by the Security and owed to any Bondholder;
(iv)
fourth, in payment to any other person if and to the extent the Security Agent having
received proceeds from the relevant Security is obliged by law to make such payment in
priority to any security provider; and
(v)
fifth, in payment to the relevant security provider.
The Security Agent will calculate the shares of each Bondholder in the proceeds to be distributed in the order
above and notify the Bondholders of such shares and the corresponding amounts.
(f)
Release of Security and Guarantees
After Enforcement Decision
Upon the occurrence of an Enforcement Decision, the Security Agent has the power to release Security
Interest over an asset which is the subject of any Security if:
(i)
the Security Agent (acting on the instructions or with the consent of the Relevant Instructing
Group) sells or otherwise disposes of such asset;
(ii)
the relevant security provider concerned sells or otherwise disposes of such asset at the
request of the Security Agent (acting on the instructions or with the consent of the Relevant
Instructing Group); or
(iii)
a receiver sells or otherwise disposes of such asset with the consent of the Security Agent
(acting on the instructions or with the consent of the Relevant Instructing Group),
provided the proceeds from such sale or disposal are to be applied in the manner as described above
(see above Application of Proceeds).
(g)
Specific Compensation
Each Bondholder shall (to the extent to which the liabilities due to it bear to the aggregate of the
liabilities due to all the Bondholders for the time being (or, if the liabilities due to the Bondholders
are zero, immediately prior to their being reduced to zero)), reimburse the Security Agent, within
three Business Days of demand, for any cost, loss or liability incurred by it (otherwise than by
reason of the Security Agent's gross negligence or wilful misconduct) when acting as Security Agent
under, or excercising any authority conferred under, the Terms and Conditions or the Security
Documents (unless the relevant Security Agent has been reimbursed by the Issuer, the Guarantor or
the Security Provider pursuant to the Terms and Conditions or a Security Document).
51
5.
Negative Pledge and other Covenants
5.1
Negative Pledge
So long as any payment obligations under or in connection with the Bonds remain outstanding, neither the
Issuer nor the Guarantor will, and the Issuer and the Guarantor undertake that nor their Subsidiary will,
create or permit to subsist any Security Interest (as defined in Article 16 of these Terms and Conditions) over
any of its assets (other than assets subject to the Security) to secure any Relevant Debt (as defined in Article
16 of these Terms and Conditions) unless:
(a)
the Issuer's and Guarantor's obligations under the Bonds Documents will remain to be secured in
accordance with these Terms and Conditions and shall continue to rank either pari passu or senior
with such Relevant Debt, or
(b)
otherwise as approved by the meeting of the Bondholders in accordance with Article 13 of these
Terms and Conditions.
If the conditions set out in (a) or (b) above are fulfilled, any new Security Interest may be created by the
abovementioned entities freely, without any consent of the Bondholders (or the meeting of Bondholders) and
with no obligation of the Issuer, the Guarantor or any MCI Group company to provide any additional
security of the Bonds and shall not constitute a breach of any obligations relating to the Bonds.
For the purposes of this section:
(i)
obligations under the Bonds shall continue to “rank pari passu or senior” with the Relevant
Debt if the obligations arising from the Bonds are not subordinated to the Relevant Debt, by
contract or otherwise and,
(ii)
the obligations arising from the Bonds shall be considered subordinated to the Relevant Debt
if by contract or otherwise the obligations arising from the Bonds cannot be repaid in full
until the obligations arising from the Relevant Debt are repaid in full.
For avoidance of any doubts, any Security Interest may be created to secure any Relevant Debt with a
maturity date falling before the Final Redemption Date.
5.2
Limitation on Indebtedness
Neither the Issuer nor the Guarantor will, and each of the Issuer and the Guarantor undertakes that none of
its Subsidiaries will, incur, assume guarantee for, or otherwise become liable for any Indebtedness unless:
(a)
the ratio of the Indebtedness to the Assets Value (as defined in Article 16 of these Terms and
Conditions) for the Guarantor's most recently ended full fiscal quarter for which there are available
financial statements that immediately precede the date on which such additional Indebtedness is
incurred, after reflecting the Indebtedness on a pro forma basis, does not exceeded 50% at the date of
such incurrence (if the Guarantor is not obliged to prepare consolidated financial statements
according to IFRS, then the Guarantor's standalone financial statements will be used); and
(b)
there is no Event of Default and no Event of Default may occur as a result of such Indebtedness.
5.3
Limitation on Mergers
Neither the Issuer nor the Guarantor will, and each of the Issuer and the Guarantor undertake that nor their
Subsidiaries will, enter into any amalgamation, demerger, merger or corporate reorganisation (the Merger)
unless (i) at the time of such Merger, the ratio of the Indebtedness to Assets Value will not exceed 50%,
(ii) there is no Event of Default and no Event of Default may occur as a result of such Merger and (iii) the
52
successor company is incorporated in the EEA, Switzerland, Canada or the U.S.A. In addition, in the case of
the Merger involving the Issuer or the Guarantor, the surviving entity has to assume all outstanding
obligations arising from and in connection with the Bonds Documents.
5.4
Limitation on Distribution Payments
Neither the Issuer nor the Guarantor may propose to declare, make or pay any dividend, charge, fee or other
distribution (or interest on any unpaid dividend, charge, fee or other distribution), whether in cash or in kind,
in respect of its share capital (the Distribution) unless (i) at the time of such Distribution, Indebtedness to
Assets Value will not exceed 60% and (ii) there is no Event of Default and no Event of Default may occur
as a result of such Distribution.
5.5
Reporting of the Guarantor
If the Guarantor's shares cease to be listed on a European regulated market, it will continue to provide the
information to the Bondholders to the same extent and at the same times as required by the rules
of the European regulated market on which the Guarantor's shares ceased to be listed.
6.
Interest
6.1
Method of Interest Calculation, Interest Period
The Bonds will bear the floating interest rate equal to (i) the Reference Rate (see definition below in this
Article 6.1) valid for the relevant Interest Period (see definition below in this Article 6.1) and determined
by the Calculation Agent on the Reference Rate Determination Date (see definition below in this Article 6.1)
plus (ii) the margin of 3.8 per cent. p.a. The interest will be paid semi-annually in arrears, on 8 April and 8
October (the Interest Payment Dates). The first Interest Payment Date will be 8 October 2016.
Reference Rate means 6M PRIBOR; 6M PRIBOR means the interest rate in per cent. p.a. offered
for the Czech crown that is quoted in "Reuters Screen Service" PRBO page (or any other official source
where such rate will be quoted) as the value of the Prague interbank offer rate for Czech crown interbank
deposits for the 6-month period set out by the Czech National Bank and valid on the Reference Rate
Determination Date. If PRIBOR is not quoted in the aforementioned PRBO page (or other official source)
for the relevant 6-month period, then the Calculation Agent will determine 6M PRIBOR from (i) PRIBOR
for the nearest longer period for which PRIBOR is quoted in the aforementioned PRBO page (or other
official source) and (ii) PRIBOR for the nearest shorter period for which PRIBOR is quoted on the
aforementioned PRBO page (or other official source), as the average of the two.
If 6M PRIBOR cannot be determined on any day according to the preceding paragraph, then the Calculation
Agent will determine 6M PRIBOR on such day as the arithmetic mean of the interest rates quoted for the
sale of Czech crown interbank deposits for such period that corresponds to the relevant 6-month period and
the relevant amount obtained on such day after 11:00 (eleven) a.m. Prague time from at least 3 (three) banks
operating in the Prague interbank market selected by the Calculation Agent at its sole discretion. If 6M
PRIBOR cannot be determined in this manner, then it will be equal to the 6M PRIBOR determined
in accordance with the precedent paragraph on the nearest previous Business Day when 6M PRIBOR was
determinable in such a manner.
If the interest rate determined in accordance with this paragraph 6.1 is below zero (i.e. the total of the
Reference Rate and the margin), the interest rate will be deemed to be zero.
For the avoidance of doubt, if PRIBOR is cancelled or ceases to be generally used in the market
for interbank deposits due to the accession of the Czech Republic to the European Monetary Union, the rate
that will be generally used in the market for interbank deposits in the Czech Republic will be used instead
of PRIBOR.
53
Reference Rate Determination Date means the date as of which the Reference Rate for the relevant Interest
Period is determined. The Reference Rate Determination Date for the relevant Interest Period will be the 2nd
(second) Business Day before the first day of such Interest Period.
For the purposes of these Terms and Conditions, Interest Period means the period from (and including)
the Issue Date to (but excluding) the first Interest Payment Date, and each immediately following period
from (and including) the Interest Payment Date to (but excluding) the next Interest Payment Date until
the maturity date of the Bonds (as specified in Article 7.1 below). The Interest Payment Date will not be
adjusted according to the Business Day Convention (see Article 8.3 of these Terms and Conditions).
The Calculation Agent will round the interest rate for each Interest Period on the basis of mathematical rules
to two decimal places according to the third decimal place. The Calculation Agent will notify the Fiscal and
Paying Agent of the interest rate applicable to each Interest Period promptly after its determination and
the Fiscal and Paying Agent will in turn communicate without any undue delay such interest rate
to the Bondholders in accordance with Article 14 of these Terms and Conditions.
The interest will accrue evenly from the first day of each Interest Period to the last day included in such
Interest Period at the interest rate set out in this Article 6.1 above.
The amount of interest accrued on 1 (one) Bond will be calculated as a multiple of the outstanding nominal
value of such Bond, the relevant interest rate (expressed in decimal form) and the relevant day count fraction
as determined according to Article 6.3 of these Terms and Conditions.
6.2
End of Interest Accrual
The Bonds will cease to bear interest on the Final Redemption Date (as this term is defined in Article 7.1
of these Terms and Conditions) or on the Early Redemption Date (as this term is defined in Articles 10.1,
10.2, 13.4(a) and 13.4(b) of these Terms and Conditions), unless the payment of any due amount
is unlawfully retained or refused by the Issuer although all relevant conditions and requirements for payment
on the Final Redemption Date or the Early Redemption Date have been complied with. In such event,
interest will continue to accrue at the interest rate set out in Article 6.1 above until the earlier of (i) the date
on which all amounts due and payable as of that date in accordance with these Terms and Conditions are
paid to the Bondholders or (ii) the date on which the Fiscal and Paying Agent notifies the Bondholders that it
has received all amounts payable in connection with the Bonds, unless any additional unlawful retention or
refusal of payments occurs after such notice.
6.3
Day Count Convention for Interest Calculation
The interest payable on the Bonds for a period of less than 1 (one) year will be calculated on the basis
of an Act/365 day count convention, i.e., the actual number of days in the period for which the interest
is calculated divided by 365.
6.4
Interest Accrual following a Write Down
Following a Write Down as described above in clause 4.1 (Basic Security Mechanics), interest will accrue
on the reduced outstanding nominal value of each Bond from (and including) the relevant Write Down Date.
7.
Redemption and Purchase of the Bonds
7.1
Final Redemption
Unless previously redeemed or purchased by the Issuer and cancelled as specified below, the outstanding
nominal value of the Bonds will be redeemed in a single payment on 8 April 2021 (the Final Redemption
Date).
54
7.2
Early redemption at the option of the Bondholders
The Bondholders are not entitled to require early redemption of the Bonds before the Final Redemption
Date, except for early redemption pursuant to Articles 10.1, 10.2, 13.4(a) and 13.4(b) of these Terms and
Conditions. In such events, the Issuer will repay the nominal values of the relevant Bonds together with
accrued and outstanding interest in accordance with these Terms and Conditions.
7.3
Early Repayment at the option of the Issuer
The provisions of Article 8 of these Terms and Conditions also apply to the Redemption and Purchase of the
Bonds under this Article 7.
7.4
Purchase of the Bonds
The Issuer is entitled to purchase the Bonds at any time on the market or otherwise at any price.
7.5
Cancellation of the Bonds
The Bonds purchased by the Issuer will not be cancelled, unless decided otherwise by the Issuer. If the Issuer
does not decide on the cancellation of the Bonds purchased by it, it will be entitled to dispose of such Bonds
at its sole discretion.
8.
Payment Terms
8.1
Currency of Payments
The Issuer undertakes to pay interest on and repay the nominal value of the Bonds solely in Czech crowns,
or in any other lawful currency of the Czech Republic that might replace the Czech crown. The interest will
be paid to the Bondholders and the nominal value of the Bonds will be repaid subject to and in accordance
with these Terms and Conditions, and the tax, foreign exchange and other applicable laws of the Czech
Republic in effect at the time of the relevant payment.
In the event that the Czech crown in which the Bonds are denominated and in which the payments relating
to the Bonds should be made in compliance with these Terms and Conditions ceases to exist and is replaced
by the Euro currency, (i) the denomination of such Bonds will be changed to Euro in conformity with
the applicable laws, and (ii) all monetary liabilities arising from such Bonds will automatically and without
any further notice to the Bondholders be payable in Euro, with the official rate (i.e. the fixed conversion
ratio) in accordance with the applicable law being used as the exchange rate between Czech crown (CZK)
and euro (EUR). Such replacement of the Czech crown (i) will not, in any respect, affect the existence
or enforceability of the Issuer's liabilities under the Bonds, and (ii) for the avoidance of doubt, will not be
deemed to constitute any change to these Terms and Conditions or an Event of Default under these Terms
and Conditions.
8.2
Payment Date
The payment of interest on and the repayment of the nominal value of the Bonds will be made by the Issuer
through the Fiscal and Paying Agent on the dates specified in these Terms and Conditions (each such date
being hereinafter referred to, according to its meaning, as the Interest Payment Date or the Final
Redemption Date or the Early Redemption Date or also as the Payment Date).
8.3
Business Day Convention
If any Payment Date falls on a day that is not a Business Day, such Payment Date will instead fall on the
next following Business Day, and the Issuer will not be obliged to pay any interest or any other additional
55
charges by reason of such delay in payment resulting from the application of any Business Day convention
(the Business Day Convention).
8.4
Determination of the Right to Receive Payments Related to the Bonds
The authorised persons to whom the Issuer will pay interest on the Bonds will be persons stated in the
Extract from the Issue Registry as of the end of business on the relevant Record Date for Interest Payment
(the Authorised Persons).
Record Date for Interest Payment is a day falling 30 (thirty) days prior to the relevant Interest Payment
Date; however, for the purposes of determining the Record Date for Interest Payment, the Interest Payment
Date will not be adjusted according to the Business Day Convention.
The Ex-Coupon Date will be the date immediately following the Record Date for Interest payment. For the
purposes of determining the recipient of interest, neither the Issuer nor the Fiscal and Paying Agent will take
account of the transfer of any Bonds made on or after the calendar day on which the Ex-Coupon Date
in respect of such payment falls.
The Authorised Persons to whom the Issuer will repay the nominal value of the Bonds will be persons stated
in the Extract from the Issue Registry as of the end of business on the relevant Record Date for Nominal
Value Repayment (the Authorised Persons).
Record Date for Nominal Value Repayment is a day falling 30 (thirty) days prior to the relevant Final
Redemption Date or the Early Redemption Date; however, for the purposes of determining the Record Date
for Nominal Value Repayment, such Payment Date will not be adjusted according to the Business Day
Convention.
The Ex-Principal Date shall be the date immediately following the Record Date for Nominal Value
Repayment. For the purposes of determining the recipient of the nominal value of the Bonds, neither the
Issuer nor the Fiscal and Paying Agent will take account of the transfer of any Bonds made on or after the
calendar day on which the Ex-Principal Date falls.
8.5
Payments
The Fiscal and Paying Agent will make payments to the Authorised Persons by means of wire transfer
to their accounts kept with a bank in the Czech Republic according to the instruction that the respective
Authorised Person delivers to the Fiscal and Paying Agent in a credible manner at the address of the Fiscal
and Paying Agent's Specified Office. The instruction will be in the form of a signed written statement with
an officially legalised (notarized) signature or signatures containing sufficient details of such account
to allow the Fiscal and Paying Agent to make the payment and will be accompanied by an original
or officially certified copy of a certificate of tax domicile of the recipient of the relevant payment (payee) for
the relevant tax period and, in the event that the payee is a legal entity, also by an original or officially
certified copy of a valid extract from the Commercial Register in respect of the payee not older than 3 (three)
months (such instruction together with the extract from the Commercial Register (if applicable) and the
certificate of tax domicile and any other relevant schedules, is also referred to as the Instruction). Any
originals of foreign official instruments or any deeds notarized abroad must be super-authenticated or
certificated by the Hague Convention Apostille (whichever is relevant). The Instruction must be in a form
and content reasonably acceptable to the Fiscal and Paying Agent and the Fiscal and Paying Agent may
require satisfactory evidence that the person who has signed the Instruction is authorised to sign such
Instruction on behalf of the Authorised Person. Such evidence must be delivered to the Fiscal and Paying
Agent together with the Instruction. In this respect, the Fiscal and Paying Agent may require, without
limitation, (i) the presentation of a power of attorney if the Authorised Person is represented by an agent (if
necessary with an official Czech translation) and (ii) an additional confirmation of the Instruction by the
Authorised Person. Notwithstanding the foregoing, neither the Fiscal and Paying Agent nor the Issuer will be
obliged to examine the correctness, completeness or authenticity of any such Instruction in any manner
56
whatsoever and neither of them will be liable for any damage incurred in connection with any delay in the
delivery of such Instruction by the Authorised Person or with the delivery of an incorrect or otherwise
defective Instruction. The Instruction will be deemed properly made if it contains all the items required by
this Article, is delivered to the Fiscal and Paying Agent in accordance with this Article and complies with the
requirements of this Article in all other respects. Upon the Issuer's request, the Fiscal and Paying Agent shall
provide the Issuer with other information as set out in the Agency Agreement, if any.
The Instruction will be deemed filed in a timely manner if it is delivered to the Fiscal and Paying Agent
not later than 15 (fifteen) Business Days before the relevant Payment Date.
The Issuer's liability to pay any amount due in connection with the Bonds will be deemed discharged
in a due and timely manner, if the relevant amount has been remitted to the Authorised Person in compliance
with a proper Instruction pursuant to this Article 8.5 and if such amount is credited to the account of the
Authorised Person's bank with the clearing centre of the Czech National Bank not later than on the relevant
due date.
Neither the Issuer nor the Fiscal and Paying Agent will be liable for any delay in the payment of any amount
due caused by the Authorised Person, e.g. by its failure to deliver a proper Instruction in a timely manner.
If any Authorised Person fails to deliver to the Fiscal and Paying Agent in time a proper Instruction under
this Article 8.5 of these Terms and Conditions, it will have no right to receive either from the Fiscal and
Paying Agent or the Issuer any interest or any other payment on account of such delay if (i) the relevant
amount has been remitted to the Authorised Person in accordance with a proper Instruction pursuant to this
Article 8.5 of these Terms and Conditions and (ii) such amount has been debited from the Fiscal and Paying
Agent's account not later than 15 (fifteen) Business Days following the day on which the Fiscal and Paying
Agent received the proper Instruction.
Neither the Issuer nor the Fiscal and Paying Agent will be liable for any damage incurred by (i) the failure
to deliver in time the proper Instruction or any other documents or information required to be delivered
under this Article 8.5, or (ii) such Instruction or any related document or information being incorrect,
incomplete or untrue, or (iii) circumstances beyond the control of the Issuer or the Fiscal and Paying Agent.
No Authorised Person will be entitled in any such event to receive any additional payment, other
compensation or interest for any such delay in the relevant payment.
8.6
Change in the Payment Method
The Issuer and the Fiscal and Paying Agent are jointly entitled to change the payment procedure, provided
such change does not affect the Bondholders' status or interests. The Bondholders will be notified of such
change in the same manner as set out in Article 14 of these Terms and Conditions.
9.
Taxation
The repayment of the nominal value of, and payments of interest on, the Bonds will be made without
deduction of any taxes or charges of any nature whatsoever, unless such deduction is required by applicable
laws in effect on the date of the relevant payment. If any such deduction of taxes or charges is required
by the applicable laws in effect on the date of such payment, the amount of repayment of the nominal value
of, and any payment of interest on, the Bonds will be paid by the Issuer less the amount of any such
deduction of taxes or charges, and the Issuer will not be obliged to pay to the Bondholders any additional
amounts as compensation for such deduction of taxes or charges.
10.
Early Redemption of the Bonds upon the Occurrence of Events of Default
10.1
Events of Default
If any of the following events occurs and is continuing (each an Event of Default):
57
(a)
Change of Control
(i)
If Mr. Tomasz Czechowicz ceases to own, directly or indirectly, 40 per cent. or more of the
issued ordinary share capital of the Guarantor or voting rights in the Guarantor (the
Guarantor's Change of Control); or
(ii)
If:
(A)
Sub-fund MCI.EuroVentures 1.0.,
(B)
any member of the capital group directly or indirectly controlled by Mr. Tomasz
Czechowicz or in which Mr. Tomasz Czechowicz directly or indirectly holds more
than 50% of investment certificates, or
(C)
any member of the capital group to which belongs any investment fund managed by
the MCI Capital Towarzystwo Funduszy Inwestycyjnych S.A. or Private Equity
Managers S.A.
ceases to own, directly or indirectly, 50 per cent. or more of the issued ordinary share capital of the
Issuer or voting rights in the Issuer (the Issuer's Change of Control and together with the
Guarantor's Change of Control the Change of Control); or
(b)
Payment default
Any payment in connection with the Bonds is not made in accordance with these Terms and
Conditions unless such default has been caused solely by technical or administrative error on the part
of the Issuer or the Guarantor and such default is remedied for more than 5 (five) Business Days of
the due date; or
(c)
Failure to perfect the Security
The Issuer or the Security Provider does not register or perfect the pledge over: (i) the Initial Pledged
Shares in the relevant registers in 20 Business Days following the Issue Date or (ii) the Issuer, the
Security Provider or any other MCI Group company, MCI.EV or any MCI.EV Subsidiary does not
register or perfect the pledge over the Additional Pledged Shares or the Additional Share Security in
the relevant registers in 35 Business Days following the Testing Date on which the Security Limit
has been breached; or
(d)
Breach of Security Limit
The Security Limit is breached and not remedied by expiration of the thirty-five (35) Business Day
cure period set out in Article 4.1 (Basic Security Mechanics) of these Terms and Conditions.
(e)
Breach of other obligations
The Issuer or the Guarantor fails to fulfil or to comply with any obligation relating to the Bonds
other than payment obligation under these Terms and Conditions and the Guarantee and, if capable
of remedy, such default is not remedied for more than 45 (forty-five) Business Days of the date
when the Issuer or the Guarantor was notified of such fact by any Bondholder by means of a letter
delivered to the Issuer or to the address of the Fiscal and Paying Agent's Specified Office; or
(f)
Cross-default
Any other liability or liabilities related to the Indebtedness of the Issuer or the Guarantor or any of
its Subsidiaries exceeding 5 per cent. of the Assets Value and is not duly paid by 25 (twenty five)
58
calendar days of its due date or within any applicable grace period, unless the Issuer, the Guarantor
or any of its Subsidiaries in good faith legally contests such liability as to its amount or title and
makes the payment within the period set by a final judgment of the relevant court or other authority
that ordered such payment; or
(g)
Insolvency
The Issuer or the Guarantor, under the laws of any jurisdiction where, at the relevant time, either the
Issuer or the Guarantor has its centre of main interest, registered office or seat, or, subject to the
below, either the Issuer or the Guarantor has any assets or business activities, (i) becomes insolvent,
(ii) an administrator or liquidator of the Issuer or the Guarantor is appointed, (iii) issues any decision
on readjustment or deferment of its obligations generally or makes a general assignment, an
arrangement or composition with or for the benefit of its creditors or declares a moratorium
concerning any of its indebtedness, (iv) is declared bankrupt by any court or (v) an application for
the declaration of bankruptcy of the Issuer or the Guarantor is refused by any court on the sole
grounds that the Issuer or the Guarantor has insufficient assets from which to meet the costs and
expenses of any bankruptcy proceedings. If the above proceedings or actions are taken in the
jurisdiction where the Issuer or the Guarantor has only assets or business activities, commencing
such proceedings or action in that jurisdictions will constitute an Event of Default if the Issuer or the
Guarantor has in that jurisdiction more than 5% of its assets measured against the latest financial
statements; or
(h)
Liquidation
A legally effective and non-appealable order is issued by the relevant Polish court or a legally
effective and non-appealable resolution is passed for the winding up, liquidation or dissolution of the
Issuer or of the Guarantor; or
(i)
Termination of business activities
The Issuer or the Guarantor discontinues its core business activities or loses the license to carry on
its core business activities; or
(j)
Delisting of the Bonds from the regulated market
The Bonds cease to be admitted to trading on the Regulated Market of the Prague Stock Exchange
(in Czech: Burza cenných papírů Praha, a.s.), any European regulated market that would supersede
the Regulated Market of the Prague Stock Exchange or any other European regulated market
to which the Bonds would be admitted to trading following the Issue Date; or
(k)
Discharge or termination of the Security
The Security or any of its provisions, at any time, for any reason (other than caused by the Security
Agent), ceases to be, or is claimed by the Issuer, the Security Provider or any party providing the
Security not to be, in full force and effect; or
(l)
Discharge or termination of the Guarantee
The Guarantee or any of its provisions, at any time, for any reason (other than caused by the
Bondholders), ceases to be, or is claimed by the Guarantor not to be, in full force and effect; or
(m)
Illegality
59
The Issuer's obligations under the Bonds (except for the obligations arising from the Parallel Debt)
or its performance by the Issuer cease to be partially or fully legally enforceable or become in breach
of applicable laws; or
(n)
Delisting of any shares in ABC Data
Any shares in ABC Data, which have been provided as the Security in favour of the Security Agent,
cease to be admitted to trading on any European regulated market, unless remedied by virtue of the
Write Down or the Additional Share Security in accordance with these Terms and Conditions;
then any Bondholder, at its discretion, by a written notice addressed to the Issuer and delivered to the Fiscal
and Paying Agent at the address of the Specified Office (the Early Redemption Notice), may request early
redemption of the Bonds held by such Bondholder which the Bondholder undertakes not to dispose of since
that moment, plus any accrued and unpaid interest thereon pursuant to Article 6.1 of these Terms and
Conditions, as at the Early Redemption Date (as this term is defined below), and the Issuer is obliged
to redeem such Bonds (together with accrued and undistributed interest thereon) in accordance with Article
10.2 of these Terms and Conditions.
10.2
Maturity of the Accelerated Bonds
Any and all amounts payable by the Issuer to any Bondholder according to foregoing Article 10.1 of these
Terms and Conditions will become due and payable as of the last Business Day of the month following
the month in which the Bondholder delivered the relevant Early Redemption Notice for the Issuer to the
Specified Office of the Fiscal and Paying Agent (the Early Redemption Date).
10.3
Withdrawal of Early Redemption Notice
A Bondholder may withdraw, in writing, the Early Redemption Notice but only with respect to the Bonds
held by such Bondholder and only if such withdrawal is addressed to the Issuer and delivered to the Fiscal
and Paying Agent at the address of the Specified Office before the relevant amounts become due and payable
according to preceding Article 10.2 of these Terms and Conditions. However, any such withdrawal of the
Early Redemption Notice will not affect any Early Redemption Notices given by the other Bondholders.
10.4
Other Conditions for Early Redemption of the Bonds
The provisions of Article 8 of these Terms and Conditions will apply mutatis mutandis to the early
redemption of the Bonds pursuant to this Article 10.
11.
Statute of Limitations
All rights connected with the Bonds will become statute-barred upon the expiration of (ten) years since the
day when such rights could be exercised for the first time.
12.
Fiscal and Paying Agent, Security Agent, Calculation Agent and Listing Agent
12.1
Fiscal and Paying Agent
(a)
Fiscal and Paying Agent and Specified Office
Česká spořitelna, a.s. will act as the Fiscal and Paying Agent. The Fiscal and Paying Agent's
specified office and place of payment (the Specified Office) will be at the following address:
Evropská 2690/17
160 00 Prague 6
60
Czech Republic
(b)
Additional and Other Fiscal and Paying Agent and Specified Office
The Issuer reserves the right to appoint, at any time, an additional or other Fiscal and Paying Agent
and to designate an additional or other Specified Office, or to appoint additional payment providers,
provided such change does not affect the Bondholders' status or interests.
The Issuer will give notice of such change of the Fiscal and Paying Agent or Specified Office or of
the appointment of additional payment providers to the Bondholders in the manner set out in Article
14 of these Terms and Conditions. Any such change will become effective upon the expiration of 15
(fifteen) calendar days following the date of such notice unless the notice specifies a later date. In
any event, any such change that would otherwise become effective before the Payment Date for any
amount payable under the Bonds or in less than 30 (thirty) calendar days after the Payment Date for
any amount payable under the Bonds, will become effective on the 30th (thirtieth) day following
such Payment Date.
(c)
Relationship between the Fiscal and Paying Agent and Bondholders
Unless provided otherwise by law or by the Agency Agreement, the Fiscal and Paying Agent will act
as an agent of the Issuer when performing the duties of a Fiscal and Paying Agent under the Agency
Agreement, providing no guarantee or security for the Issuer's liabilities under the Bonds, and will
be in no legal relationship with the Bondholders in such position.
12.2
Security Agent
Unless there is a change pursuant to the Article 4.3 of these Terms and Conditions, Česká spořitelna, a.s.,
will be the Security Agent.
12.3
Calculation Agent
(a)
Calculation Agent
Česká spořitelna, a.s., will be the Calculation Agent.
(b)
Additional and other Calculation Agent
The Issuer reserves the right to appoint another or additional Calculation Agent, provided such
change does not affect the Bondholders' status or interests. If a change of the Calculation Agent
occurs, the Issuer will notify the Bondholders of such change in the manner set out in Article 14 of
these Terms and Conditions and any such change will become effective upon the expiration of 15
(fifteen) calendar days following the day of such notice unless a later effective date is set out in such
notice. In any case, any change that would otherwise become effective before or less than fifteen
(15) calendar days after the date when the Calculation Agent is required to make any calculation in
connection with the Bonds, such change will become effective on the 15th (fifteenth) calendar day
following the date when the Calculation Agent was required to make such calculation.
(c)
Relationship between the Calculation Agent and the Bondholders
The Calculation Agent acts as the Issuer's agent and has no legal relationship with the Bondholders.
12.4
Listing Agent
(a)
Listing Agent
Česká spořitelna, a.s., will be the Listing Agent.
61
(b)
Additional and other Listing Agent
The Issuer reserves the right to appoint another or additional Listing Agent, provided such change
does not affect the Bondholders' status or interests. If a change of the Listing Agent occurs, the
Issuer will notify the Bondholders of such change in the manner set out in Article 14 of these Terms
and Conditions and any such change will become effective upon the expiration of 15 (fifteen)
calendar days following the day of such notice unless a later effective date is set out in such notice.
(c)
Relationship between the Listing Agent and the Bondholders
The Listing Agent acts as the Issuer's agent and has no legal relationship with the Bondholders.
13.
Bondholders' Meeting
13.1
Authority and Convocation of the Meeting
(a)
Right to Convene the Bondholders' Meeting
The Issuer or any Bondholder(s) may convene a meeting of the Bondholders (the Meeting)
in accordance with these Terms and Conditions and applicable laws if so required to decide
on common interests of the Bondholders. The costs of organising and convening the Meeting will
be borne by the person who convened the Meeting, unless set out otherwise by law. The costs related
to the attendance at the Meeting will be borne by each participant itself. If the convening person
is one or more Bondholders, such persons will be required, not later than on the date on which a
notice of the Meeting is published (see Article 13.1(c) of these Terms and Conditions), (i) to deliver
to the Fiscal and Paying Agent a request for procuring evidence of the number of all Bonds in the
relevant Issue entitling the holder(s) to attend the Meeting convened by a Bondholder or the
Bondholders, i.e. the Extract from the Issue Registry, and (ii) where relevant, to pay to the Fiscal and
Paying Agent an advance to cover the costs associated with its services in relation to the Meeting.
The due and timely delivery of the request under item (i) above and the payment of the advance for
the costs referred to in item (ii) above are the prerequisites for the valid convocation of the Meeting.
(b)
Meeting Convened by the Issuer
The Issuer is obliged to promptly convene the Meeting and request the Bondholders to take a stand
on the following issues (each of them the Material Change):
(i)
the Issuer's proposal for any amendment to these Terms and Conditions that requires
the Bondholders' consent under applicable laws;
(ii)
the Issuer's proposal for its transformation;
(iii)
the Issuer's proposal for entering into an agreement on the sale of a business enterprise
or any part thereof, irrespective of which party to such agreement is the Issuer, with the
entity which is not a member of the (i) MCI Group, (ii) Tomasz Czechowicz Group or (iii)
PEM Group or (iv) MCI TFI Group or (v) Investment Fund Group, if the due and timely
redemption of the Bonds or the distribution of interest thereon may be jeopardized;
(iv)
the Issuer's default in the satisfaction of any rights (including an occurrence of an Event
of Default) attached to the Bonds which continues for more than 7 (seven) days following
the day on which the relevant right could be exercised; and
(v)
the Issuer's proposal for filing an application to withdraw the Bonds from trading
on the Prague Stock Exchange or other European regulated market.
62
The Issuer may convene the Meeting to propose a collective action if it has knowledge that any
Event of Default has occurred or may occur.
For avoidance of any doubt, the Issuer is not obliged to convene the Meeting if a material change
within the meaning of Section 21(1) of the Czech Bonds Act occurs unless such material change also
represents the Material Change as defined in this Article 13.1(b).
(c)
Notice of the Meeting
The Issuer is obliged to give notice of the Meeting in a manner set out in Article 14 of these Terms
and Conditions not later than 15 (fifteen) calendar days prior to the date of the Meeting. If the
Meeting is convened by any Bondholder (or the Bondholders), such convening person(s) will deliver
a notice of the Meeting (containing all statutory elements) sufficiently in advance (at least
20 (twenty) calendar days prior to the proposed date of the Meeting) to the Issuer at the address
of the Specified Office. The Issuer will promptly ensure that such notice of the Meeting is published
in the manner and within the time limit specified in the first sentence of this Article 13.1(c)
(however, the Issuer is responsible neither for the content of such notice nor for any delay or default
in complying with any statutory time limits by a Bondholder who convened the Meeting). Each
notice of the Meeting must contain at least (i) the business name, identification number and
registered office of the Issuer, (ii) the identification of the Bonds, to the minimum extent the Bond
title, the Issue Date and the ISIN (or other Bond identifiers if no ISIN is available), (iii) the venue,
date and time of the Meeting, provided that the date of the Meeting must fall on a date which
is a Business Day, (iv) the agenda of the Meeting and, in the case of any proposed amendment(s)
referred to in Article 13.1(b)(i) above, the specification of the proposed amendment(s) and
justification thereof, and (v) the day that is the record (conclusive) date for the attendance at the
Meeting. The Meeting will only be authorised to adopt draft resolutions contained in the notice of
the Meeting; any other draft resolutions and matters that were not included on the proposed agenda
of the Meeting may be decided only in the presence and with the approval of all Bondholders
entitled to vote at such Meeting. If there is no more reason to convene the Meeting, the convening
person will call off the Meeting in the same manner as convened.
13.2
Persons Authorised to Attend and Vote at the Meeting
(a)
Persons Authorised to Attend the Meeting
To be entitled to attend and vote at the Meeting, a person must be a Bondholder (the Person
Authorised to Attend the Meeting) recorded as a Bondholder in the register kept by the Central
Depository and in an extract from the Bonds register provided by the Central Depository at the close
of a calendar day that is 7 (seven) days prior to the date of the relevant Meeting (the Meeting
Attendance Record Date) or a person who produces a certificate of the custodian in whose client's
account with the Central Depository the relevant number of the Bonds was recorded as of the
Meeting Attendance Record Date certifying that such person is a Bondholder and that the Bonds
held by such person are registered in the account of the custodian by reason of their custodianship.
The certificate according to the preceding sentence must be satisfactory in form and substance to the
Fiscal and Paying Agent. No transfers of the Bonds made after the Meeting Attendance Record Date
will be taken into account.
(b)
Voting Rights
Each Person Authorised to Attend the Meeting will have such number of votes out of the total
number of votes that corresponds to the ratio between the nominal value of the Bonds held by such
person as of the Meeting Attendance Record Date to the total outstanding nominal value of the Issue
as of the Meeting Attendance Record Date. No voting right will be attached to any Bonds held by
the Issuer as of the Meeting Attendance Record Date that have been early redeemed and not
cancelled by the Issuer within the meaning of Article 7.5 of these Terms and Conditions, and no
63
such Bonds will be taken into account in determining the presence of a quorum at the Meeting. If the
Meeting decides on recalling a common proxy, the common proxy (if he is a Person Authorised to
Attend the Meeting) may not exercise his voting right.
(c)
Attendance of the Meeting by Other Persons
The Issuer is obliged to attend the Meeting, either in person or by proxy. Other persons entitled
to attend the Meeting are proxies of the Fiscal and Paying Agent, the common proxy of the
Bondholders under Article 13.3(c) of these Terms and Conditions (unless he is a Person Authorised
to Attend the Meeting) and any guests invited by the Issuer or the Fiscal and Paying Agent.
13.3
Course of the Meeting; Decision-Making
(a)
Quorum
The Meeting will constitute a quorum if attended by the Persons Authorised to Attend the Meeting,
who were, as of the Meeting Attendance Record Date, holders of the Bonds the nominal value
of which represents more than 30 (thirty) per cent. of the total nominal value of the issued and
outstanding Bonds. If the Meeting decides on recalling a common proxy, any votes belonging to the
common proxy (if he is a Person Authorised to Attend the Meeting) will not be included in the total
number of votes. Before opening the Meeting the Issuer will inform, either alone or through
the Fiscal and Paying Agent, about the number of all Bonds in respect of which the Persons
Authorised to Attend the Meeting are entitled to attend and vote at the Meeting in accordance with
these Terms and Conditions.
(b)
Chairman of the Meeting
The Meeting convened by the Issuer will be presided over by a chairman appointed by the Issuer.
The Meeting convened by a Bondholder or the Bondholders will be presided over by a chairman
elected by a simple majority of votes of the attending Persons Authorised to Attend the Meeting.
Until the chairman is elected, the Meeting will be presided over by a person appointed
by the Bondholder(s) who convened the Meeting, and the election of the chairman must be the first
item on the agenda of any Meeting not convened by the Issuer.
(c)
Common Proxy
The Meeting may elect, by resolution, an individual or a legal entity to act as a common proxy.
The common proxy is authorised under the law (i) to enforce, on behalf of all of the Bondholders,
any rights associated with the Bonds to the extent specified in a resolution adopted by the Meeting,
(ii) to supervise the compliance with these Terms and Conditions by the Issuer, and (iii) to execute,
on behalf of all of the Bondholders, any other acts or protect the Bondholders' interests in the
manner and to the extent specified in a resolution adopted by the Meeting. The Meeting may recall
the common proxy in the same way in which the common proxy was elected or replace him with
a new common proxy.
(d)
Decision-Making at the Meeting
The Meeting will decide on any issues on its agenda in the form of resolutions. Any resolution that
(i) approves a proposal pursuant to Article 13.1(b)(i) of these Terms and Conditions, or (ii) appoints
or recalls a common proxy, will require the affirmative vote of at least 3/4 (three-quarters) of the
attending Persons Authorised to Attend the Meeting. Unless provided otherwise by law, any other
resolutions will require a simple majority of votes of the attending Persons Authorised to Attend the
Meeting in order to pass.
(e)
Adjourned Meeting
64
If within 1 (one) hour after the scheduled opening of the Meeting a quorum is not present, then such
Meeting will be automatically adjourned without further notice.
If the Meeting which is to decide on amendments to the Terms and Conditions pursuant
to Article 13.1(b)(i) of these Terms and Conditions does not have a quorum within 1 (one) hour after
the scheduled opening of the Meeting, the Issuer will convene, if necessary, a substitute Meeting
to be held not later than 6 (six) weeks after the scheduled date of the original Meeting. The holding
of a substitute Meeting with the unchanged agenda will be notified to the Bondholders not later than
15 (fifteen) days after the scheduled date of the original Meeting. The substitute Meeting deciding
on amendments to the Terms and Conditions according to Article 13.1(b)(i) of these Terms and
Conditions will have a quorum irrespective of the conditions for quorum set out in Article 13.3(a)
above.
13.4
Certain Additional Rights of the Bondholders
(a)
Consequence of Voting against Certain Resolutions of the Meeting
If the Meeting approved a Material Change in accordance with Article 13.1(b)(i) through (v) of these
Terms and Conditions, the Person Authorised to Attend the Meeting who, according to the minutes
of such Meeting, voted against a resolution adopted by the Meeting or failed to attend the Meeting
(the Applicant) may request the repayment of the nominal value of the Bonds, which such
Bondholder owned as of the Meeting Attendance Record Date and which will not be disposed
of since such time, together with the pro-rata interest accrued on such Bonds in compliance with
these Terms and Conditions. This right must be exercised by the Applicant within 30 (thirty) days of
the publication date of such Meeting resolution according to Article 13.5 of these Terms and
Conditions by a written notice (the Application) addressed to the Issuer and delivered to the
Specified Office of the Fiscal and Paying Agent, failing which the right will terminate. The amounts
referred to above will become due and payable within 30 (thirty) days from the date the Application
was delivered to the Fiscal and Paying Agent (the Early Redemption Date).
(b)
Resolution on Early Redemption of the Bonds upon Bondholders' Request
If the Meeting agenda includes a Material Change under Article 13.1(b)(ii) through (v) of these
Terms and Conditions and the Meeting does not consent to such a Material Change, the Meeting
may, even beyond the scope of the agenda, decide that if the Issuer proceeds in conflict with the
resolution of the Meeting that disagreed with such a Material Change under Article 13.1(b)(ii)
through (v) of these Terms and Conditions, the Issuer will be obliged to repay the nominal value
of the Bonds and any pro-rata interest accrued thereon (if relevant) to any Bondholder who requests
such early repayment (the Applicant). This right must be exercised by the Applicant by a written
notice (the Application) addressed to the Issuer and delivered to the Specified Office of the Fiscal
and Paying Agent. The amounts referred to above will become due and payable within 30 (thirty)
days from the date the Application was delivered to the Fiscal and Paying Agent (the Early
Redemption Date).
(c)
Requirements as to the Application
The Application will specify the number of Bonds the redemption of which is claimed in compliance
with this Article. The Application must be in writing and signed by persons authorised to act
on behalf of the Applicant, the authenticity of such signatures to be officially verified. Within the
same time limit, the Applicant is obliged to deliver to the Specified Office of the Fiscal and Paying
Agent all the documents required for making the payment under Article 8 of these Terms and
Conditions.
65
13.5
Minutes of the Meeting
Minutes of the business discussed and resolved at the Meeting will be taken by the person who convened
the Meeting or by a person authorised by such person and will be distributed within 30 (thirty) days after
the date of the Meeting. The minutes will contain the conclusions of the Meeting, including, without
limitation, any resolutions adopted by such Meeting. If the Meeting is convened by a Bondholder or the
Bondholders, the minutes of such Meeting must also be delivered to the Issuer at the Specified Office
address not later than 30 (thirty) days after the date of the Meeting. The Issuer is obliged to keep the minutes
of the Meeting until the rights under the Bonds come under the statute of limitations. The minutes of the
Meeting will be available for inspection by the Bondholders at the Specified Office during regular office
hours. The Issuer is obliged, in person or through his authorised person (especially the Fiscal and Paying
Agent), to publish all resolutions of the Meeting in the manner set out in Article 14 of these Terms and
Conditions not later than 30 (thirty) days after the date of the Meeting. If the Meeting has discussed
a resolution on any of the Material Changes referred to in Article 13.1(b)(i) through (v) of these Terms and
Conditions, a notarial record must be made of the attendance at the Meeting and the resolutions adopted
by the Meeting. If the Meeting adopts any such resolution, the notarial record will also contain the names
of the Persons Authorised to Attend the Meeting who validly voted for the adoption of such resolution and
the number of Bonds held by such persons as of the Meeting Attendance Record Date.
14.
Notices
Any notice to the Bondholders will be valid and effective if published in the English language on the Issuer's
website: www.privateequitymanagers.pl/mci-euroventures-1-0/#mci-vp-vi-ska. If the mandatory provisions
of applicable laws or these Terms and Conditions determine any other method for publishing any of the
notices given hereunder, such notice will be deemed to be validly published upon its publication in the
manner prescribed by the relevant legislation. In case of any notice published in several manners, the
publication date of such notice will be deemed to be the date of its first publication.
15.
Governing Law, Language and Dispute Resolution
Any rights and obligations under the Bonds and the Guarantee will be governed by, and interpreted and
construed in accordance with, the laws of the Czech Republic. Any rights and obligations arising from the
Security will be governed by, and interpreted and construed in accordance with, the laws of Poland and
Turkey. These Terms and Conditions may be translated into other languages. In the event of any
inconsistencies between the various language versions, the English language version shall prevail. Any
dispute between the Issuer and the Bondholders arising out of or in connection with the Bonds, the
Guarantee or these Terms and Conditions shall be finally resolved by the Municipal Court in Prague.
The Bondholders should be aware that the Issuer as such is an entity established and operating in accordance
with Polish law. The judgments given in a civil or commercial case by a court in an EU Member State are
enforceable in Poland because the Regulation (EU) No 1215/2012 of the European Parliament and of the
Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters is directly applicable in Poland.
16.
Definitions
In these Terms and Conditions:
Assets Value means the value of all the assets of the Guarantor (including cash and accrued interest and
dividends).
Business Day means any day (other than Saturday or Sunday) on which banks in the Czech Republic are
open for business, and on which foreign exchange transactions and interbank payments in Czech crowns, or
in any other lawful currency of the Czech Republic that might replace the Czech crown, are settled.
66
Guarantor's Management Board means the Guarantor's management board.
Guarantor's Supervisory Board means the Guarantor's supervisory board.
Indebtedness means any indebtedness, in each case without double counting, which would, except for any
indebtedness referred to in paragraphs (h) and (i) below, be in accordance with IFRS treated as debt
recognized on the balance sheet of the relevant person for or in respect of:
(a)
moneys borrowed;
(b)
any note purchase facility or the issue of bonds, debentures, loan stock or any similar instrument;
(c)
any redeemable preference share;
(d)
any lease, hire purchase contract or other agreement which would, in accordance with IFRS,
be treated as a finance or capital lease or similar form of debt, except lease agreements for office;
(e)
any indebtedness arising from any deferred payment agreements arranged primarily as a method
of raising finance or financing the acquisition of an asset to the extent it is recorded on the balance
sheet of the relevant person according to IFRS;
(f)
any derivative transaction entered into in connection with protection against fluctuation in any rate
or price (and, when calculating the value of any derivative transaction, only the marked to market
value will be taken into account) which would, in accordance with IFRS, be treated on the balance
sheet of the relevant person, except derivative transaction entered into in connection with protection
against fluctuation in PRIBOR rate and/or fluctuations in the exchange rate of the Czech crown
against Polish zloty;
(g)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond standby or documentary
letter of credit or any other instrument issued by a bank or financial institution other than any given
in respect of trade credit arising in the ordinary course of business, which have been granted or
concluded by the Guarantor with entities other than Guarantors' Subsidiaries, investment funds
which investment certificates are held by the Guarantor or with portfolio companies of investment
funds which investment certificates are held by the Guarantor;
(h)
any other transaction (including any forward sale or purchase agreement) having the commercial
effect of a borrowing, to the extent it is recorded on the balance sheet of the relevant person
according to IFRS, except forward sale or purchase agreement of Czech crown and except
transaction (including any forward sale or purchase agreement) entered into by the Guarantor with
its Subsidiaries, investment funds which investment certificates are held by the Guarantor or with
portfolio companies of investment funds which investment certificates are held by the Guarantor; or
(i)
any guarantee, indemnity or similar assurance against financial loss of any person issued by the
relevant person in respect of any item referred to in paragraphs (a) to (h) above, which have been
granted or concluded by the Guarantor with entities other than Guarantors' Subsidiaries, investment
funds which investment certificates are held by the Guarantor or with portfolio companies of
investment funds which investment certificates are held by the Guarantor (other than any given in
respect of trade credit arising in the ordinary course of business).
Initial Polish Pledge means a registered pledge over the Initial Polish Pledged Shares to be established in
connection with the Bond issue.
Initial Turkish Pledge means a registered pledge over the Initial Turkish Pledged Shares to be established
in connection with the Bond issue.
67
Investment Fund Group means any investment fund managed by PEM Group or MCI TFI Group, any
subsidiaries (both direct and indirect) and parent companies (both direct and indirect) of any such investment
fund.
MCI.EV means the Sub-fund MCI.Euro Ventures 1.0 sub-fund separated in MCI.PrivateVentures Fundusz
Inwestycyjny Zamknięty with its registered office in Warsaw, at ul. Emilii Plater 53, 00-113 Warsaw,
entered in the Register of Investment Funds kept by the Regional Court in Warsaw, VII Civil Registry
Division, under the number RFi 347, represented by MCI Capital Towarzystwo Funduszy Inwestycyjnych
spółka akcyjna (a joint stock company) with its registered office in Warsaw, at ul. Emilii Plater 53, 00-113
Warsaw, entered in the Register of Business Entities kept by the District Court for the Capital City of
Warsaw in Warsaw, XII Commercial Division of the National Court Register under the number KRS
0000263112;
MCI.EV Subsidiary means any Subsidiary in relation to the MCI.EV;
MCI FM means MCI Fund Management spółka z ograniczoną odpowiedzialnością (a limited liability
company) with its registered office in Warsaw at ul. Emilii Plater 53, 00-113 Warsaw, entered in the
Register of Business Entities kept by the District Court for the Capital City of Warsaw in Warsaw, XII
Commercial Division of the National Court Register under the number KRS 0000288538.
MCI Group means the Guarantor and its Subsidiaries.
MCI TFI Group means MCI Capital Towarzystwo Funduszy Inwestycyjnych S.A., with its registered seat
at Warsaw, its subsidiaries (both direct and indirect) and parent companies (both direct and indirect).
PEM Group means Private Equity Managers S.A., with its registered seat at Warsaw, its subsidiaries (both
direct and indirect) and parent companies (both direct and indirect).
Person means any individual, company, corporation, firm, partnership, joint venture, association,
organisation, state or agency of a state or other entity, whether or not having separate legal personality.
Public Offer Act means the Act on Public Offerings and Conditions of Introducing Financial Instruments
to Organised Trading and on Public Companies of July 29, 2005 (Journal of Laws 2013, item 1382).
Relevant Debt means any present or future indebtedness of the MCI Group for borrowed money, which
is in the form of, or represented by, bonds, notes, investment certificates or other securities.
Relevant Instructing Group means at least 75 per cent. of the Bondholders or Persons Authorised to Attend
the Meeting, who are present at the Meeting.
Security means the security in the form of Initial Polish Pledge and Initial Turkish Pledge as specified in
Clause 4 of the Terms and Conditions as well as any other Security created as specified in clause 4 of the
Terms and Conditions, but not the Guarantee;
Security Interest means any mortgage, charge, pledge, lien or other security interest including, without
limitation, anything analogous to any of the foregoing under the laws of any jurisdiction.
Subsidiary means, in relation to any Person (the first Person) at any particular time, any other Person
(the second Person):
(a)
whose affairs and policies the first Person controls or has the power to control, whether
by ownership of share capital, contract, the power to appoint or remove members of the governing
body of the second Person or otherwise; or
68
(b)
whose financial statements are, in accordance with applicable law and generally accepted accounting
principles, consolidated using the acquisition accounting method with those of the first Person.
Tomasz Czechowicz Group means Mr. Tomasz Czechowicz and entities controlled by Mr. Tomasz
Czechowicz directly or indirectly.
69
DESCRIPTION OF THE SECURITY
1.
Initial Polish Pledge
1.1
General information on the main activities of ABC Data
ABC Data conducts activity in the area of distribution of IT equipment in Poland and in other states of
Central and Eastern Europe which are the EU members. ABC Data is one of the leaders in the sale of IT
equipment online, where it also carries out distribution under its own brand "Colorovo".
1.2
Identification of the regulated markets where the ABC Data shares are traded
The ABC Data shares, which will become subject to the Security Interest under the Initial Polish Pledge, are
admitted to trading on the regulated market (parallel market) organized by the GPW.
1.3
Information on the place where the important information on ABC Data is disclosed and
frequency of the disclosure of such information
ABC Data is a public company within the meaning of Article 4, item 20) of the Public Offer Act. Under
relevant laws ABC Data is required to make public any material information relating to its current activity in
the form of confidential information, current information, and periodic information. The dates of providing
such information are set out in relevant laws, in particular, the provisions of the Public Offer Act and the
Issuers' Regulation. Such information is published by ABC Data on its website: www.abcdata.com.pl. The
most important information and documents concerning ABC Data are published on the following website:
Document
Web page
Statute of ABC
Data
http://en.abcdata.eu by selecting the following sections: "For Investors" – "Corporate
Governance" – "Corporate Documents"
Rules of ABC
Data General
Meeting
http://en.abcdata.eu by selecting the following sections: "For Investors" – "Corporate
Governance" – "Corporate Documents"
Information on
ABC Data's
capital group
http://en.abcdata.eu by selecting the following sections: "For Investors" – "Capital
Group"
ABC Data's
financial
statements
http://en.abcdata.eu by selecting the following sections: "For Investors" – "Stock
Exchange Reports" – “Periodical Reports”
Current stock
exchange
reports
http://en.abcdata.eu by selecting the following sections: "For Investors" – "Stock
Exchange Reports" – “Current Reports”
1.4
Historical information on trade volumes and prices of the ABC Data shares
Date
Closing rate (PLN)
Volumes (number of shares traded on the
regulated market on a particular date)
29.2.2016
3.26
17,294
29.1.2016
3.15
24,459
74
31.12.2015
3.15
11,710
30.06.2015
3.35
45,558
30.12.2014
3.4
38,958
30.06.2014
4.18
115,255
30.12.2013
4.3
141,140
28.06.2013
3.17
80,573
28.12.2012
2.08
76,697
29.06.2012
2.2
36,011
Source: www.gpwinfostrefa.pl
1.5
Nature of the security
The Initial Polish Pledge secures any payment under the Bonds as set out in more detail in the Initial Polish
Pledge agreement.
1.6
Scope of the security
The Initial Polish Pledge agreement will be entered into prior to the Issue Date by the Issuer and the Security
Agent in order to create first ranking security for the Security Agent Claim as set out in the Terms and
Conditions.
The Initial Polish Pledge will be established for the benefit of the Security Agent to secure the Security
'Agent Claim for the payment of all debts under the Bonds up to the maximum amount of CZK
1,053,000,000 and will be governed by Polish law. The object of the Initial Polish Pledge will consist of the
Initial Polish Pledged Shares. The Initial Polish Pledge will be established over at least 6 million Initial
Polish Pledged Shares. As of the date of this Prospectus the total number of ABC Data shares that remain
unpledged is approx. 7.6 million.
Under the Initial Polish Pledge agreement the Issuer will be required to file an application for registration of
the Initial Polish Pledge into the pledge register kept by the competent district court. After delivery of the
court's decision on such registration (which is expected to take up to 20 Business Days), the Issuer will
promptly (but not later than on the fifth business day after the date of receipt of the court's decision) submit,
at its own expense, all instructions necessary for registration of suspension of rights to dispose with the
Initial Polish Pledged Shares by the entity keeping the Issuer's securities account on which the Initial Polish
Pledged Shares are registered. If the Security Agent Claim becomes due and payable, the Security Agent
may satisfy itself from the Initial Polish Pledged Shares through court enforcement proceedings or seizure of
the Initial Polish Pledged Shares.
The Initial Polish Pledge expires:
(a)
upon the expiration of the Security Agent Claim in full; or
(b)
on the date, on which the Initial Polish Pledge is deleted from the pledge register following the
Security Agent's written consent with such deletion,
whichever occurs first.
75
The Initial Polish Pledge agreement is governed by the laws of Poland. Any disputes arising from
or connected with the Initial Polish Pledge agreement, including any disputes concerning its validity, will be
settled by a common court of law competent by venue for the Issuer's registered office.
1.7
Documents on display
For the life of the Prospectus a copy of the Initial Polish Pledge agreement will be available for inspection
during the standard working hours, upon request, at the Issuer's registered office.
2.
Initial Turkish Pledge
2.1
General information on the main activities of Indeks
Indeks imports and distributes personal computers, servers, computer hardware, computer software and
networking products through dealers in Turkey. The Indeks' product portfolio includes Microsoft, IBM,
3Com, Sony, Cisco and Hewlett-Packard brands. The group also provides telecommunication services.
Indeks distributes more than 200 worldwide brands, employs 306 personnel and cooperates with more than
7,500 business partners, holding the leadership position in the Turkish IT sector since 2001.
Indeks is acting as a holding company, has 6 affiliates and subsidiaries, each of which operates in a different
field of technology products. The following companies are included in the consolidated financial statements
of Indeks. The product groups of such companies are shown in the following table:
COMPANY BASED PRODUCT GROUPS
DATAGATE2
İNDEKS






PC
Notebook
Server
Peripherals
Software
OEM products
NEOTECH



2
Consumer
Electronics
Communication
Devices
Alternative
Electronics
Products












DESPEC
CPU
Hard disk
Mother board
VGA Card
Monitors
Optical Products
Server Products
Memory Products
Notebook
Laser Printers
Backup Hardware
Security Products
NETEKS







Consumables
Movable Data Storage
Media
Accessories
Papers
TEKLOS
Corporate Network Systems
Network Components
Structural Cable Products
Corporate Telephone Systems
Network Security Solutions
ADSL Communication
Solutions
Datagate Bilgisayar Malzemeleri Ticaret A.Ş. went through the IPO in February 2006 with the code of "DGATE".
76

Logistics and
Transportation
2.2
Identification of the regulated markets where the Indeks shares are traded
The shares of Indeks are admitted to trading on the Istanbul Stock Exchange (Borsa Istanbul).
2.3
Information on the place where the important information on Indeks is disclosed and
frequency of the disclosure of such information
Indeks is a public company within the meaning of Article 3, item e)3 of Capital Markets Law No. 6362,
effective from December 30th, 2012.
Under relevant Capital Markets Law, Indeks is required to make public any material information relating to
its current activity, which does not constitute confidential information, in a form of current information, and
periodic information. Such information is published on Public Disclosure Platform, which is available at:
www.kap.gov.tr. The Public Disclosure Platform allows all users access to both the current and the past
disclosures of a traded company, as well as other announcements and up-to-date information.
The most important information and documents concerning Indeks are published on the following website:
Document
Web page
Information on
Indeks
Bilgisayar's
capital group
http://www.index.com.tr/eng/ by selecting the following sections: "Investor" –
“Subsidiaries”
Indeks
Bilgisayar's
financial
statements
http://www.index.com.tr/eng/ by selecting the following sections: "Investor" – “Financial
Data”
2.4
Operational structure
(a)
Structure of product supply and distribution:
Indeks operates as a main distributor ("broadline
distributor") in IT industry. It buys IT products
from suppliers at certain prices with certain
maturity periods and subsequently sells the
products to the sales channels that will sell them
to the end customer. The company does not plan
to develop a sales structure that will include
direct sales to the end customer in the near future.
(b)
Suppliers
Global brands that operate in Turkey: IBM,
HP, LENOVO, INTEL, SEAGATE, CANON,
OKI, SYMANTEC, MICROSOFT, APC, FUJITSU SIEMENS, EPSON, TOSHIBA, SONY, ASUS.
Global brands that do not operate in Turkey: KINGSTON, NEC, VIEWSONIC, WESTERN DIGITAL.
(c)
3
Distribution channel
Capital Markets Board of Turkey (www.cmb.gov.tr)
77
Indeks buys the products from suppliers, sells them to the sales channels which resell them to the end
customer. The structure of distribution is as follows:
(i)
System integrators (approx. 100 companies);
(ii)
Value added dealers - companies that have 25-100 employees;
(iii)
Regular dealers - small companies with members of staff of 5 to 25;
(iv)
Retail channel:
2.5
companies
that
target
solely
the
big
corporate
customers

Retail chains: big groups having more than one store under the same brand such
as Teknosa, Bimeks, Vatan, Gold, Media Markt, Darty, Electro world, Best Buy
Teknolojiks, NT, Yalçınlar, Evkur, Metro, Migros, Real, Carrefour, Tesco/Kipa.

Regular computer stores: small companies where the owner of the store and a few sales
representatives work and they operate with limited resources.

E-retail.
Historical information on trade volumes and prices of the Indeks shares
Date
Closing rate (TRY)
Volumes (number of shares traded on the
regulated market on a particular date)
29.2.2016
6.85
115,652
29.1.2016
6.42
343,642
31.12.2015
6.29
326,530
30.06.2015
5.50
146,863
31.12.2014
5.70
175,275
30.06.2014
4.48
83,640
31.12.2013
4.10
100,929
28.06.2013
4.10
58,829
31.12.2012
4.29
442,786
29.06.2012
3.15
185,373
Source: www.google.com/finance
2.6
Scope of Security
The Indeks Shares are held by the Security Provider and not the Issuer itself. The Initial Turkish Pledge
agreement will be entered into prior to the Issue Date by the Security Agent as the pledgee (the Pledgee) and
the Security Provider as the pledgor (the Pledgor), in order to create first ranking security for the Security
Agent Claim as set out in the Terms and Conditions.
78
The Initial Turkish Pledge will be established for the benefit of the Security Agent to secure the Security
'Agent Claim for the payment of all debts under the Bonds up to the maximum amount of CZK
1,053,000,000 and will be governed by Turkish law. The object of the Initial Turkish Pledge will consist of
the Initial Turkish Pledged Shares. The Initial Turkish Pledge will be established over at least 5 million
Initial Turkish Pledged Shares. As of the date of this Prospectus the total number of Indeks shares that
remain unpledged is approx. 13.6 million.
For perfection of the Initial Turkish Pledge the Pledgor must, amongst others:
(i)
notify the Pledgor's Intermediary Institution of the Initial Turkish Pledge and provide the Pledgor's
Intermediary Institution, upon its request, with a copy of the Initial Turkish Pledge agreement and
any other documents as may be required by the Pledgor's Intermediary Institution and instruct the
Pledgor's Intermediary Institution in writing;
(ii)
procure that the Pledgor's Intermediary Institution transfers the Initial Turkish Pledged Shares
pledged under the Initial Turkish Pledge agreement from the Pledgor's Investor Account to the
Security Agent's investor account; and
(iii)
ensure that the necessary entries in the electronic database and records of the Central Registry
System (Merkezi Kayıt Sistemi) for the duly perfection of the Initial Turkish Pledge are made.
The Initial Turkish Pledge agreement is governed by the laws of Turkey and Istanbul central (Çağlayan)
courts and execution offices have the exclusive jurisdiction to hear and determine any lawsuit, action or
proceeding and to settle any disputes and all matters arising out of or in connection with the Initial Turkish
Pledge.
2.7
Documents on display
For the life of the Prospectus a copy of the Initial Turkish Pledge agreement will be available for inspection
during the standard working hours, upon request, at the Issuer's registered office.
79
INTEREST OF PERSONS INVOLVED IN ISSUANCE AND OFFERING OF BONDS
The Issuer is not aware of any interest of persons involved in issuance and offering of the Bonds which
would be material for the Bond Issue, other than for any fees payable to Česká spořitelna, a.s., acting as the
Lead Manager, the Fiscal and Paying Agent, the Security Agent, the Listing Agent and the Calculation
Agent in the offering and subscription and sale of the Bonds.
80
USE OF PROCEEDS
The net proceeds from the Issue of the Bonds will be used by the Issuer to finance general investment
purposes of the Issuer and for the partial repayment of the purchase price for the ABC Data shares.
The Issuer plans to invest the proceeds in medium-sized companies in the following sectors: financial
services, e-commerce, distribution, technology, media and telecommunication. Investment strategy focuses
on companies with established market position or which are leading players in a given area of business
activity in Poland, Turkey and CEE region.
81
INFORMATION ABOUT THE ISSUER
1.
General information about the Issuer
Legal (statutory) name:
MCI Venture Projects Spółka z ograniczoną odpowiedzialnością VI
Spółka komandytowo-akcyjna
Legal form:
limited joint-stock partnership
Registered office:
Warsaw
Country of registered office:
Poland
Address:
ul. Emilii Plater 53, 00-113 Warsaw
Country of incorporation:
Poland
Telephone:
(+48) 22 540 73 80
Fax:
(+48) 22 540 73 81
Website address:
www.privateequitymanagers.pl/mci-euroventures-1-0/#mci-vp-viska
E-mail address:
office@mci.eu
KRS (National Court Register):
0000485654
REGON number:
142981545
NIP number:
525-25-77-368
2.
Incorporation and History of the Issuer
The Issuer was established on 4 November 2013, under the name MCI Venture Projects Spółka
z ograniczoną odpowiedzialnością VI Spółka komandytowo-akcyjna, under a founding deed of a limited
joint-stock partnership.
In business transactions the Issuer may use the abbreviation: MCI Venture Projects Spółka z ograniczoną
odpowiedzialnością VI S.K.A.
The Issuer was incorporated by its registration into the Register of Business Entities of the National Court
Register kept by the District Court for the Capital City of Warsaw in Warsaw, XII Commercial Division
under the number KRS 0000485654 on 14 November 2013. The first fiscal year for the Issuer was from 4
November 2013 to 30 November 2013, the next one from 1 December 2013 to 31 October 2015. The current
fiscal year started on 1 November 2015 and ends on 31 October 2016. Due to the fact that the Issuer is a
limited joint-stock partnership (spółka komandytowo-akcyjna) according to the Polish law the Issuer could
benefit from the exemption from corporate income tax by extending its financial year (i.e. the Issuer was not
liable to pay income tax). There was a last possibility for the Issuer to benefit from this provision as the
regulations have changed recently. Therefore, the Issuer requested and obtained an individual interpretation
of the Ministry of Finance, which allowed to extend the Issuer's financial year and thus benefit from the
exemption. Due to changes in regulations as from 1 November 2015 the Issuer has become a corporate
income taxpayer.
The Issuer was established for an indefinite time.
82
The Issuer operates under the laws of Poland, in particular, the Commercial Companies Code, the Issuer's
Articles of Association, as well as the Issuer's other internal regulations.
The following events in the development of the Issuer's business activity have been relevant up-to-date:
In September 2014 the Issuer acquired 25,685,000 shares in ABC Data. In December 2014 the Issuer
acquired further 4,700,000 and 46,675,378 shares in ABC Data.
3.
Responsible Auditors
3.1
Financial statements for the period from 4 November 2013 to 31 December 2013
The Issuer's individual financial statements for the period from 4 November 2013 to 31 December 2013 were
examined by:
Audit firm:
PKF Consult Sp. z o. o.
License no.:
477
Registered office:
Okrzycka 6 lok. 1B, 02-692 Warsaw, Poland
Responsible person:
Cezary Bąkiewicz
License no.:
12232
3.2
Financial statements for the period from 1 January 2014 to 31 December 2014
The Issuer's individual financial statements for the period from 1 January 2014 to 31 December 2014
were examined by:
Audit firm:
License no.:
477
Registered office:
Responsible person:
Cezary Bąkiewicz
License no.:
12232
4.
Risk Factors
The risk factors are included on pages 11-14 of this Prospectus under the chapter Risk Factors Related to the
Business of the Issuer.
5.
Recent Events Related to Issuer's Solvency
As of the end of 2014 the Issuer had PLN 24,650 of cash in its bank account. In July 2015 Issuer received
PLN 27 million of dividend from ABC Data.
There is no overdue trade receivables and no provisions for bad debts. The net loss of 2014 in the amount of
PLN 42,511,514 is due to the short term changes of a market value of ABC Data shares. The Issuer´s view is
that the market value of ABC Data shares is not in line with the fair value and currently market undervalues
the shares. In the Issuer's opinion, there is potential for market price to go up in near future, especially due to
the fact that ABC Data pays regularly the dividend to its shareholders and that the new growth strategy has
been implemented.
83
Furthermore the Issuer does not have any long-term liabilities and does not have any borrowings which
would generate interest charges. All financial liabilities are associated with transactions of acquisition of
shares of ABC Data which are transactions between Issuer's related entities.
6.
Business Overview
6.1
Principal Activities
The Issuer was incorporated as a special purpose vehicle and its main business activity is owning shares in
other companies or businesses. The Issuer does not produce any goods and does not provide any services
outside its scope of business. The Issuer has made a significant investment in Polish company ABC Data,
listed on Warsaw Stock Exchange. ABC Data is a leading IT hardware distributor in Central and Eastern
Europe (CEE). It is the only company in the industry that managed to build a strong presence in eight CEE
countries, with direct business operations in Poland, the Czech Republic, Slovakia, Romania, Lithuania,
Latvia, Estonia and Hungary. With over 20 years of experience in the distribution of computer hardware,
software and consumer electronics, the ABC Data Group has been able to create the most comprehensive
portfolio on the market, comprising 56,000 products from over 300 leading suppliers.
The Issuer does not rule out the acquisition of holdings in other companies or businesses, but it will depend
on macroeconomic and political conditions, perspective regarding the trend in capital markets and the
attractiveness of business ideas under consideration.
6.2
Competitive Position and Markets
The Issuer´s development is closely connected with the possibilities of making new investments in
promising and technologically advanced business projects. The market shows the growth of competition
from others. We are not able to exclude the risk of increased competition from existing operators or new
entrants financially strong and prestigious foreign entities. The Issuer addresses this risk considering
investment projects in new and perspective markets where the competition is smaller and from different
geographies.
84
7.
Simplified Organisational Structure as of 29 February 2016
TOMASZ CZECHOWICZ
OTHER SHAREHOLDERS
99.85 % shares
CEZARY SMORSZCZEWSKI
ALTERNATIVE
INVESTMENT PARTNERS
SP. Z O.O.
37.81 %
36,16 %
2.31 % shares
15,52 %
50.93 % shares
PEManagers
10.51 %
GUARANTOR
100 %
MCI TFI (Fund/Sub-fund
manager)
100 % shares
INDIVIDUAL INVESTORS
MCI FM
Institutions
investment certificates
Individuals
63.77 %
6.73 %
0.72 %
93.27 %
Fund
Investment
certificates
35.51 %
Sub-fund MCI.EuroVentures
1.0
100% shares
General Partner
(representing the Issuer)
Sub-fund MCI.TechVentures
1.0
100% shares
Issuer
61.52 % shares
ABC Data
100% shares
Alfanor
24.18 % shares
Indeks
Sub-fund MCI.EuroVentures 1.0. holds 100% of shares in the Issuer. Sub-fund MCI.EuroVentures 1.0. also
holds 100% of shares in Alfanor.
Sub-fund MCI.EuroVentures 1.0. is one of two sub-funds (the other one being Sub-fund MCI.TechVentures
1.0) that have been separated in the Fund. Pursuant to the provisions of the Act on Investment Funds, subfunds separated from investment funds do not have legal personality. Only investment funds have legal
personality. Nevertheless, sub-funds have separate assets. Any liabilities arising from particular sub-funds
encumber only the sub-funds.
85
The Fund is managed by MCI TFI, which is also the Fund's body empowered, without limitation, to
represent the Fund in relations with third parties. MCI TFI is an investment fund company operating under a
permission of the PFSA. According to article 4(4) of the Act on Investment Funds, the Fund is not a
subsidiary of the investment fund company which manages it (MCI TFI in this case).
Sub-fund MCI.EuroVentures 1.0. also holds 100% of the General Partner's shares. According to the Polish
law, the body empowered to represent the limited joint-stock partnership (as the Issuer) is it's general
partner, thus the General Partner is the entity empowered to represent the Issuer. The General Partner
operates under Polish law in a form of limited liability company. Pursuant to the Commercial Companies
Code, the management board shall manage the affairs of the limited liability company and represent such
company, thus the General Partner acts through the General Partner's Management Board. The Issuer is thus
a member of the capital group whose parent is the Fund. Alfanor belongs to the same capital group as the
Issuer. The Sub-Funds (including Sub-fund MCI. EuroVentures 1.0.) also hold shares in other entities and
have other subsidiaries, not mentioned above, and, due to the fact that, pursuant to article 280 et seq. of the
Act on Investment Funds, the information on investment funds' deposits is covered by professional secret, it
has not been disclosed in this Prospectus. It should be noted that the information on the assets of the Fund
and of particular Sub-Funds is disclosed in the Fund's published financial statements (including the financial
statements of individual Sub-Funds).The Issuer has a subsidiary, ABC Data, in which it holds 77,060,378
shares, representing in aggregate 61.52% of ABC Data's share capital. The Issuer has also 35% of total
shares of Biotech Varsovia Pharma Spółka z ograniczona odpowiedzialnoscia w likwidacji with registered
seat in Warsaw, a company of a total share capital of PLN 4,572,200 (Biotech). As of the date of this
Prospectus, Biotech is in liquidation and does not conduct any business activity.
The Guarantor holds 100% of shares in MCI FM.
As at 31 December 2015, MCI FM holds 93.27% of investment certificates connected with Sub-fund
MCI.EuroVentures 1.0.
According to article 4, section 4, of the Act on Investment Funds, the Fund is not a subsidiary of any entities
holding, directly or indirectly, the majority of voting rights in the Fund's bodies (Guarantor or entities
belonging to the Guarantor's Group in this case).
Thus, the Issuer is not a subsidiary of the Guarantor or a member of the Guarantor's Group. According to the
IFRS, the Guarantor does not control the Fund nor the Issuer.
There are no relationships between the Issuer and other members of the Issuer's group resulting from the
cumulative loss which, in accordance to the financial statement of the Issuer for the period from 1 January
2014 to 31 December 2014, exceeded the sum of the Issuer's supplementary and reserve capital and one-third
of its share capital, other than equity interest relationships within the Issuer's Group (as described above) and
the Issuer's dependence on the opportunities to obtain enough funds or loans from the Issuer's Group
companies in order to repay the Issuer's opportunities. However this dependence is intended to be mitigated
by the Issuer's Group by implementing the optimization in scope of the Issuer's liabilities structure. This
should be also underlined that due to the fact that the Issuer holds a majority stake in ABC Data, the Issuer
has a decisive impact on any payments made by ABC Data to its shareholders.
8.
Trend Information
The Issuer is not aware of any material adverse change in the prospects of the Issuer since 31 December
2014.
The Issuer is not aware of any trends, obligations or events that might have a significant impact on the
prospects of the Issuer for the subsequent accounting period.
86
9.
Profit Forecasts or Estimates
The Issuer did not make a profit forecast or estimate.
10.
Administrative, Management, and Supervisory Bodies
10.1
The General Partner
The General Partner is the entity authorised to represent the Issuer. The body empowered to represent the
General Partner is the General Partner's Management Board. The General Partner's Management Board
currently consists of four members. Members of the General Partner´s Management Board were not
entrusted with any particular functions within the scope of their duties as members of the General Partner´s
Management Board. The General Partner's shareholders' meeting is empowered to elect members of the
General Partner's Management Board. Legal acts on behalf of the General Partner may be made: (i) if the
Management Board composed of one person - by the President of the General Partner's Management Board
individually; (ii) if the Management Board Composed of more than one person (current situation) – by two
members of the General Partner's Management Board acting jointly or one member of the General Partner's
Management Board acting jointly with the holder of the commercial power of attorney. As of the date of this
Prospectus, the General Partner's Management Board consists of the following members:
(a)
Tomasz Czechowicz – President of the General Partner's Management Board
He holds a Master of Science in Business Management degree granted by the Academy of
Economics in Wrocław in 1997. He also completed post-graduate studies in management organized
by the Warsaw School of Economics in 1998. Also in 1998, he was granted an MBA degree by the
Minnesota University. In 1994, he was granted an engineering degree in Manufacturing
Organization by the Wrocław Technical University.
He has gained his professional experience in the following entities: JTT-Computer S.A., MCI
Capital S.A., Geewa a.s., Invia.cz a.s., Frisco.pl S.A., European Institute of Technology and
Innovation, KupiVIP Holding, Windeln.de, Indeks Bilgisayar Sistemleri Mühendislik Sanayi ve
Ticaret A.Ş. and Giełda Papierów Wartościowych w Warszawie S.A. (GPW).
Since July 2012 he has been on the General Partner's Management Board. As part of his function
at the General Partner he conducts activities provided for the General Partner's Management Board
members by the General Partner's articles of association.
The place of Tomasz Czechowicz's work is the Guarantor (ul. Emilii Plater 53, 00-113 Warsaw,
Poland) and PEManagers (Rondo ONZ 1, 00-124 Warsaw, Poland), where he is vice president of the
management board.
Except for his function at the General Partner, Tomasz Czechowicz performs the following functions
which could be of relevance for the Issuer:

ABC Data's supervisory board member (since 2007, on and off);

vice president of ABCD Management S.A.'s management board (since 2012);

president of Alternative Investment Partners sp. z o.o.'s management board (since 2010);

president of DI Roberto sp. z o.o.'s management board (since 2013);

Frisco S.A.'s supervisory board member (since 2012);

Grupa Wirtualna Polska sp. z o.o.'s supervisory board member (since 2014);
87

president of MCI Asset Management sp. z o.o.'s management board (since 2013);

vice president (former member) of MCI TFI's management board (since 2007);

president of MCI FM's management board (since 2007);

president of the management board of MCI Venture Projects sp. z o.o. (since 2012);

MORELE.NET sp. z o.o.'s supervisory board member (since 2012);

Wirtualna Polska Holdings S.A.'s supervisory board member (since 2014);

Private Equity Managers S.A.'s management board member (since 2012).
Except for his function at the General Partner, Tomasz Czechowicz does not perform any functions,
other than those mentioned above, which could be of any relevance for the Issuer.
(b)
Wojciech Marcińczyk – member of the General Partner's Management Board
He holds a Master of Science in Engineering degree granted in 1994 by the Warsaw Technical
University and a Master's degree in accounting and finance granted in 1999 by the Warsaw
University. He is a Fellowship member of the ACCA and he was granted a Master of Business
Administration (MBA) degree by the Illinois University.
He has gained his professional experience in the following entities: E-TELBANK sp. z o.o.,
EXATEL S.A., NIEZALEŻNY OPERATOR MIĘDZYSTREFOWY sp. z o.o., BILLBIRD S.A.,
DELOITTE BUSINESS CONSULTING S.A. and POLSKA TELEFONIA CYFROWA sp. z o.o.
Since July 2012 he has been the General Partner's Management Board member. As part of his
function at the General Partner he conducts activities provided for the General Partner's Management
Board members by the General Partner's articles of association.
The place of Wojciech Marcińczyk's work is the Guarantor (ul. Emilii Plater 53, 00-113 Warsaw,
Poland) and MCI Fund Management spółka z ograniczoną odpowiedzialnością MCI.PrivateVentures
S.K.A (ul. Emilii Plater 53, 00-113 Warsaw, Poland).
Except for his function at the General Partner, Wojciech Marcińczyk does not perform any
functions, other than those mentioned above, which could be of any relevance for the Issuer.
(c)
Cezary Smorszczewski – the General Partner's Management Board member
He holds a Master of Engineering degree granted in 1991 by the Department of Sanitary and Water
Engineering of the Warsaw Technical University and a Master of Law degree granted in 1992 by the
Warsaw University. In 1997, he was granted a Master of Business Administration (MBA) degree by
the Chicago University, USA. He has completed the following course and trainings:
Credit Derivatives and Structured Finance, Merrill Lynch, New York (1996);
Post-graduate studies in International Commercial Law, European University, Turin, Italy (1993).
He has gained his professional experience in the following entities: Private Equity Managers S.A.,
MCI Capital S.A., Alior Bank S.A., DZS Cezary Smorszczewski, Polski Koncern Naftowy ORLEN
S.A., Bank Polska Kasa Opieki S.A, Institute of International Private and Commercial Law at the
Faculty of Law and Administration of the Warsaw University and Bank Handlowy S.A.
88
Since April 2014 he has been the General Partner's Management Board member. As part of his
function at the General Partner he conducts activities provided for the General Partner's Management
The place of Cezary Smorszczewski's work is PEManagers (Rondo ONZ 1, 00-124 Warsaw,
Poland), where he is president of the management board.
Except for his function at the General Partner, Cezary Smorszczewski does not perform
any functions, other than those mentioned above, which could be of any relevance for the Issuer.
(d)
Ewa Ogryczak – the General Partner's Management Board member
She holds a Master's degree granted in 2003 by the Warsaw School of Economics.
She has gained her professional experience in the following entities: KPMG Audyt sp. z o.o., PKF
Consult sp. z o. o., OGRYCZAK&OGRYCZAK sp.j. and Private Equity Managers S.A.
Since August 2014 she has been the General Partner's Management Board member. As part of her
function at the General Partner she conducts activities provided for General Partner's Management
The place of Ewa Ogryczak's work is the Guarantor (ul. Emilii Plater 53, 00-113 Warsaw, Poland).
Except for her function at the General Partner, Ewa Ogryczak does not perform any functions, other
than those mentioned above, which could be of any relevance for the Issuer.
10.2
Supervisory and Administrative Bodies
The Issuer does not have any supervisory or administrative bodies.
10.3
Management Board Conflicts of Interests
Neither the Issuer nor the General Partner is aware of any potential conflict of interests of persons
representing the General Partner's Management Board between any of their duties to the Issuer and their
private interests. According to representations submitted by each member of the General Partner's
Management Board, with respect to any of these persons there is no conflict of interest or potential conflict
of interest between these persons' duties to the Issuer and their private interests or other duties.
11.
The Sole Shareholder
Sub-fund MCI.EuroVentures 1.0. holds 100% of shares in the Issuer.
As of 31 December 2015, MCI FM (a Guarantor's subsidiary) holds 93.72% of investment certificates
connected with Sub-fund MCI.EuroVentures 1.0.
The General Partner is the entity empowered to represent the Issuer. The persons empowered to represent the
General Partner are the General Partner's Management Board members. Sub-fund MCI.EuroVentures
1.0. holds 100% of shares in the General Partner.
There are no arrangements, currently known to the Issuer, the operation of which may, at a subsequent date,
result in a change of control of the Issuer. To the extent known to the Issuer, there are no measures in place
to ensure that the control of the Issuer is not abused.
89
12.
Financial Information Concerning the Issuer's Assets and Liabilities, Financial Position and
Profits and Losses
12.1
Historical Financial Information
The following financial information with the respective auditor's opinions is incorporated by reference to this
Prospectus (see chapter Information Incorporated by Reference):
(a)
Audited financial statement of the Issuer for the year ended 31 December 2014, prepared in
accordance with the IFRS (the said financial statement was prepared exclusively for the purposes of
this Prospectus; it should be noted that the Issuer had no obligation under the Polish law to prepare
financial statement for such period and have it prepared in accordance with the IFRS and audited;
however, in order to provide the same format of the financial data as provided by the Guarantor and
Alfanor, the Issuer decided to prepare such financial statement);
(b)
Auditor's opinion in respect of the financial statements of the Issuer for the year ended 31 December
2014;
(c)
Audited financial statement of the Issuer for the year ended 31 December 2013, prepared in
accordance with the IFRS (the said financial statement was prepared exclusively for the purposes of
this Prospectus; it should be noted that the Issuer had no obligation under the Polish law to prepare
financial statement for such period and have it prepared in accordance with the IFRS and audited;
however, in order to provide the same format of the financial data as provided by the Guarantor and
Alfanor, the Issuer decided to prepare such financial statement); and
(d)
Auditor's opinion in respect of the financial statements of the Issuer for the year ended 31 December
2013.
12.2
Information about the basis for preparation of the financial statements of the Issuer
The annual financial statements have been prepared in accordance with the laws binding in the Republic of
Poland and with International Financial Reporting Standards (IFRS), as well as the interpretations issued by
the International Financial Reporting Interpretations Committee (IFRIC) adopted by the European Union.
The Issuer does not prepare consolidated financial statements as there are no subsidiaries that would be
subject to consolidation and the Issuer meets the definition of an investment entity in accordance with IFRS
10:27. The Issuer complies with all of the four typical characteristics of an investment entity as it (i) has
more than one investment, (ii) has more than one investor, (iii) has investors that are not related parties of the
Issuer and (iv) has ownership interests in the form of equity or similar investments. According to IFRS
10:31, when an entity meets the definition of an investment entity, it does not consolidate its subsidiaries and
instead needs to measure an investment in a subsidiary at fair value through profit or loss account.
The Issuer will not prepare consolidated financial statements for the business year ended 31 October 2015.
For the purposes of this Prospectus and for a better comparability, the Issuer decided to prepare the financial
statements for the years ended 31 December 2014 and 31 December 2013, which were prepared in
accordance with the IFRS and audited. Preparation of the abovementioned financial statement was not
statutory under the Polish law.
12.3
Selected Historical Financial Information
(a)
Statement of profit or loss and statement of other comprehensive income
For the period from 1 January 2014 to 31 December 2014 and the period from 4 November 2013
to 31 December 2013 in PLN:
90
Statement of profit and loss
Profit before income tax
Profit for the period
Earnings per share for the annual period (in PLN per share)
- basic
- diluted
TOTAL COMPREHENSIVE INCOME
(b)
(42,511,514)
(42,511,514)
4.11.2013 31.12.2013
(100)
(100)
(850)
(850)
(42,511,514)
(0)
(0)
(100)
31.12.2014
Statement of Financial Position
For the year ended 31 December 2014 and the year ended 31 December 2013 in PLN:
Statement of financial position
31.12.2014
Non-current assets
Current assets
Total assets
Equity
Current liabilities
TOTAL EQUITY AND LIABILITIES
(c)
4.11.2013 31.12.2013
317,226
262,030,085
262,347,312
(42,461,613)
304,808,924
262,347,312
49,901
49,901
49,901
49,901
Statement of Cash Flows
For the period from 1 January 2014 to 31 December 2014 and the period from 4 November 2013
to 31 December 2013 in PLN:
Statement of cash flow
31.12.2014
Net cash generated from operating activities
Net cash used in investing activities
Net cash used in financing activities
Total net cash flow
Cash and cash equivalents at beginning of the period
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
12.4
(9,742)
(15,529)
(25,271)
49,901
24,630
4.11.2013 31.12.2013
(100)
50,001
49,901
49,901
The auditor's opinion to the the financial statement of the Issuer for the period from 1 January
2014 to 31 December 2014
According to the auditor's opinion to the financial statement of the Issuer for the period from 1 January 2014
to 31 December 2014:
“We believe that the audit evidence we have obtained is sufficient and appropriate to issue the report.
In our opinion, the accompanying special purpose financial statements of MCI VP VI are prepared in
accordance with the rules applied by MCI VP VI and disclosed in the notes to the special purpose financial
statements and present a true and fair view of the statement of profit or loss and other comprehensive
income for the financial year from 1 January 2014 to 31 December 2014, statement of financial position as
at 31 December 2014, statement of changes in shareholders equity and the cash flow statement for the
financial year from 1 January 2014 to 31 December 2014 of MCI VP VI.
Without qualifying our conclusion, we draw your attention to the fact that the cumulative losses as of the
date 31 December 2014 in the amount of 42 511 614 PLN exceeded the sum of supplementary capital and
reserve capital and one-third of share capital. If the balance sheet prepared as at 31 October 2015, still will
91
present cumulative losses exceeding the sum of supplementary and reserves capital and one-third of the
share capital that based on Article 397 of Polish Commercial Companies Code, the Board will be obliged to
immediately convene a General Meeting in order to take a resolution regarding Company's further existence
as going concern.”
12.5
Legal and Arbitration Proceedings
The Issuer does not conduct any judicial, administrative or arbitration proceedings and has not conducted
such proceedings in the period of past 12 months, which, in the Issuer's best opinion, could have/had in the
past 12 months material impact on the financial situation and/or profitability of the Issuer.
12.6
Significant Change in the Issuer's Financial or Trading Position
On 16 February 2015 the Issuer entered into a non-revolving multicurrency loan agreement with Raiffeisen
Bank Polska Spółka Akcyjna. The loan in total amount of PLN30 million is to be repaid on 31 March 2018.
The interest rate is based on the WIBOR 1M plus bank's margin at 3 p.p. WIBOR 1M means one month
Warsaw Interbank Offer Rate.
On 20 April 2015 the Issuer issued a bill of exchange to MCI Venture Projects Spółka z ograniczoną
odpowiedzialnością X Spółka Komandytowo-Akcyjna with its seat in Warsaw, with maturity 6 months,
in the amount of PLN350,000, at interest rate 3.7 per cent. p.a.
The Issuer intends to transfer majority of ABC Data shares that are not subject to Initial Polish Pledge to an
entity owned by the Sub-Fund MCI.Euro Ventures 1.0.
13.
Additional Information
13.1
Share Capital
The Issuer's share capital is PLN50,000 and is divided into 50,000 (fifty thousand) equal series A ordinary
registered shares with the nominal value of PLN 1 each. The share capital has been paid up in full.
The shares are not preference shares.
13.2
Foundation Documents and Articles of Association
Articles of Association:
The valid wording of the Issuer's Articles
of Association was approved by the sole shareholder
acting as the General Meeting on 18 November
2013.
The scope of the Issuer's activity, according to §5
of the Issuer's Articles of Association, includes:
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(a)
activities of holding companies;
(b)
other financial service activities, except
insurance and pension funding not elsewhere
classified;
(c)
other activities auxiliary to financial
services, except insurance and pension
funding;
(d)
buying and selling of own real estate;
(e)
rental and operating of own or leased real
estate;
(f)
management of real estate on a fee
or contract basis;
(g)
activities of head offices and holding
companies, excluding financial holding
companies; and
(h)
management consultancy.
Foundation of the Issuer:
The Issuer was founded by on the basis of a Deed
of Foundation executed on 4 November 2013. The
Issuer was incorporated on 14 November 2013.
Deed of foundation:
The Issuer has been founded in compliance with the
laws of the Republic of Poland, i.e. the Polish Code
of Commercial Partnerships and Companies
effective as at the day of foundation. The Deed of
Foundation is filed in the District Court for capital
city of Warsaw, Commercial Division XII.
Line of business:
The Issuer's line of business is specified in Article 5
point 1 of the Issuer's Articles of Association.
14.
Material Contracts
(a)
ABC Data share purchase agreements
Agreements considered to be material are the agreements concluded by the Issuer, the value of which
exceeded 10% of the Issuer's assets as at 31 December 2014, i.e., PLN26,234,731.20 and those which, in the
Issuer's opinion, due to their specific subject matter or character, may be relevant for the Issuer's business
activity and financial standing.
The first ABC Data share purchase agreement was entered into on 26 September 2014 between MCI Venture
Projects spółka z ograniczoną odpowiedzialnością spółka jawna (MCI VP sp.j.) as the seller and the Issuer
as the purchaser (the First SPA).
By the First SPA MCI VP sp.j. sold 25,685,000 of the ABC Data shares (the First ABC Data Shares) to the
Issuer for the total price of PLN103,767,400, i.e., PLN4.04 per share, payable by 31 December 2015. As of
the date of this Prospectus, the price for the First ABC Data Shares has not been paid.
The second ABC Data share purchase agreement was entered into on 12 December 2014 between ABCD
Management spółka z ograniczoną odpowiedzialnością spółka jawna (ABCD Management) as the seller
and the Issuer as the purchaser (the Second SPA).
By the Second SPA ABCD Management sold 4,700,000 of the ABC Data shares (the Second ABC Data
Shares) to the Issuer for the total price of PLN18,377,000, i.e., PLN 3.91 per share, payable by 31 December
2015. As of the date of this Prospectus, the price for the Second ABC Data Shares has not been paid.
The third ABC Data share purchase agreement was entered into on 23 December 2014 between ABCD
Management as the seller and the Issuer as the purchaser (the Third SPA).
By the Third SPA ABCD Management sold 46,675,378 of the ABC Data shares (the Third ABC Data
Shares) to the Issuer for the total price of PLN181,100,466.64, i.e., PLN3.88 per share, payable by 31
93
December 2015. As of the date of this Prospectus, the price for the Third ABC Data Shares has not been
paid.
On 29 December 2015 the Issuer concluded additional agreements on the basis of which the date of payment
of the sale price for ABC Data shares agreed in First SPA, Second SPA and Third SPA was changed to 30
April 2016.
On 25 January 2016 the Issuer concluded annexes to the abovementioned sale agreements with the sellers of
ABC Data shares (ABCD Management sp. j. and MCI Venture Projects sp. j., also owned by the Sub-fund
MCI.EuroVentures 1.0.), on the basis of which these sellers of ABC Data shares under the First SPA,
Second SPA and Third SPA waived their right to withdraw from these agreements if the Issuer fails to pay
the sale price before the settlement date.
(b)
Credit agreement executed on 16 February 2015
As of the date of this Prospectus, the facility under the Credit Agreement has not been drawn by the Issuer in
any amount.
On 16 February 2015, a credit agreement was concluded between the Issuer and Raiffeisen Bank Polska
Spółka Akcyjna (the Bank) (the Credit Agreement). The Credit Agreement was modified by an annex
dated 2 April 2015. The Credit Agreement contains standard provisions applicable to the credit agreements
on the Polish market.
Based on the Credit Agreement, the Bank granted to the Issuer a non-revolving credit of up to the amount of
PLN 30,000,000. The interest rate on the facility is equal to the WIBOR1M for the PLN deposits plus 3,0
percentage points. The purpose of the facility was to finance/refinance capital investments. The facility can
be used by the Issuer gradually during the period until 31 March 2018, which is the final repayment day. The
Credit Agreement includes the conditions which must be fulfilled before utilization of the facility.
The Credit Agreement is secured by:
(a)
(b)
(c)
(d)
Pledge agreement executed on 16 February 2015 (as described below in details);
Corporate guarantee to the amount of PLN 45,000,000 issued by the Guarantor (the Corporate
Guarantee). The Corporate Guarantee is valid at least 6 months longer than the final repayment
day of the credit under the Credit Agreement;
Account of credit servicing – special bank account, created under a separate agreement about
establishing a reserve of credit servicing concluded on 16 February 2015, on which the funds in
amount of 6-month interest payments i.e. in amount of PLN 850.000 shall be collected; and
Power of attorney to the Issuer's current bank account and to the others Issuer's accounts kept by
the Bank.
The Credit Agreement contains the provisions under which the additional security of the credit facility may
be required if the value of the ABC Data share subject to security under the financial pledge drops below the
indicated level and consequences of failure to provide such additional security, including in particular Bank's
right to sell the ABC Data shares subject to such security or terminate the Credit Agreement.
The Issuer shall repay the facility under the Credit Agreement in 4 installments, payable on 30 September
2016, 31 March 2017, 30 September 2017 and on the final repayment day, i.e. 31 March 2018.
Under provisions of the Credit Agreement, the Issuer has declared, that it submits to execution in the manner
specified in article 97 of the Banking Law (Journal of Laws 2015, item 128, as amended), to the total amount
of the current liability including interests and the other costs, however to the amount not higher than PLN
45,000,000.
The Bank is entitled issue a bank enforcement title to the amount up to PLN 45,000,000. According to the
Credit Agreement, the Bank may apply for an enforcement clause of the bank enforcement title until 31
March 2021.
If the event of default listed in the Credit Agreement occurs, the Bank is entitled in particular to terminate
the Credit Agreement in whole or in part with 30 days notice or - in the event of bankruptcy or threatening
94
bankruptcy of the Issuer - with 7 days notice. In this case, the Issuer will be obliged to repay the credit with
due interest and all others costs, no later than the last business day after the termination period.
The Credit Agreement has been considered material due to its subject matter and value.
(c)
Pledge agreement executed on 16 February 2015
On 16 February 2015, a financial pledge agreement on shares was concluded between the Issuer and the
Bank (the Pledge Agreement). The Pledge Agreement was amended by an annex dated 2 April 2015. The
Pledge Agreement contains standard provisions applicable to the financial pledge agreements on the Polish
market.
The Pledge Agreement was concluded to secure the Bank's claims against the Issuer arising under the Credit
Agreement described above (the Secured Claim).
Under the Pledge Agreement, the Issuer was obliged to establish to the benefit of the Bank a financial pledge
on 20,775,624 shares of the total nominal value of PLN 20,775,624 issued by ABC Data (Shares). For the
purposes of the Pledge Agreement the parties thereof agreed that the total market value of the Shares
amounts to PLN 75,000,000.
According to the provisions of the Pledge Agreement, the Bank has the right to satisfy due Secured Claim, if
the conditions specified in the Pledge Agreement are met, by:
(a)
(b)
coming into possession of the Shares,
selling the Shares in accordance with the procedure set out in the Pledge Agreement.
As of the date of this Prospectus, the financial pledge under the Pledge Agreement has been established.
The agreement has been considered material due to its subject matter and value.
15.
Third Party Information and Statement by Experts and Declarations of any Interest
The Prospectus does not include any representation or report, except for the auditors' opinions, of any person
acting as an expert. Certain data stated herein have been obtained from third parties. Such data have been
accurately replicated, to the Issuer's best knowledge and to the extent in which such data could be obtained
from information published by a third party. No facts have been omitted that would render the
abovementioned data inaccurate or misleading.
Auditor's opinion on financial statements of the Issuer for the the period from 4 November 2013 to 31
December 2013 has been prepared by the:
Audit firm:
License no.:
477
Registered office:
Responsible person:
Cezary Bąkiewicz
License no.:
12232
Auditor's opinion on financial statements of the Issuer for the period from 1 January 2014 to 31 December
2014 has been prepared by the:
Audit firm:
License no.:
477
Registered office:
95
Responsible person:
Cezary Bąkiewicz
License no.:
12232
To the extent known to the Issuer, the abovementioned entities have no material interest in the Issuer.
16.
Documents on Display
The audited financial statements of the Issuer and auditor's opinions thereof, are, available for inspection
during the standard working hours, upon request at the Issuer's registered office, and on the Issuer's website
www.privateequitymanagers.pl/mci-euroventures-1-0/#mci-vp-vi-ska.
Any annual reports are available at the same place. Any other documents and materials specified herein and
relating to the Issuer, including any past financial data of the Issuer and its subsidiaries for each of the two
financial years prior to the publication of this Prospectus, and the Issuer's Articles of Association and are
also available for inspection at the Issuer's registered office.
Any documents specified in this section will be available at the aforementioned locations until the expiration
of this Prospectus.
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INFORMATION ABOUT THE GUARANTOR
1.
General information about the Guarantor
MCI Capital Spółka akcyjna
Legal form:
joint stock company
Registered office:
Warsaw
Poland
Address:
ul. Emilii Plater 53, 00-113 Warsaw
Poland
Telephone no:
(+48) 22 540 73 80
Fax:
(+48) 22 540 73 81
Website address:
www.mci.pl
E-mail address:
office@mci.eu
KRS (National Court Register):
0000004542
REGON number:
932038308
NIP number:
8992296521
2.
Incorporation and History of the Guarantor
The Guarantor was established under a founding deed of a joint stock company on 16 July 1999, under the
name MCI Management Spółka akcyjna.
On 17 November 2015 Guarantor's Extraodrinary General Meeting adopted a resolution regarding a change
of the Guarantor's name from MCI Management Spółka akcyjna into MCI Capital Spółka akcyjna. The
change of the name of the Guarantor became effective from the day of registration of this change by the
registry court, i.e. from 2 December 2015.
In business transactions the Guarantor may use the abbreviated form of its name: MCI Capital S.A. and its
distinguishing graphic sign, as well as translations of its name into foreign languages.
The Guarantor was registered by the District Court for Wrocław-Fabryczna, VI Commercial Registry
Division, on 21 July 1999, in the Commercial Register under the number in Wrocław RHB 8752. Following
the formation of the National Court Register, the Guarantor was entered into the Register of Business
Entities on 28 March 2001, by the District Court for Wrocław-Fabryczna in Wrocław, VI Commercial
Division of the National Court Register under the number KRS 0000004542, under the name MCI
Management S.A. As of the date of this Prospectus the Guarantor is entered into the Register of Business
Entities kept by the District Court for Warsaw in Warsaw XII Commercial Division of the National Court
Register under the name MCI Capital S.A.
The Guarantor was established for an indefinite time.
97
The Guarantor operates under the laws of Poland, including, in particular the Commercial Companies Code,
the Guarantor's Articles of Association, as well as the Guarantor's other internal regulations.
The following events in the development of the Guarantor's business activity have been relevant up-to-date:
The Guarantor was established, incorporated and started business operations in July 1999. In 2000, the
Guarantor conducted its first public offering. The funds raised in that offering in the amount of
PLN24,200,000 were used in full for capital investments and the Guarantor's development in the subsequent
years of its operation. The Guarantor's shares started to be listed on the GPW in January 2001.
In the years 1999-2002, the Guarantor made many capital investments in the IT, Internet and e-commerce
sector, forming the Guarantor's capital group. In the years 2002-2003 it made its first capital investments in
the mobile technology sector.
In September 2004, the Guarantor conducted the first public issue of bonds convertible into shares.
As a result of the sale of 1,670 convertible bonds, PLN10,200,000 was raised. The funds were used for the
Guarantor's further investments.
In 2005, the Guarantor's portfolio company conducted the first public offering of an e-commerce company
on the Polish market, listing the shares of Travelplanet.pl S.A. on the GPW.
In 2006, the Guarantor made its first foreign investment, acquiring shares in a Czech company called Retail
Info s.r.o. In the same year, the Guarantor established MCI TFI, preparing the Guarantor's capital group for
starting activity in the area of establishing and managing investment funds.
In 2007, the Guarantor made its first investment in the biotechnology sector, acquiring shares in Finepharm
Sp. z o.o. Further, two members of the Guarantor's capital group, i.e., S4E S.A. and Digital Avenue S.A.,
debuted on the stock exchange. Both companies debuted on NewConnect, the GPW's new alternative
market. In October 2007, the Guarantor made investment on a new foreign market by acquiring shares in a
Bulgarian company called Nexcom. At the same time, the Guarantor conducted a successful PLN50,000,000
two-year bond issue. The funds raised from the issue were used for investment within the Guarantor's Group.
In December 2007, MCI TFI was granted permission by the PFSA to carry out activity consisting
of establishing and managing investment funds. In this way, the Guarantor's operating model started to
change and the Guarantor's new formula and operating structure started to be introduced. As part of those
changes, MCI TFI became a management entity of private equity investment funds. The Guarantor also
started the procedure of transferring its shareholdings in portfolio companies to Sub-fund
MCI.TechVentures 1.0 and Sub-fund MCI.EuroVentures 1.0 operating within the Fund, in return for the
Sub-Funds' investment certificates and made its first buy-out, acquiring shares in ABC Data. It was the
largest investment in terms of value in the Guarantor's history.
In January 2008, MCI TFI started the process of establishing a new investment fund under the name Helix
Ventures Partners FIZ by filing a relevant application with the PFSA. The Helix Ventures Partners FIZ fund
started to operate in May 2009. In the end of the year, the process of transferring the Guarantor's
shareholdings in portfolio companies to MCI PrivateVentures S.K.A. (MCI FM subsidiary), and, ultimately,
to the Sub-Funds operating within the Fund, started.
In 2009, MCI TFI jointly with the Robert Nejman management team established a new specialist investment
fund: MCI Gandalf Aktywnej Alokacji SFIO and started distributing the investment certificates of Sub-fund
MCI.TechVentures 1.0. to investors from outside the Guarantor's Group. In August 2009, a total exit was
made from Bankier.pl S.A. through its sale to a strategic investor. The Guarantor also conducted a successful
PLN50,000,000 private placement of the series B three-year bonds convertible into shares maturing on 10
September 2012. In October 2009, the bonds debuted on the Catalyst bond market. These bonds were the
first corporate bonds listed on the new Alternative Trading System (ASO) run by the GPW on the Catalyst
(retail trading area).
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In 2010, the Guarantor made a total exit from S4E S.A. and One-2-One S.A. In June 2010, ABC Data, the
most important portfolio company of the investment funds managed by MCI TFI, whose shares were also
held by the Guarantor, deputed on the stock exchange and at the same time, MCI TFI, together with IIF
Group S.A. and Krajowy Fundusz Kapitałowy S.A., signed an agreement establishing a new investment
fund, Internet Ventures, which was to operate within the FIZ structure. The Internet Ventures fund was to
operate in the high-tech area with investment funds totaling PLN100,000,000. In July 2010, series E ordinary
bearer bonds were issued, which made it possible for the Guarantor to raise PLN27,450,000. The bonds were
offered in a private placement. The nominal value of one bond was PLN1,000. The bonds were not secured.
The bond maturity date was 28 June 2013.
Helix Ventures Partners FIZ, represented by MCI TFI, signed an agreement whereby the Fund was to invest
its funds in the eBroker.pl project, a financial comparison engine and it also made its first investment in
mSejf Sp. z o.o., a Software as a type of service, enabling the creation of back-up copies of online data and
simple and quick data recovery in case of loss Helix Ventures Partners FIZ. In the end of the year, Helix
Ventures Partners FIZ invested PLN1,500,000 in SerwisPrawa.pl, an internet portal set up for those seeking
legal information and advise on a daily basis, especially in the areas of law relating to individuals and
businesses.
In September 2010, MCI.BioVentures FIZ invested in ART. CASCO Sp. z o.o., a start-up company which
was to offer innovative health insurance. The innovative nature of the project consisted of combining
insurance and banking services, which was to give the clients an opportunity to use every medical facility
and hospital in Poland. At the same time, Sub-fund MCI.TechVentures 1.0 signed an investment agreement
with Netretail Holding B.V., a company running MALL.CZ, operating on the Czech e-commerce market.
The investment was made jointly with Intel Capital. Sub-fund MCI.TechVentures 1.0 and Intel invested
jointly EUR10,000,000.
In December 2010, MCI TFI, on behalf of the MCI.BioVentures FIZ fund, signed an investment agreement
with Biotech, a company developing and launching innovative niche dietary supplements. It also established
a new investment fund under the name MCI.ImmoVentures FIZ.
In December 2010, the Guarantor's Extraordinary General Meeting approved the Guarantor's Group
development plan proposed by the Guarantor's Management Board. The new organizational structure was
to make it possible to recognize the goodwill of the company and the management teams by separating
the Guarantor's fund management business from its investment business and to combine income from
management services with operating costs, which was to strengthen cost control and evaluation
of management efficiency. The first stage of the project was undertaken still in 2010 and consisted of
contributing the asset management services, i.e., management and consultancy agreements related
to the managed funds, to the new company. The teams managing individual funds were also transferred. As a
result, the Guarantor has remained an ultimate investor owning the assets invested in individual funds
(through the investment certificates held in individual FIZes); it was to be the fund of funds (FOF) type of
investment activity. A large group of investors investing on the private equity/venture capital market through
the Guarantor's Group (holders of investment certificates in this case) started to include individual investors
(banking sales channels), public institutions (such as Krajowy Fundusz Kapitałowy S.A. or pension funds),
and also other FOFs, including the Guarantor.
At the beginning of 2011, the Guarantor's registered office was moved from Wrocław to Warsaw. In
March 2011, Internet Ventures FIZ was registered and started its operating activity. At the same time, Helix
Ventures Partners FIZ invested PLN3,500,000 in Air Ventures Polska S.A., a company offering the first and
only Polish aircraft co-ownership program under the name Sky Share addressed mainly to business clients.
Also, the series F ordinary bearer bonds were issued, which made it possible for the Guarantor to raise
PLN35,350,000. The bonds were offered in a private placement. The nominal value of one bond was
PLN1,000. The bonds were not secured. The maturity date was 31 March 2014.
On 17 January 2013, the Court of Appeal in Wrocław, I Civil Division, in a suit brought by the Guarantor
against the State Treasury – the Head of the Treasury Control Office in Wrocław, validly adjudged PLN
99
28,821,828.20 plus statutory interest from 8 June 2006, until the date of payment from the State Treasury to
the Guarantor. The amount was adjudged as compensation for the damage incurred by the Guarantor
in connection with the loss of value of the shares held by the Guarantor in JTT Computer S.A. which was
brought to bankruptcy as a result of wrong decisions made by tax authorities in violation of the law. The
aforementioned ruling was overruled by Supreme Court on 26 March 2014. At present the claim of the
Guarantor against State Treasury is still being heard by Court of Appeal in Wrocław.
On 25 April 2012, the Guarantor's Supervisory Board adopted an incentive scheme for some members of the
Guarantor's Management Board, and, therefore, on 5 June 2012, the Guarantor's Ordinary General Meeting
adopted a resolution regarding a conditional increase in the share capital by PLN400,000.
In September 2012, the Guarantor repaid the principal in the amount of PLN22,500,000 plus statutory
interest of PLN1,027,297.50 under the series B convertible bonds issued in 2009 and the Guarantor's
Extraordinary General Meeting adopted a resolution regarding a conditional increase in the Guarantor's share
capital. The Guarantor also granted a surety for the facility granted by Alior Bank S.A. to Sub-fund
MCI.EuroVentures 1.0. by signing the "Declaration of submission to enforcement under the bank
enforcement order" as security of the facility of PLN41,000,000 granted to Sub-fund MCI.EuroVentures 1.0.
The bank may carry out enforcement under the enforcement order up to PLN82,000,000 within 24 months
from the date of termination of the facility agreement.
In 2013, the Guarantor issued the PLN55,800,000 secured series H1 and H2 bearer bonds. It also made
investment in Answear.com, the largest multi-brand fashion e-shop in Poland and Central and Eastern
Europe offering more than 200 most popular international brands in the area of clothes, shoe wear, and
accessories by acquiring 27% of shares in the company and made a partial exit from Invia.cz through the sale
of a minority stake to Mezzanine Management and dividend payment (proceeds of some PLN28,000,000). In
the end of the year, the Guarantor issued the PLN30,000,000 secured series H3 bearer bonds.
In 2014, a major personnel change was made at the Guarantor, i.e., Cezary Smorszczewski was appointed
President of the Guarantor's Management Board. The previous President of the Guarantor's Management
Board, Tomasz Czechowicz, was appointed Vice President of the Guarantor's Management Board
responsible for investment activity in the Internet and high-tech sector and for the management of the
existing investment portfolio. The appointment of Cezary Smorszczewski as President of the Guarantor's
Management Board strengthened the Guarantor's buyout powers and its position on foreign markets,
especially in Central and Eastern Europe. Mr. Smorszczewski also became a large shareholder
in PEManagers and was to support the Guarantor in fund raising and the PEManagers IPO. Further, Ewa
Ogryczak was appointed member of the Guarantor's Management Board and now acts as the Guarantor's
Financial Director. On the same date, Wojciech Marcińczyk, Sylwester Janik, and Norbert Biedrzycki
submitted their resignations as the Guarantor's Management Board members.
In March 2014, the Guarantor issued bonds convertible into series G1 shares with the maturity date on 21
March 2018 for PLN50,000,000 and at the same time it redeemed, as scheduled, the series F bonds for a total
of PLN35,300,000. The aim of the issue was to finance current financial operations. In October 2014, it
further issued the series I1 bonds with the maturity date on 17 October 2017, for PLN31,000,000.
The strategic project of the Guarantor's Group in 2014 was to separate the asset management company,
PEManagers. That operation made it possible to raise additional capital which was used for new prospective
investments. Following the settlement of the sale of shares, the Guarantor was left with a 10.25% direct
shareholding in PEManagers. Sub-fund MCI.EuroVentures 1.0, in which the Guarantor holds a majority
of investment certificates through its subsidiaries, was left with a 12.35% shareholding in PEManagers. In
the first six months of 2014, the Guarantor lost control of its subsidiary, PEManagers, which remains
a Guarantor's associate.
On 11 December 2015, the Guarantor issued 66,000 series J bonds of total nominal value PLN66,000,000
with the maturity date on 11 December 2018.
100
On 10 March 2016 MCI.TechVentures 1.0. – a sub-fund of MCI.PrivateVentures closed-end fund, in which
MCI Capital S.A. holds through its subsidiaries 63.77% of investment certificates sold its entire stake in
Invia.cz, a.s. (i.e. 984,566 shares) in favor of Rockaway Travel SE. The amount of the transaction equaled to
EUR55.9 million (ca. PLN241 million).
3.
3.1
Financial statements for the financial years ended 31 December 2015 and 31 December 2014
The Guarantor's individual financial statements for the financial years ended 31 December 2015 and 31
December 2014 and the Guarantor's capital group's consolidated financial statements for the financial year
ended 31 December 2014 were audited by:
Audit firm:
KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k.
License no.:
3546
Registered office:
ul. Inflancka 4A, 00-189 Warsaw, Poland
Responsible person:
Ewa Jóźwik (license no. 11154) and Stacy Ligas
The entity to audit financial statements for the reporting period from 1 January to 31 December 2014 was
selected by the Guarantor's Supervisory Board resolution dated 27 May 2014. The entity to audit financial
statements for the reporting period from 1 January to 31 December 2015 was selected by the Guarantor's
Supervisory Board resolution dated 13 March 2015.
3.2
Financial statements for the financial year ended 31 December 2013
The Guarantor's individual financial statements and the Guarantor's capital group's consolidated financial
statements for the financial year ended 31 December 2013 were audited by:
Audit firm:
PKF Consult Spółka z ograniczoną odpowiedzialnością
License no.:
477
Registered office:
ul. Okrzycka 6, lok. 1B, 02-695 Warsaw, Poland
Responsible person:
Ewa Ogryczak (license no. 11577)
The entity to audit financial statements for the reporting period from 1 January to 31 December 2013 was
selected by the Guarantor's Supervisory Board resolution dated 28 June 2013.
3.3
Information on the auditor's resignation, dismissal or change
In the period covering the historic financial information there was a change of the auditor of the Guarantor's
financial statements. The change was introduced on the basis of the new Guarantor's internal policy which
assumed periodic changes of entities auditing the Guarantor's individual and consolidated financial
statements to ensure a diversified assessment of the financial statements (i.e. made by more than one entity).
4.
Risk Factors
The risk factors are included on pages 14-19 of this Prospectus under the chapter Risk Factors Related to the
Guarantor and the Guarantor's Group.
101
5.
Recent Events Related to Guarantor's Solvency
The Guarantor's net profit for the first half of 2015 was PLN103 million. The Guarantor's net assets
increased by 10% as compared to the end of 2014 and totalled PLN1.136 million. Hence, as at the 30 June
2015 the net asset value per share was PLN18.10, which was 50% above shares closing quotation on the
Warsaw Stock Exchange as of that day.
On 3 June 2015 the Guarantor's Shareholders Meeting assembled and approved of the Guarantor's Financial
Statements for 2014, of the Directors' Report for 2014 and of the Supervisory Board's report for 2014.
Due to experience and considerable network of contacts and partners the Guarantor has vast access to new
investment projects. A very dynamic development of the internet sector - constituting the main segment of
the Guarantor's interest - creates a number of investment opportunities. The MCI Group assess that with a
day-to-day liquidity of PLN300 million in the MCI Group (cash and pre-approved loans) and consider the
Guarantor to be privileged as compared to its competitors and will be able to use the market investment
potential.
6.
Business Overview
6.1
Investments
Direct investment activity in private equity / venture capital comprises purchasing and disposing of financial
assets on the MCI Group's entities own account. Hence, the most significant assets of this segment comprise
shares in companies and financial instruments such as bonds, investment certificates, foreign bills
of exchange, borrowings and deposits. Currently this is the main segment of the MCI Group.
Capital Management
Foreign investment capital management - comprises assets and liabilities related to external operations
of providing capital management services (in particular investment funds).
The Guarantor was established in 1999 and is one of the leading private equity groups in the CEE region. So
far the Guarantor has run its business in two areas: (i) in the investment segment and (ii) in the asset
management segment. The Guarantor is also interested in investments in the new technologies sector, in
particular Internet, IT distribution and TMT.
In 2014 operations related to asset management were separated from The Guarantor's structures, hence the
Guarantor became an investment vehicle whose profit/ loss in the current period will be fully dependent on
the value of investment certificates it holds.
At present the Guarantor represents a separate and exclusive operating segment - segment of investments i.e. purchasing and disposing of financial assets for the Guarantor's own account. The Guarantor runs direct
operations of the private equity / venture capital type, investing its assets through 5 investment funds which
apply diversified investment strategy. Funds make investments in investment assets in line with their
investment strategy, from big buyout and growth investments (MCI.EuroVentures 1.0 FIZ and
MCI.TechVentures 1.0 FIZ) through investments in small technological companies starting their operations
(Helix Ventures FIZ and Internet Ventures FIZ) to debt instruments and property (MCI.CreditVentures 2.0
FIZ). Investments in portfolio companies are made for several years when a manager actively supports the
development of companies and supervises the accomplishment of their business strategy and seeks
opportunities for the asset disposal. The most significant assets of this segment are shares in companies and
other financial instruments such as bonds, investment certificates, foreign bills of exchange, borrowings and
deposits.
102
6.2
The Guarantor's development is closely linked to possibilities of making new investments in promising and
technologically advanced economic projects. The market observes increased competition of other funds
(venture capital, private equity) and business angels interested in making investments in companies from the
sector of new technologies. The Guarantor's Management Board has addressed this risk through
geographical expansion to new and perspective markets where the competition is smaller. A material
competitive advantage of the Guarantor is its recognition in Poland and abroad, which allows to win new
projects.
7.
Organisational Structure
Please see the structure chart and description on page 85 of the Prospectus.
The parent entity of the Guarantor is Alternative Investment Partners Sp. z o.o., a subsidiary of Tomasz
Czechowicz, President of the Guarantor's Management Board.
The Guarantor's direct subsidiaries are:

MCI FM (shareholder of MCI FM sp.j. and general partner in MCI Fund Management Sp. z o. o. II
MCI.PrivateVentures S.K.A. and MCI Fund Management Sp. z o. o. IV MCI.PrivateVentures
S.K.A.);

MCI Fund Management Sp. z o. o. II MCI.PrivateVentures S.K.A.;

MCI Fund Management Sp. z o. o. IV MCI.PrivateVentures S.K.A.;

MCI Ventures Sp. z o. o.
The Guarantor's indirect subsidiaries are:

MCI FM sp.j.;

Bizneslinkco Sp. z o.o. (former AWL III Sp. z o.o.).
The Guarantor holds directly or indirectly 100% of shares and 100% voting rights in all the above mentioned
companies.
The main shareholder of the Guarantor is Alternative Investment Partners Sp. z o.o., a subsiadiary of Tomasz
The Guarantor holds 100 % of shares in MCI FM.
8.
Trend Information
The Guarantor is not aware of any material adverse change in the prospects of the Guarantor since
31 December 2015.
The Guarantor is not aware of any trends, obligations or events that might have a significant impact on the
prospects of the Guarantor for the subsequent accounting period.
9.
The Guarantor did not make a profit forecast or estimate for the year 2016 or any other future period.
103
10.
Administrative, Management and Supervisory Bodies
10.1
The Guarantor's Management Board
The Guarantor's Management Board is a body authorised to represent the Guarantor. The Guarantor's
Management Board is composed of one to seven members, including the President of the Management
Board, appointed for three years. Members of the Guarantor's Management Board were not entrusted with
any particular functions within the scope of their duties as members of the Guarantor's Management Board,
except for the function of CEO and CFO assigned respectively to Tomasz Czechowicz and Ewa Ogryczak.
Members of the Guarantor's Management Board are appointed by the Guarantor's Supervisory Board.
Declarations of will on behalf of the Guarantor may be made by two members of the Guarantor's
Management Board jointly or one member of the Guarantor's Management Board jointly with the holder of
the commercial power of attorney. Detailed procedures of the Guarantor's Management Board operation are
set out in the By-Laws of the Guarantor's Management Board. The By- Laws are adopted by the Guarantor's
Management Board and approved by a resolution of the Guarantor's Supervisory Board.
As of the date of this Prospectus, the Guarantor's Management Board consists of the following members:
(a)
Tomasz Czechowicz – President of the Guarantor's Management Board; CEO
He holds a Master of Science in Business Management degree granted by the Academy of
Economics in Wrocław in 1997. He also completed post-graduate studies in management organized
by the Warsaw School of Economics in 1998. Also in 1998, he was granted an MBA degree by the
Minnesota University. In 1994, he was granted an engineering degree in Manufacturing
Organization by the Wrocław Technical University.
He has gained his professional experience in the following entities: JTT-Computer S.A., MCI
Capital S.A., Geewa a.s., Invia.cz a.s., Frisco.pl S.A., European Institute of Technology and
Innovation, KupiVIP Holding, Windeln.de, Indeks Bilgisayar Sistemleri Mühendislik Sanayi ve
Ticaret A.Ş. and Giełda Papierów Wartościowych w Warszawie S.A. (GPW).
Since July 1999 he has been on the Guarantor's Management Board. As part of his function at the
guarantor he conducts activities provided for the Guarantor's Management Board members by the
Guarantor's Articles of Association.
The place of Tomasz Czechowicz's work is the Guarantor (ul. Emilii Plater 53, 00-113 Warsaw,
Poland) and PEManagers (Rondo ONZ 1, 00-124 Warsaw, Poland), where he is vice president of the
management board.
Except for his function at the Guarantor, Tomasz Czechowicz performs the following functions
which could be of relevance for the Guarantor:

ABC Data's supervisory board member (since 2007, on and off);

vice president of ABCD Management S.A.'s management board (since 2012);

president of Alternative Investment Partners sp. z o.o.'s management board (since 2010);

president of DI Roberto sp. z o.o.'s management board (since 2013);

Frisco S.A.'s supervisory board member (since 2012);

Grupa Wirtualna Polska sp. z o.o.'s supervisory board member (since 2014);

president of MCI Asset Management sp. z o.o.'s management board (since 2013);
104

vice president (former member) of MCI TFI's management board (since 2007);

president of MCI FM's management board (since 2007);

president of the management board of MCI Venture Projects sp. z o.o. with its registered
office in Warsaw (since 2012);

MORELE.NET sp. z o.o.'s supervisory board member (since 2012);

Wirtualna Polska Holdings S.A.'s supervisory board member (since 2014);

Private Equity Managers S.A.'s management board member (since 2012).
Except for his function at the Guarantor, Tomasz Czechowicz does not perform any functions,
other than those mentioned above, which could be of any relevance for the Guarantor.
Tomasz Czechowicz holds 1.429.486 shares of the Guarantor, accounting for 2.28% of the share
capital and giving 2.28% of voting rights at the Guarantor's General Meeting.
Tomasz Czechowicz is the parent of Alternative Investment Partners Sp. z o.o. which holds
31,246,720 shares of the Guarantor, accounting for 49.81% of the share capital and giving 49.81%
of voting rights at the Guarantor's General Meeting.
(b)
Wojciech Marcińczyk – Vice President of the Guarantor's Management Board
He holds a Master of Science in Engineering degree granted in 1994 by the Warsaw Technical
University and a Master's degree in accounting and finance granted in 1999 by the Warsaw
University. He is a Fellowship member of the ACCA and he was granted a Master of Business
Administration (MBA) degree by the Illinois University.
He has gained his professional experience in the following entities: E-TELBANK sp. z o.o.,
EXATEL S.A., NIEZALEŻNY OPERATOR MIĘDZYSTREFOWY sp. z o.o., BILLBIRD S.A.,
DELOITTE BUSINESS CONSULTING S.A. and POLSKA TELEFONIA CYFROWA sp. z o.o.
Since June 2015 he has been on the Guarantor's Management Board. As part of his function at the
Guarantor he conducts activities provided for the Guarantor's Management Board members by the
Guarantor's Articles of Association;
The place of Wojciech Marcińczyk's work is the Guarantor (ul. Emilii Plater 53, 00-113 Warsaw,
Poland) and MCI Fund Management spółka z ograniczoną odpowiedzialnością MCI.PrivateVentures
S.K.A (ul. Emilii Plater 53, 00-113 Warsaw, Poland);
Except for the Guarantor Wojciech Marcińczyk does not perform any functions, other than those
mentioned above, which could be of any relevance for the Guarantor.
(c)
Ewa Ogryczak – Vice President of the Guarantor's Management Board; CFO
She holds a Master's degree granted in 2003 by the Warsaw School of Economic.
She has gained her professional experience in the following entities: KPMG Audyt sp. z o.o., PKF
Consult sp. z o. o., OGRYCZAK&OGRYCZAK sp.j. and Private Equity Managers S.A.
Since June 2015 she has been on the Guarantor's Management Board. As part of her function at the
Guarantor she conducts activities provided for the Guarantor's Management Board members by the
105
The place of Ewa Ogryczak's work is the Guarantor (ul. Emilii Plater 53, 00-113 Warsaw, Poland).
Except for the Guarantor Ewa Ogryczak does not perform any functions, other than those mentioned
above, which could be of any relevance for the Guarantor.
(d)
Tomasz Masiarz – member of the Guarantor's Management Board
He holds a Master of Law degree granted by the Faculty of Law and Administration of the Warsaw
university.
He has gained his professional experience in the following entities: Dubiński, Fabrycki, Jeleński i
Wspólnicy Kancelaria Prawna sp.k., Alternative Investment Partners sp. z o.o., Vogel Dubiński i
Wspólnicy Kancelaria Prawna sp.k. and Templar Wealth Management S.A.
Since June 2015 he has been on the Guarantor's Management Board. As part of his function at the
Guarantor he conducts activities provided for the Guarantor's Management Board members by the
The place of Tomasz Masiarz's work is Dubiński, Fabrycki, Jeleński i Wspólnicy Kancelaria Prawna
sp.k.
Tomasz Masiarz's core activity performed outside the Guarantor is practicing law with Dubiński,
Fabrycki, Jeleński i Wspólnicy Kancelaria Prawna sp.k., (ul. Zielna 37, 00-108 Warsaw, Poland),
where he has been a limited partner since 2011.
Except for his function at the Guarantor, Tomasz Masiarz does not perform any functions, other than
those mentioned above, which could be of any relevance for the Guarantor.
The Guarantor is not aware of any potential conflict of interest of persons representing the
Guarantor's Management Board between any of their duties to the Guarantor and their private
interests. According to representations submitted by each member of the Guarantor's Management
Board, with respect to any of these persons there is no conflict of interest or potential conflict of
interest between these persons' duties to the Guarantor and their private interests or other duties.
10.2
The Guarantor's Supervisory Board
The Guarantor's Supervisory Board is a body responsible for continuous supervision of the Guarantor's
activity in all areas of the Guarantor's activity. The Guarantor's Supervisory Board consists of five to eight
members, including the Chairman of the Supervisory Board and Vice Chairman of the Supervisory Board.
Members of the Guarantor's Supervisory Board are appointed by the Guarantor's General Meeting and,
pursuant to the Guarantor's Articles of Association:
(a)
as long as the shareholder of Alternative Investment Partners sp. z o.o. holds at least 20% of voting
rights at the Guarantor's General Meeting that shareholder appoints and dismisses one member of the
Guarantor's Supervisory Board;
(b)
the Guarantor's General Meeting elects and dismisses the other members of the Guarantor's
Supervisory Board.
If the number of voting rights held by Alternative Investment Partners sp. z o.o. at the Guarantor's General
Meeting is reduced below 20%, that shareholder loses its right to appoint and dismiss one member of the
Guarantor's Supervisory Board, and the mandate of the Guarantor's Supervisory Board member appointed by
that shareholder expires. The expiration of the mandate is confirmed by a resolution of the Guarantor's
Supervisory Board at its nearest meeting.
106
If the mandate of the Guarantor's Supervisory Board member expires for any reason specified above or due
to the resignation submitted by the Guarantor's Supervisory Board member elected by the Guarantor's
General Meeting, the other members of the Guarantor's Supervisory Board may co-opt a new member who
will perform his/her duties until a new member of the Guarantor's Supervisory Board is elected by the
Guarantor's General Meeting, no longer, however, than by the expiration date of the term of office of the
new member's predecessor. The Guarantor's Supervisory Board may not include more than one member
appointed in this way.
At least two members of the Guarantor's Supervisory Board should comply with the criteria of independence
from the Guarantor and from the entities significantly related to the Guarantor, referred to in Annex II of the
EC Commission Recommendation of February 15, 2005, on the role of non-executive or supervisory
directors of listed companies and on the committees of the (supervisory) board and the guidelines of rule 6,
Title III of the Code of Best Practice for the GPW listed companies, attached as Annex no. 20/1287/2011 of
the GPW Council of October 19, 2011, or specified in other regulations relating to independence criteria for
independent members of supervisory boards of listed companies applicable on the election date of the
independent member. At least one of the independent members of the Guarantor's Supervisory Board should
be qualified in the area of accounting and finance.
If no candidate is proposed for an independent member of the Supervisory Board, the independent member
of the Guarantor's Supervisory Board is not appointed. If an independent member of the Supervisory Board
is dismissed or his/her mandate expires for any other reasons, the Management Board promptly notifies
Alternative Investment Partners sp. z o.o., if that shareholder has appointed the member of the Guarantor's
Supervisory Board, in order to appoint a new independent member of the Guarantor's Supervisory Board or
promptly convenes the Guarantor's General Meeting to appoint a new independent member of the
Guarantor's Supervisory Board. The reason for dismissal of the independent member of the Guarantor's
Supervisory Board from the Guarantor's Supervisory Board may be, in particular, such member's ceasing to
comply with the independence criteria.
The term of office of the Guarantor's Supervisory Board is three years.
The Guarantor's Supervisory Board operates according to the By-Laws adopted by the Guarantor's
Supervisory Board and approved by the Guarantor's General Meeting.
As of the date of this Prospectus, the Guarantor's Supervisory Board consists of the following members:
(a)
Hubert Janiszewski - chairman of the Guarantor's Supervisory Board
Since 2008 he has been a chairman of the Guarantor's Supervisory Board. As part of his function
at the Guarantor, he conducts activities provided for the chairman of the Guarantor's Supervisory
Board by the Guarantor's Articles of Association.
Except for the Guarantor, he does not perform any functions, other than those mentioned above,
which could be of any relevance for the Guarantor.
(b)
Piotr Czapski – member of the Guarantor's Supervisory Board
Since May 2013, he has been member of the Guarantor's Supervisory Board. As part of his function
at the Guarantor he conducts activities provided for the Guarantor's Supervisory Board members
by the Guarantor's Articles of Association.
Piotr Czapski is self-employed under the name Piotr Czapski.
Except for his function at the Guarantor, he does not perform any functions, other than those
mentioned above, which could be of any relevance for the Guarantor.
107
(c)
Stanisław Kluza - member of the Guarantor's Supervisory Board
Since July 2013, he has been member of the Guarantor's Supervisory Board. As part of his function
The place of Stanisław Kluza's work is the Warsaw School of Economics (Al. Niepodległości 162,
02-554 Warsaw, Poland), where he is an academic worker. Stanisław Kluza is also self-employed
under the name Stanisław Kluza.
Except for the Guarantor he does not perform any functions, other than those mentioned above,
(d)
Dorota Lange-Socha – member of the Guarantor's Supervisory Board
Since May 2014 she has been on the Guarantor's Supervisory Board. As part of her function at the
Guarantor she conducts activities provided for the Guarantor's Supervisory Board members by the
The place of Dorota Lange-Socha's work is FORTE s.c. (Wańkowicza 7/42, 02-796 Warsaw,
Poland), where she is a partner.
Except for her function at the Guarantor, Dorota Lange-Socha does not perform any functions, other
than those mentioned above, which could be of any relevance for the Guarantor.
(e)
Grzegorz Warzocha – member of the Guarantor's Supervisory Board
Since June 2015, he has been member of the Guarantor's Supervisory Board. As part of his function
The place of Grzegorz Warzocha's work is the Guarantor (ul. Emilii Plater 53, 00-113 Warsaw,
Poland) and the University of Economics in Wrocław (ul. Komandorska 118-120, 53-345 Wrocław,
Poland), where he is an assistant professor.
Except for the Guarantor he does not perform any functions, other than those mentioned above,
The Guarantor is not aware of any potential conflict of interest of persons representing the
Guarantor's Supervisory Board between any of their duties to the Guarantor and their private
interests. According to representations submitted by each member of the Guarantor's Supervisory
Board, with respect to any of these persons there is no conflict of interest or potential conflict of
interest between these persons' duties to the Guarantor and their private interests or other duties.
11.
Major Shareholders
As of the date of this Prospectus, to the best of the Guarantor's knowledge, the Guarantor's shareholders were
the following entities:
The Guarantor's key shareholders:
Name of entity
Number of shares
% in share capital
% in voting power
(in thousands)
Alternative Investment Partners Sp. z o. o.
31,465
50.93%
50.93%
Quercus Towarzystwo Funduszy Inwestycyjnych S.A.
4,161
6.74%
6.74%
BZ WBK Towarzystwo Funduszy Inwestycyjnych S.A.
3,156
5.11%
5.11%
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The Guarantor's key shareholders:
Name of entity
Number of shares
% in share capital
% in voting power
(in thousands)
Tomasz Czechowicz
Other
Total
1,429
2.31%
2.31%
21,568
34.91%
34.91%
61,779
100%
100%
There are no arrangements, known to the Guarantor, the operation of which may, at a subsequent date, result
in a change of control of the Guarantor. To the extent known to the Guarantor, there are no measures in place
to ensure that the control of the Guarantor is not abused.
The main shareholder of the Guarantor is Alternative Investment Partners Sp. z o.o., a subsidiary of Tomasz
12.
Financial Information Concerning the Guarantor's Assets and Liabilities, Financial Position
and Profits and Losses
12.1
The following financial information with the respective auditor's opinions is incorporated by reference to this
Prospectus (see chapter Information Incorporated by Reference):
Consolidated Financial Statements:
(a)
Audited consolidated financial statements of the Guarantor for the year ended 31 December 2014,
prepared in accordance with the IFRS;
(b)
Auditor's opinion in respect of the consolidated financial statements of the Guarantor for the year
ended 31 December 2014;
(c)
Audited consolidated financial statements of the Guarantor for the year ended 31 December 2013,
prepared in accordance with the IFRS; and
(d)
Auditor's opinion in respect of the consolidated financial statements of the Guarantor for the year
ended 31 December 2013.
Standalone Financial Statements:
(a)
Audited financial statements of the Guarantor for the year ended 31 December 2015, prepared in
accordance with the IFRS;
(b)
Auditor's opinion in respect of the financial statements of the Guarantor for the year ended 31
December 2015;
(c)
accordance with the IFRS;
(d)
December 2014;
(e)
accordance with the IFRS; and
(f)
December 2013.
109
12.2
Information about the basis for preparation of the financial statements of the Guarantor
The annual consolidated financial statements have been prepared in accordance with the laws binding in the
Republic of Poland and with International Financial Reporting Standards (IFRS), as well as the
interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) adopted by
the European Union.
The description of the restatements related to 2013 figures is presented in the Consolidated Financial
Statements for 2014, p. 11 through p. 18.
From the beginning of 2015 the Guarantor does not any longer prepare consolidated financial statements as
there are no subsidiaries that would be subject to consolidation and the Guarantor meets the definition of an
investment entity in accordance with IFRS 10:27. The Guarantor complies with all the four typical
characteristics of an investment entity as it (i) has more than one investment, (ii) has more than one investor,
(iii) has investors that are not related parties of the Guarantor and (iv) has ownership interests in the form of
equity or similar investments. According to IFRS 10:31, when an entity meets the definition of an
investment entity, it does not consolidate its subsidiaries and instead needs to measure an investment in a
subsidiary at fair value through profit or loss account.
As a result, the 2015 financial statements are not consolidated and are prepared as standalone financial
statements.
12.3
(a)
Consolidated statement of profit or loss and statement of other comprehensive income
For the year ended 31 December 2014 and the year ended 31 December 2013 in thousands of PLN:
Consolidated statement of profit or loss and statement of other comprehensive
income
Gross profit on sale
Profit on Investments
Profit on operating activities
Profit before taxation
Net profit for the reporting period
Earnings per share (in PLN)
- continuing operations
- discontinued operations
Diluted earnings per share (in PLN)
(b)
22,442
195,944
269,689
272,293
264,794
31.12.2013
(restated)
74,559
134,252
188,873
182,163
186,184
4.24
-
2.99
2.99
3.99
265,484
2.98
2.98
185,617
31.12.2014
Consolidated Statement of Financial Position
Consolidated statement of financial position
31.12.2014
Non-current assets
Current assets
Total assets
Equity
Non-current liabilities
Bank loans and borrowings
1,192,504
30,951
1,223,455
1,032,404
162,727
186
110
31.12.2013
(restated)
759,547
186,408
946,517
763,476
85,026
226
Consolidated statement of financial position
31.12.2014
Bonds
Current liabilities
Trade and other payables
Bonds
Current provisions
Bills of exchange
Total Liabilities
TOTAL LIABILITIES AND EQUITY
(c)
162,541
28,324
364
41
2,872
11,617
13,430
191,051
1,223,455
31.12.2013
(restated)
84,800
98,015
1,037
41
35,495
12,272
49,170
183,041
946,517
Consolidated Statement of Cash Flows
As at
31.12.2014
79,185
(123,735)
(7,369)
(51,919)
67,197
15,278
Consolidated statement of cash flows
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Net increase / (decrease) of cash and cash equivalents
Cash and cash equivalents opening balance
Change in the level of cash due to exchange differences
Cash and cash equivalents closing balance
(d)
As at
31.12.2013
26,451
10,017
11,602
47,522
19,673
2
67,197
Standalone Statement of profit or loss and statement of other comprehensive income
For the year ended 31 December 2015, the year ended 31 December 2014 and the year ended 31 December
2013 in thousands of PLN:
Statement of profit or loss and statement of other comprehensive
income
Gross profit on sale
Profit on Investments
Profit on operating activities
Profit before taxation
Net profit for the reporting period
Earnings per share (in PLN)
Diluted earnings per share (in PLN)
(e)
31.12.2015
31.12.2014
31.12.2013
0
133,116
129,453
119,721
121,463
0
359,658
350,545
359,758
352,281
0
134,252
122,896
114,520
118,668
1.94
-
5.63
-
1.90
-
1.84
121,463
5,30
352,281
1,90
118,668
Standalone Statement of Financial Position
Non-current assets
Current assets
31.12.2015
1,330,138
67,573
111
31.12.2014
1,192,504
30,951
31.12.2013
816,314
122,659
Total assets
Equity
Bonds
Current liabilities
Trade and other payables
Bonds
Current provisions
Bills of exchange
Total Liabilities
TOTAL LIABILITIES AND EQUITY
(f)
31.12.2015
1,397,711
1,154,617
137,388
148
137,240
105,706
599
41
93,316
11,750
243,094
1,397,711
31.12.2014
1,223,455
1,032,404
162,727
186
162,541
28,324
364
41
2,872
11,617
13,430
191,051
1,223,455
31.12.2013
938,973
755,045
85,026
226
84,800
98,902
305
1,812
35,495
12,120
49,170
183,928
938,973
Standalone Statement of Cash Flows
As at
31.12.2015
1,290
2,605
41,153
45,048
15,278
60,326
Statement of cash flows
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Net increase / (decrease) of cash and cash equivalents
Cash and cash equivalents opening balance
Change in the level of cash due to exchange differences
Cash and cash equivalents closing balance
12.4
As at
31.12.2014
25,082
(50,068)
(2,177))
(27,163)
42,441
15,278
As at
31.12.2013
52,419
(16)
(22,366)
30,037
12,402
2
42,441
The auditor's opinion to the Guarantor's capital group's consolidated financial statement for
the financial year ended 31 December 2013
According to the auditor's opinion to the Guarantor's capital group's consolidated financial statement for the
financial year ended 31 December 2013:
“Without qualifying our opinion as for the correctness and fairness of the audited consolidated financial
statements, we would like to draw attention to the fact that in the explanatory note no. 34 to consolidated
financial statements in section concerning the methods of consolidation, the Management of the Company
justified their decision why they excluded the entities, thereof shares are in the portfolio of closed-end
investment funds, from the consolidation under acquisition accounting method. The investment certificates
issued by these entities are owned by the Entities from Capital Group MCI Management S.A.”
12.5
The Guarantor is involved in certain legal proceedings that are incidental to the ordinary conduct of its
business. The Guarantor does not conduct any judicial, administrative or arbitration proceedings and has not
conducted such proceedings in the period of past 12 months, which, in the Guarantor's best opinion, could
have/had in the past 12 months material impact on the financial situation and/or profitability of the
Guarantor.
On 12 April 2011, the Court of Appeal in Wrocław, I Civil Division, in a suit brought by the Guarantor
against the State Treasury – the Head of the Treasury Control Office in Wrocław, validly adjudged
PLN28,904,888 plus statutory interest from 8 June 2006, until the date of payment from the State Treasury
112
to the Guarantor. The amount was adjudged as compensation for the damage incurred by the Guarantor
in connection with the loss of value of the shares held by the Guarantor in JTT Computer S.A. which was
brought to bankruptcy as a result of wrong decisions made by tax authorities in violation of the law. In this
way, the Court of Appeal, in principle, shared the Guarantor's position expressed in its statement of claim
and presented during the trial. On 23 May 2011, the judgment of the Court of Appeal was enforced in full by
the Treasury Control Office in Wrocław. The repayment of the principal amount due, statutory interest, and
the costs of proceedings totaled PLN46,555,217. The judgment passed in the second instance, in spite of the
fact that it is legally valid and has been enforced, is still subject to cassation appeal by the parties.
12.6
Significant Change in the Guarantor's Financial or Trading Position
There has been no significant change in the financial or trading position of the Guarantor between 31
December 2015 and the date of this Prospectus.
13.
13.1
Share Capital
The Guarantor's share capital is PLN61,779,619.00 and is divided into 61,779,619 equal and indivisible
shares with the nominal value of PLN1 each.
On 17 November 2015 Extraordinary General Meeting of the Guarantor adopted resolutions on (i)
redemption of 952,758 Guarantor's shares and (ii) decrease of the Guarantor's share capital from the amount
of PLN62,732,3770 to the amount PLN61,779,619 (i.e. by the amount of PLN952,758, corresponding to the
total nominal value of redeemed shares). On 2 December 2015, the abovementioned resolutions have been
registered by the registry court.
The Guarantor's share capital has been paid up in full. The Guarantor's shares are not preference shares.
On 17 November 2015, Extraordinary General Meeting of Guarantor adopted resolution on authorizing
Guarantor's Management Board to increase of the Guarantor's share capital under the authorised capital by
the amount not higher than PLN6,273,237. The increase of the Guarantor's share capital, referred to in the
previous sentence is to be realized by the issue of new bearer shares with the nominal value of PLN1.00 each
and total nominal value not higher than PLN6,273,237. Authorization of the Guarantor's Management Board
to increase of the Guarantor's share capital and issue new shares under the authorised capital expires within
two years from the day of registration of the authorised capital by the registry court, which was made on 2
December 2015.
Pursuant to the Guarantor's Articles of Association, the total nominal value of all conditional increases in the
Guarantor's share capital has been set at no more than PLN13,955,000, including:
(a)
the conditional increase in the Guarantor's share capital made pursuant to Resolution
no. 21/ZWZA/2008 of the Guarantor's General Meeting of 20 June 2008, as amended by Resolution
no. 04/NWZA/2009 of the Guarantor's General Meeting of 31 July 2009, the nominal value of which
was set not to be higher than PLN8,000,000; the conditional increase of the Guarantor's share capital
in this respect:

could be made through the issue of no more than 8,000,000 series J ordinary bearer shares
with the nominal value of PLN 1 each;

the series J shares could be subscribed for by the authorised bondholders who are holders
of convertible series B bonds issued pursuant to Resolution no. 03/NWZA/2008 of the
Guarantor's General Meeting of 27 March 2008, as amended by Resolution 03/NWZA/2009
of the Guarantor's General Meeting of 31 July 2009;
113

(b)
(c)
13.2
as of the Date of the Prospectus, all convertible series B bonds of the Guarantor were
redeemed (the maturity date was 10 September 2012) so the said conditional increase in the
Guarantor's share capital will not be made in future;
the conditional increase in the Guarantor's share capital made pursuant to Resolution no.
20/ZWZ/2012 of the Guarantor's General Meeting of 5 June 2012, the nominal value of which was
set not to be higher than PLN400,000; the conditional increase in the Guarantor's share capital in this
respect:

could be made through the issue of no more than 400,000 series I ordinary bearer shares
with the nominal value of PLN 1 each;

the series I shares will be subscribed for by the authorised holders of series A subscription
warrants issued pursuant to Resolution no. 19/ZWZ/2012 of the Guarantor's General
Meeting of 5 June 2012;
the conditional increase in the Guarantor's share capital made pursuant to Resolution no.4 of the
Guarantor's General Meeting of 17 September 2012, the nominal value of which was set not to be
higher than PLN5,555,000; the conditional increase in the Guarantor's share capital in this respect:
(i)
is made through the issue of no more than 5,555,000 series Z ordinary bearer shares with the
nominal value of PLN 1 each;
(ii)
the series Z shares will be subscribed for by the authorised bondholders who are holders
of series G1 convertible bonds, series G2 convertible bonds, series G3 convertible bonds,
series G4 convertible bonds, or series G5 convertible bonds issued pursuant to Resolution
no. 4 of the Guarantor's General Meeting of 17 September 2012.
Articles of Association:
On 17 November 2015, the Guarantor's
Extraordinary General Meeting adopted resolution
on amendments to the Guarantor's Articles of
Association and authorised the Guarantor's
Supervisory Board to establish the uniform wording
of the Guarantor's Articles of Association. As of the
date of this Prospectus, the uniform wording of the
Guarantor's Articles of Association, reflecting these
amendments, has not been determined. The last
uniform wording of the Guarantor's Articles
of Association was determined by the Guarantor's
Supervisory Board on 3 June 2015.
The objectives and purpose of the Guarantor are
regulated by the specification within the line
of business – it concerns Article 4 of the Articles
of Association:
1)
activities of holding companies;
2)
trusts, funds, and similar financial entities;
3)
lending;
4)
other financial service activities, except
insurance and pension funding not elsewhere
classified;
5)
other activities auxiliary to financial
services, except insurance and pension
114
6)
7)
8)
9)
funding;
activities of head offices and holding
companies, excluding financial holding
companies;
public
relations and communication
activities;
business and other management consultancy
activities; and
other professional, scientific, and technical
activities not elsewhere classified.
Foundation of the Guarantor:
The Guarantor was founded by a Deed of Foundation
executed on 16 July 1999.
Deed of foundation:
The Guarantor has been founded in compliance with
the laws of the Republic of Poland, mainly the Polish
Code of Commercial Partnerships and Companies
then effective. The Deed of Foundation is filed in the
District Court for capital city of Warsaw,
Commercial Division XII.
The Guarantor's line of business is specified
in Article 4 of the Articles of Association (see
above).
Line of business:
14.
Material Contracts
Agreements considered to be material are the agreements concluded by the Guarantor, the value of which
exceeded 10% of the Guarantor's equity as at 31 December 2014, i.e., PLN103,240,400, and those which,
in the Guarantor's opinion, due to their specific subject matter or character, may be relevant for the
Guarantor's business activity and financial standing.
On 23 December 2014, an agreement was signed by PEManagers, the Guarantor, and MCI TFI
(the Tripartite Agreement). The Tripartite Agreement came into force on 29 January 2016.
The subject matter of the Tripartite Agreement is to ensure the maintenance throughout the term of the
Tripartite Agreement the total exposure of the Guarantor and the Guarantor's subsidiaries (within the
meaning of the Public Offer Act; the Guarantor's Subsidiaries) in investment certificates of the investment
funds managed by MCI TFI, existing on the execution date of the Tripartite Agreement (the Funds).
Pursuant to the Tripartite Agreement, the Guarantor agreed that, for the term of the Tripartite Agreement, the
Guarantor or any of the Guarantor's Subsidiaries would not request disbursements by the Funds for
redemption of investment certificates or as disbursement of the revenue from the sale of the Funds' deposits,
or as disbursement of the income earned by the Funds, except for the cases set out in the Tripartite
Agreement, i.e.:
(a)
ability to request disbursements by the Funds for redemption of investment certificates,
disbursement of revenue from the sale of the Funds' deposits or disbursement of income earned by
the Funds up to no more than 20% of the total value of investment certificates taken up and paid up
by the Guarantor and the Guarantor's Subsidiaries (calculated at the end of each calendar quarter
according to the latest available valuation of the Fund's assets prepared by this Fund in accordance
with the provisions of its articles of association the Disbursement Limit). After the Guarantor or the
Guarantor's Subsidiaries receive from the Fund the disbursements accounting for 20% of the total
value of investment certificates taken up and paid up by the Guarantor and the Guarantor's
Subsidiaries, calculated according to the above mentioned rules (the Executed Disbursement
Limit), the Guarantor or the Guarantor's Subsidiaries shall be entitled to file subsequent requests for
115
disbursement up to the Disbursement Limit, provided that, before the date of filing such subsequent
disbursement request (including the first such request), the Guarantor or the Guarantor's Subsidiaries
make payments to any Fund (or any Funds) for taking up the investment certificates of such Fund (or
Funds) in an amount corresponding to the value of the Executed Disbursement Limit;
(b)
ability to reallocate funds between the Funds, assuming that the funds from disbursements under
reallocation (disbursements by the Funds for redemption of investment certificates, disbursement of
revenue from the sale of the Funds' deposits, or disbursement of income earned by the Funds) shall
be allocated in the Funds' investment certificates, covered by the management fee (charged by MCI
TFI on the net asset value attributable to these investment certificates) not lower than with respect to
the investment certificates of the Fund, from which disbursement under reallocation is made,
provided that from 1 May 2015 reallocation requests regarding disbursements of no more than 40%
of the total value of the Funds' investment certificates held and paid up by the Guarantor and the
Guarantor's Subsidiaries may contain the Guarantor's or the Guarantor's Subsidiaries' undertaking to
take up investment certificates for which the management fee charged by MCI TFI on the net asset
value attributable to these investment certificates is lower than the management fee charged by MCI
TFI on the net asset value attributable to the investment certificates of the Fund, from which
reallocation disbursement is made.
The Funds' obligation of no disbursement, as mentioned above, shall not apply to the specific cases
enumerated in the Tripartite Agreement, in particular those relating to the servicing of the current liabilities
of the Guarantor or Guarantor's Subsidiaries, such as:
(a)
the obligation of the Guarantor or any of the Guarantor's Subsidiaries to redeem bonds issued by the
Guarantor or the Guarantor's Subsidiaries (including premature redemption) before the execution
date of the Tripartite Agreement or to repay a facility or loan (including early repayment) or to
redeem debt securities other than bonds (including early redemption) (repayment) – up to the value
constituting the amount which the Guarantor or the Guarantor's Subsidiaries are obliged to pay under
the above legal titles;
(b)
the obligation of the Guarantor or any of the Guarantor's Subsidiaries to redeem bonds issued by the
Guarantor or the Guarantor's Subsidiaries (including early redemption) after the execution date of
the Tripartite Agreement or to repay a facility or loan (including early repayment) or to redeem debt
securities other than bonds (including early redemption) (repayment) up to the value constituting the
amount which the Guarantor or the Guarantor's Subsidiaries are obliged to pay under the above legal
titles with reference to these bonds, facilities, loans, or other debt instruments whose funds were
invested by the Guarantor (or the Guarantor's Subsidiaries) in the Funds or companies whose shares
constitute assets of any Fund;
(c)
the obligation of the Guarantor or any of the Guarantor's Subsidiaries to pay liabilities contracted by
the Guarantor or the Guarantor's Subsidiaries (including conditional liabilities) –up to the amount of
PLN50,000,000 throughout the term of the Tripartite Agreement;
(d)
the obligation of the Guarantor or any of the Guarantor's Subsidiaries to pay, under a surety or
guarantee (or other forms of liability for third party liabilities) granted by the Guarantor or the
Guarantor's Subsidiaries, to secure the payment of liabilities of PEManagers, any Fund or company
whose shares constitute assets of any Fund
(i)
up to the value of monies, which the Guarantor or the Guarantor's Subsidiaries are required
to pay;
(ii)
in each calendar year, for the purposes of covering the Guarantor's operating costs up to the
amount of PLN5,000,000 for a given calendar year;
116
(iii)
in each calendar year, for the purposes of dividend payment by the Guarantor or any of the
Guarantor's Subsidiaries – up to the amount corresponding to the value of 5% of the
Guarantor's Group's equity (determined as at the date of filing the payment request) per
annum;
where the value of such payments is determined according to the latest available valuation of assets
of the Fund (or the Funds), preceding the filing of payment request, made (pursuant to the provisions
of the Fund's Articles of Association) by the Fund (or the Funds) which such request refers to;
The subject matter of the Tripartite Agreement is further to ensure that the management of the Funds'
investment portfolio for the term of the Tripartite Agreement is solely divided among PEManagers, MCI
AM sp. j. or other PEManagers' subsidiaries within the meaning of the Public Offer Act; the PEManagers'
subsidiaries.
Pursuant to the Tripartite Agreement, MCI TFI guaranteed that, for the term of the Tripartite Agreement,
PEManagers, MCI Sp. j. or other PEManagers' subsidiaries would not be replaced by any other entities as
managers of the Funds' investment portfolios, except for the situations, where the Tripartite Agreement
would be earlier effectively terminated by the Guarantor or MCI TFI for important reasons described in
detail in the Tripartite Agreement. The above undertaking will also apply if the management of any of the
Funds is taken over by another investment fund company based on the agreement, referred to in Article 238,
section 1, of Act on Investment Funds.
Moreover, the subject matter of the Tripartite Agreement includes obligation of the Guarantor that,
throughout the term of the Tripartite Agreement, the Guarantor and the Guarantor's Subsidiaries will vote, as
participant/participants in the investors meeting or member/members of the investors' board of each of the
above mentioned investment funds (provided this is within the powers of, respectively, the investors meeting
or the investors' board of a given Fund) against:
(a)
amendments of these Funds' Articles of Association resulting in the decrease of the MCI TFI fee for
the management of the MCI.PrivateVentures FIZ and MCI.CreditVentures 2.0 FIZ portfolios,
charged by MCI TFI on the net asset value of these Funds (the Fee) in a manner preventing the
charging of the amount of Fee set out in the Tripartite Agreement; and
(b)
mergers, transformations or liquidations of the above mentioned Funds, and amendments of these
Funds' articles of association resulting in the takeover of the management of these Funds by another
investment fund company, except for such merger, transformation, liquidation or amendments of the
Articles of Association which do not result in the decrease of the amount of Fee in a manner
preventing the charging of the amount of Fee set out in the Tripartite Agreement or replacement of
PEManagers, MCI Sp. j. or other PEManagers' subsidiaries by another entity as the manager of the
Funds' investment portfolios.
The Tripartite Agreement sets out in detail the Fee calculating method.
The amount of fixed fee for the management of investment funds, according to the Tripartite Agreement,
will be determined at least at the following levels:

for Sub-fund MCI.EuroVentures 1.0.: 2% of the sub-fund's annual net asset value;

for Sub-fund MCI.TechVentures 1.0.: 2.75% of the sub-fund's annual net asset value; and

for the MCI.CreditVentures 2.0. FIZ fund: 1% of the fund's annual net asset value.
The amount of variable fee for the management of investment funds, according to the Tripartite Agreement,
depends on the increase of the net asset value of the sub-fund or, respectively, the investment fund, taking
into account the executed payments of income and revenue;
117
The subject matter of the Tripartite Agreement is also to obligate the contract parties to start negotiations
after 31 October 2018, in good faith, and to lead to determining the new rules of calculating the fee for the
management of MCI.PrivateVentures Fundusz Inwestycyjny Zamknięty and MCI.CreditVentures 2.0
Fundusz Inwestycyjny Zamknięty and to guarantee the right for the Guarantor or an entity designated by the
Guarantor to take up to 50% of first issue investment certificates issued by each investment fund to be
established by MCI TFI after the effective date of the Tripartite Agreement.
The Tripartite Agreement sets out detailed procedures of the performance of these warranties.
The Tripartite Agreement will be in force until 31 October 2023 (inclusive). The Tripartite Agreement may
not be terminated by any of the parties, except for important reasons referred to below:
(a)
If PEManagers, MCI AM sp. j. or another PEManagers' subsidiary managing the Fund's investment
portfolio: (i) loses the required permit to perform activity involving the management of investment
portfolios of investment funds; or (ii) ceases to meet the requirements stipulated in the provisions
of law with respect to the management of the Funds' investment portfolios; or (iii) if the PFSA
decides about the necessity to terminate (e.g., withdraw from) the agreement concluded by MCI TFI,
which is a governing body of the given Fund whose investment portfolio is managed
by PEManagers, MCI AM sp. j. or another PEManagers' subsidiary; or (iv) if the PFSA orders MCI
TFI, or PEManagers, or MCI AM sp. j., or another PEManagers' subsidiary managing the Fund's
investment portfolio, due to the infringements stated by the PFSA, to cease specific activities, which
will result in the obligation to terminate the agreement on the management of the Fund's investment
portfolio entered into by MCI TFI and any of the above entities; or (v) (with respect to the
possibility of terminating the Management Contract by TFI) the condition set out in Article 45a,
section 4, item 4) of the Act on Investment Funds occurs, then:
(i)
the Guarantor or MCI TFI may, after the lapse of the Turnaround Period, referred to in subitem ii first indent, terminate the Tripartite Agreement upon a six-month notice, and in such
a case the obligation to pay the contractual penalty, referred to below, does not occur;
(ii)
MCI TFI may terminate the Management Contract (i.e. the contract for the management
of the investment portfolio of any Fund entered into with PEManagers, PEManagers'
subsidiary or another member of the PEManagers capital group, the Management
Contract) upon a six-month notice, subject to Article 45a, section 4, item 4) of the Act
on Investment Funds; in such a case, the obligation to pay the contractual penalty, referred
to below, does not occur, provided that for a period of 12 months from the termination date
of the Management Contract (the Turnaround Period), MCI TFI does not assign the
management of the investment portfolio of any Fund to any entity other than entity
designated by PEManagers, as long as, before the lapse of the Turnaround Period,
PEManagers designates to MCI TFI such an entity (a PEM's subsidiary), which, as at such
designation date:
(A)
meets all the legal requirements necessary for the management of investment
portfolios of all the Funds; and
(B)
agrees to enter into an agreement for the management of investment portfolios of all
the Funds on the terms stipulated in the Management Contract as at the termination
date thereof;
(C)
if, in the Turnaround Period, PEManagers does not designate any entity complying
with the conditions, referred to in the first indent above, MCI TFI will be entitled to
entrust the management of investment portfolio of any Fund to any entity.
118
Additionally, TFI agreed to promptly inform PEM in writing, otherwise such information being null
and void, about each termination of the Management Contract entered into with any entity other than
PEM, not later than within two days from such event.
(b)
Irrespective of letter (a), the Guarantor will be entitled to terminate the Tripartite Agreement upon a
six-month notice, and in such a case no obligation will occur to pay the penalties referred to below,
if, in the period when the Guarantor or the Guarantor's Subsidiaries holds (hold) at least 10% of
PEManagers shares (accounting for 10% of the share capital and giving at least 10% of voting rights
at PEManagers' General Meeting) and the net asset value of the investment funds managed by MCI
TFI, attributable to the investment certificates held by the Guarantor or the Guarantor's Subsidiaries,
accounts for not less than 50% of the net asset value of all investment funds managed by MCI TFI:
(i)
(ii)
(c)
the following occurs:
(A)
the person designated by the Guarantor is dismissed or suspended by the authorised
body of PEManagers as the Management Board member responsible for financial
matters, if such dismissal or suspension takes place without the written consent of
the Guarantor; or
(B)
body of MCI TFI as the MCI TFI Management Board member responsible for
financial matters, if such dismissal or suspension takes place without the written
consent of the Guarantor; or
(C)
body of PEManagers' Subsidiary managing the Fund's investment portfolio as the
Management Board member of such entity responsible for financial matters, if such
dismissal or suspension takes place without the written consent of the Guarantor; or
unless:
(A)
the person designated by the Guarantor is appointed the Management Board
member responsible for financial matters – within 30 days from the date of the
Guarantor's delivery to PEManagers of a statement designating a particular person
for the position of the Management Board member responsible for financial matters;
or
(B)
the person designated by the Guarantor is appointed the MCI TFI Management
Board member responsible for financial matters – within 30 days from the date
of the Guarantor's delivery to MCI TFI of a statement designating a particular
person for the position of the Management Board member responsible for financial
matters; or
(C)
the person designated by the Guarantor is appointed the Management Board
member responsible for financial matters at PEManagers Subsidiary managing the
Fund's investment portfolio – within 30 days from the date of the Guarantor's
delivery to PEManagers' Subsidiary managing the Fund's investment portfolio of a
statement designating a particular person for the position of the Management Board
member responsible for financial matters at PEManagers Subsidiary managing the
Fund's investment portfolio.
The Parties to the Tripartite Agreement agreed that:
(i)
a notice given by any of the parties to the Tripartite Agreement before 1 November 2023, on
the termination of the Tripartite Agreement or withdrawal from the Tripartite Agreement (or
119
a notice of its termination in any other way) for any reasons other than those specified in
letter a or b (or with reference to the reasons specified in letter a or b in spite of the absence
of such reasons) would not produce legal effects in the form of termination of the Tripartite
Agreement or extinguishment of the legal relationship arising from the Tripartite
Agreement;
(ii)
a notice given by MCI TFI before 1 November 2023, to PEManagers, PEManagers'
Subsidiary or another entity from the PEManagers capital group (within the meaning of the
Public Offer Act) managing the investment portfolio of any Fund under the Management
Contract, on the termination of or withdrawal from the Management Contract (or a notice
of the termination of the Management Contract in any other way) for any reasons other than
those specified in letter a (or with reference to the reasons specified in letter a in spite of the
absence of such reasons), would not produce legal effects in the form of termination of the
Management Contract or extinguishment of the legal relationship arising from the
Management Contract.
(d)
Each of the parties agreed not to give any other party a notice of termination of the Tripartite
Agreement or withdrawal from the Tripartite Agreement (or a notice of its termination in any other
way) for any reasons other than those specified in letter a or b (or with reference to the reasons
specified in letter a or b in spite of the absence of such reasons), before 1 November 2023.
(e)
MCI TFI agreed not to give, before 1 November 2023, PEManagers, a PEManagers' Subsidiary
or another member of the PEManagers capital group (within the meaning of the Public Offer Act)
managing the investment portfolio of any Fund under the Management Contract, a termination
notice or notice of withdrawal of the Management Contract (or a notice of the termination of the
Management Contract in any other way) for any reasons other than those specified in letter a (or
with reference to the reasons specified in letter a in spite of the absence of such reasons).
(f)
As at the execution date of the Tripartite Agreement, the parties to the Tripartite Agreement made a
declaration regarding the extension of the term of the Tripartite Agreement for another 10 years after
the lapse of the period for which it was concluded, and the parties to the Tripartite Agreement
confirmed that the above declaration did not constitute an obligation of any party to the Tripartite
Agreement to extend the term of the Tripartite Agreement for another 10 years after the lapse of the
period for which it was concluded.
The Tripartite Agreement contains provisions under which the Guarantor's obligation to pay contractual
penalties may arise.
If the Guarantor breaches any of the obligations, referred to in letters (d) – (e) above, the Guarantor will pay
PEManagers the contractual penalty in the amount set forth in sub-item ii first indent or sub-item ii second
indent below (depending on when such breach of the Guarantor's obligations occurs).
If the Guarantor or the Guarantor's Subsidiaries breach the Guarantor's obligations set forth in the Tripartite
Agreement, relating to the maintenance, throughout the term of the Tripartite Agreement, of the total
exposure of the Guarantor and the Guarantor's Subsidiaries in such a way that the Guarantor or the
Guarantor's Subsidiaries receive from the Fund (or the Funds) cash disbursements under the submitted
requests, in breach of the provisions of the Tripartite Agreement, for the redemption of investment
certificates or disbursement of revenue earned by the Funds, the following procedure will apply:
(a)
PEManagers will be entitled to call on the Guarantor to remove the breach within the period set forth
by PEManagers, not shorter than two months, by way of making payments to the Funds (for the
taking up of investment certificates) in the amount ensuring compliance with the obligations set out
in the Tripartite Agreement relating to the maintenance, throughout the term of the Tripartite
Agreement, of the total exposure of the Guarantor and the Guarantor's Subsidiaries;
120
(b)
(c)
if, in spite of the Guarantor's receipt of the PEManagers call to remove the breach pursuant to the
provisions of sub-item (a) above, the Guarantor or the Guarantor's Subsidiaries do not make, within
the period set out by PEManagers, not shorter than two months, payments to the Funds (for the
taking up of investment certificates) in the amount ensuring compliance with the obligations set out
in the Tripartite Agreement relating to the maintenance, throughout the term of the Tripartite
Agreement, of the total exposure of the Guarantor and the Guarantor's Subsidiaries, the Guarantor
will pay PEManagers a contractual penalty equal to:

PLN100,000,000, if the Guarantor or the Guarantor's Subsidiaries breach the Guarantor's
obligations before 1 November 2018; or

PLN50,000,000, if the Guarantor or the Guarantor's Subsidiaries breach the Guarantor's
obligations after 31 October 2018;
a condition for the payment of the contractual penalty is the ineffective lapse of the period for the
removal of the breach referred to in sub-item (a) set out by PEManagers, i.e., a failure to make
payments to the Funds within the period set out by PEManagers, not shorter than two months (for
the taking up of investment certificates) in the amount ensuring compliance with the obligations set
out in the Tripartite Agreement relating to the maintenance, throughout the term of the Tripartite
Agreement, of the total exposure of the Guarantor and the Guarantor's Subsidiaries.
If, in spite of the Guarantor's or the Guarantor's Subsidiary's compliance with the procedure and time limits
set forth in the Tripartite Agreement for making payments to the Funds, investment certificates of the Fund
or the Funds are not effectively taken up by the Guarantor and the Guarantor's Subsidiaries (for the value
resulting from the obligations set forth in the Tripartite Agreement) for reasons independent from the
Guarantor and the Guarantor's Subsidiaries within the time limit stipulated in the Tripartite Agreement, the
effects of the failure to take up investment certificates of the Fund or the Funds (including those consisting
of the breach of rules regarding the maintenance of the Guarantor's or the Guarantor's Subsidiaries' exposure
in the Funds) will not burden the Guarantor, i.e., the Guarantor will not be liable for the breach of the
provisions of the Tripartite Agreement regulating the obligations regarding the maintenance, for the term of
the Tripartite Agreement, of the Guarantor's and the Guarantor's Subsidiaries' total exposure, and will not be
required to pay a contractual penalty for the breach of these obligations.
If MCI TFI breaches the obligations set forth in the Tripartite Agreement, MCI TFI may be required to pay a
contractual penalty to PEManagers in the amount specified in sub-item (b) below.
If MCI TFI breaches its obligations set out in the Tripartite Agreement not to replace the entity managing the
Funds or with respect to the Fee, the following procedure will apply:
(a)
PEManagers will be entitled to call on MCI TFI to remove the breach within the period set forth by
PEM, not shorter than two months;
(b)
if, in spite of MCI TFI's receipt of PEManagers' call to remove the breach, pursuant to the provisions
of item (a) above, MCI TFI does not remove the breach, referred to in the call received from
PEManagers (such a situation is defined as the "TFI Breach"), MCI TFI will pay a contractual
penalty to PEManagers in the amount equal to the amount constituting the product of the value of
PEManagers' Monthly Profit (as defined below) and the number of months from the end of the
month in which the TFI Breach took place until the end of the term of the Tripartite Agreement;
(a condition for the contractual penalty payment is an ineffective lapse of the time limit set forth by
PEManagers for the removal of the breach, referred to in sub-item (a)), where:
(i)
PEManagers' Monthly Profit, for the purpose of determining the amount of the contractual
penalty, referred to above, is the profit earned by PEManagers in the month in which the TFI
121
Breach took place in connection with the management of the Fund or the Funds, which the
TFI Breach refers to, by PEManagers (or a member of PEManagers' group);
(ii)
the profit earned by PEManagers in the month in which the TFI Breach took place in
connection with the management of the Fund or Funds, which the TFI Breach relates to, by
PEManagers (or an entity from PEManagers' group) is calculated as a difference between
the amount of revenue achieved by PEManagers in the month specified above, in connection
with the management of the Fund or the Funds, which the TFI Breach relates to, by
PEManagers (or an entity from PEManagers' group) and the total amount of direct costs and
the amount of reasonable indirect costs (allocated in line with the rules applied to the
preparation of PEManagers' annual financial statements), connected with the management of
the Fund or Funds, which the TFI Breach refers to.
The contractual penalties stipulated in the Tripartite Agreement do not exclude the possibility of the party
entitled to receive the contractual penalty to seek damages in the amount exceeding the received contractual
penalty – if the non-performance or improper performance of the obligations entitling a party to request the
payment of the contractual penalty occurs before 1 November 2018. If the non-performance or improper
performance of the obligations entitling a party to request the payment of the contractual penalty occurs after
31 October 2018, the parties have excluded the possibility for the party entitled to receive the contractual
penalty to seek damages in the amount exceeding the received contractual penalty.
The Tripartite Agreement has been considered material due to its subject matter.
14.1
The Guarantor's bond issues
The Guarantor's bond issues have been considered material due to their total value.
As of the date of this Prospectus, the current Guarantor's liabilities under the issued bonds are PLN231
million (rounding; based on the nominal value of the Guarantor's existing bonds).
As of the date of this Prospectus all bonds issued by the Guarantor are listed on the Catalyst Alternative
Trading System, as shown in the table below.
Bond
series
Number of bonds listed on the
Alternative Trading System
Listing market
First
trading
day
Total face
value of bonds
issue (in
000'PLN)
Maturity
date
H1
36,000 series H1 bearer bonds
coded ISIN: PLMCIMG00145
BondSpot S.A.
Alternative
Trading System
26 April
2013
36,000
11 April
2016
H2
18,800 series H2 bearer bonds BondSpot S.A.
Alternative
Trading System
26 July
2013
18,800
28 June
2016
H3
30,000 series H3 bearer bonds
GPW S.A.
Alternative
Trading System
26 March
2014
30,000
19
December
2016
G1
50,000 series G1 bearer bonds
coded convertible into series Z
shares,
coded
ISIN:
PLMCIMG00178
BondSpot S.A.
Alternative
Trading System
25 April
2014
50,000
21 March
2018
122
Bond
series
Number of bonds listed on the
Alternative Trading System
Listing market
First
trading
day
Total face
value of bonds
issue (in
000'PLN)
Maturity
date
I1
31,000 series I2 bearer bonds
15
December
2014
31,000
17 October
2017
J
66,000 series J bearer bonds
BondSpot S.A.
Alternative
Trading System
GPW S.A.
Alternative
Trading System
BondSpot S.A.
Alternative
Trading System
GPW S.A.
Alternative
Trading System
29
February
2016
66,000
11
December
2018
Source: the Guarantor; own study
The series G1 bearer bonds are bonds convertible into the Guarantor's shares (c.a. less than 1% of total
Guarantor's share capital). The future conversion of series G1 bearer bonds into Guarantor's shares should
not cause the change of control over the Guarantor.
(a)
The issue of series H1 bonds
Pursuant to Resolution no. 1 of 20 December 2012, the Guarantor's Management Board adopted the issue
program of no more than 50,000 bonds:
-
with the nominal value of PLN1,000 each and the total nominal value of no more than
PLN50,000,000,
-
with the issue date not later than 31 December 2013 (inclusive) and maturity of no more than 60
months, counting from the bond issue date,
-
in a book-entry form,
-
without a specified goal of issue,
-
offered in a private placement and registered with the depository of securities kept by the KDPW,
-
to be subject to application for being listed on the Catalyst Alternative Trading System organized by
the GPW or BondSpot S.A.,
-
constituting bearer securities, and
-
secured by the registered pledges over investment certificates connected with Sub-fund
MCI.EuroVentures 1.0. and Sub-fund MCI.TechVentures 1.0.
On 21 March 2013, the Guarantor's Management Board adopted Resolution no. 1 regarding the
determination of the terms and conditions of the issue of secured series H1 ordinary bearer bonds. The issue
of the Guarantor's series H1 bonds was to be to the maximum amount of PLN50,000,000 under the
abovementioned Guarantor's bond issue program up to the maximum amount of PLN50,000,000. The
Guarantor's series H1 bonds were to be deposited with the securities depository kept by the KDPW and listed
on the Catalyst Alternative Trading System.
123
On 8 April 2013, 36,000 of the Guarantor's series H1 bonds were issued with the nominal value of PLN1,000
each and the total nominal value of PLN36,000,000. The issue price of the Guarantor's series H1 bonds was
equal to the nominal value of the Guarantor's series H1 bonds. The Guarantor's series H1 bonds were secured
by a registered pledge over MCI Fund Management Spółka z ograniczoną odpowiedzialnością
MCI.PrivateVentures S.K.A.'s 4,749 investment certificates connected with Sub-fund MCI.EuroVentures
1.0. and 355,052 investment certificates connected with Sub-fund MCI.TechVentures 1.0., pursuant to the
registered pledge agreements of 2 January 2013, up to the highest security amount of PLN150,000,000.
The interest rate on the Guarantor's series H1 bonds was based on the WIBOR 6M rate increased by a fixed
annual margin of 4.50 per cent p.a.
The Guarantor's series H1 bonds may be subject to early redemption at the request of the bondholders, on the
terms set forth in the terms and conditions of the Guarantor's series H1 bond issue.
The redemption date for the Guarantor's series H1 bonds was determined for 11 April 2016. The goal of the
issue of the Guarantor's series H1 bonds was not defined.
(b)
The issue of the Guarantor's series H2 bonds
The Resolution no. 1 of the Guarantor's Management Board of 20 December 2012 described in letter (a)
above was later amended by the Resolution no. 1 of the Guarantor's Management Board of 27 May 2013, on
the basis of which the issue program was given a new wording, according to which the issue program was
set to be of 66,000 bonds:
-
PLN66,000,000,
-
-
-
-
-
the BondSpot S.A.,
-
constituting secured bearer securities, and
-
secured by the registered pledges were to be established over investment certificates.
On 12 June 2013, the Guarantor's Management Board adopted Resolution no. 1 regarding the issue of
secured series H2 ordinary bearer bonds. The issue of the Guarantor's series H2 bonds was to amount to the
maximum of PLN30,000,000 under the abovementioned Guarantor's bond issue program to the maximum
amount of PLN66,000,000. The Guarantor's series H2 bonds were to be deposited with the depository of
securities kept by the KDPW and listed on the Catalyst Alternative Trading System.
On 28 June 2014, 18,800 of the Guarantor's series H2 bonds with the nominal value of PLN1,000 each were
issued, for the total nominal value of PLN18,800,000. The issue price of the Guarantor's series H2 bonds was
equal to the nominal value of the Guarantor's series H2 bonds. The Guarantor's series H2 bonds were secured
by a registered pledge over MCI Fund Management Spółka z ograniczoną odpowiedzialnością
MCI.PrivateVentures S.K.A.'s 2,615 investment certificates connected with Sub-fund MCI.EuroVentures
124
1.0. and 208,255 investment certificates connected with Sub-fund MCI.TechVentures 1.0., pursuant to the
registered pledge agreements of 2 January 2013, up to the highest security amount of PLN90,000,000.
The interest rate on the Guarantor's series H2 bonds was based on the WIBOR 6M rate increased by a fixed
annual margin of 4.50 pp.
The Guarantor's series H2 bonds may be subject to early redemption at the request of the bondholders, on the
terms set forth in the terms and conditions of the Guarantor's series H2 bond issue.
The redemption date for the Guarantor's series H2 bonds was determined for 28 June 2016. The goal of the
issue of the Guarantor's series H2 bonds was not defined.
(c)
The issue of secured series H3 ordinary bearer bonds
Pursuant to Resolution no. 1 of 9 October 2013, later amended by Resolutions of 25 November 2013, and 3
December 2013, of the Guarantor's Management Board adopted the issue program of no more than 30,000
bonds:
-
PLN30,000.000,
-
-
-
-
-
the GPW,
-
constituting bearer securities, and
-
secured by the registered pledges to be established over investment certificates held by the Guarantor
or companies related to the Guarantor, up to the maximum security amount equal to 300% of the
nominal value of bonds issued under the above mentioned issue program.
On 3 December 2013, the Guarantor's Management Board adopted Resolution no. 2 regarding the issue of
series H3 bonds, pursuant to which the Guarantor, under the abovementioned program of the Guarantor's
bond issue, was to issue not more than 30,000 series H3 bearer bonds with the nominal value of PLN1,000
each and the total nominal value of PLN30,000,000. The Guarantor's series H3 bonds were to be issued for
the period of 36 months, counting from the issue date, in a book-entry form, be secured, offered in a private
placement, deposited with the depository of securities kept by the KDPW, and be subject to application for
being listed on the Catalyst Alternative Trading System organized by the GPW.
On 19 December 2013, 30,000 of the Guarantor's series H3 ordinary bearer bonds were issued with the
nominal value of PLN1,000 each and the total nominal value of PLN30,000,000. The issue price of the
Guarantor's series H3 bonds was equal to the nominal value of the Guarantor's series H3 bonds. The
Guarantor's series H3 bonds were secured by a registered pledge over MCI Fund Management Spółka z
ograniczoną odpowiedzialnością MCI.PrivateVentures S.K.A.'s 1,590 investment certificates connected with
Sub-fund MCI.EuroVentures 1.0. and 199,868 investment certificates connected with Sub-fund
MCI.TechVentures 1.0., pursuant to the registered pledge agreement of 29 October 2013, to the highest
security amount of PLN90,000,027.03.
125
The interest rate on the Guarantor's series H3 bonds was based on the WIBOR 6M rate increased by an
The Guarantor's series H3 bonds may be subject to early redemption at the request of the bondholders or the
Guarantor, on the terms set forth in the terms and conditions of the Guarantor's series H3 bond issue.
The redemption date for the Guarantor's series H3 bonds was determined for 19 December 2016. The goal of
the issue of the Guarantor's series H3 bonds was not defined.
The Guarantor's series H3 bonds were introduced to trading on the Catalyst Alternative Trading System,
organized by the GPW. On 26 March 2014, their first listing on that organized market took place.
(d)
The issue of the Guarantor's series G1 bonds
On 17 September 2012, the Guarantor's General Meeting adopted Resolution no. 03/NWZ/2012 regarding
the issue of series G1 to G5 convertible bonds, a conditional increase in the Guarantor's share capital, and
exclusion of the current shareholders' pre-emptive right: series G1, G2, G3, G4, and G5 convertible bonds
and the Guarantor's series Z shares to be issued under the conditional increase in the Guarantor's share
capital. That Resolution was later amended by Resolution no. 03/NWZ/2013 of 17 December 2013. Pursuant
to the abovementioned Resolution, the Guarantor's General Meeting adopted the issue program of no more
than 50,000 bonds:
-
with the nominal value of PLN1,000 each and the total nominal value of PLN50,000,000,
-
convertible to no more than 5,555,000 of the Guarantor's series Z ordinary bearer shares, and
-
with the issue date not later than 31 December 2015.
On 12 March 2014, the Guarantor's Management Board adopted Resolution no. 1 regarding the issue of
series G1 bonds, pursuant to which the Guarantor, under the Guarantor's existing bond issue program, was to
issue no more than 50,000 series G1 bearer bonds with the nominal value of PLN1,000 each and the total
nominal value of no more than PLN50,000.
On 21 March 2014, 50,000 of the Guarantor's series G1 bonds were issued with the nominal value of
PLN1,000 each and the total nominal value of PLN50,000,000. The issue price of the Guarantor's series G1
bonds was equal to the nominal value of the Guarantor's series G1 bonds. The Guarantor's series G1 bonds
were not secured.
The interest rate on the Guarantor's series G1 bonds was based on the WIBOR 6M rate increased by the
fixed annual margin of 3.90 pp.
The Guarantor's series G1 bonds may be subject to early redemption at the bondholders' request, on the
terms set out in the terms and conditions of the Guarantor's series G1 bond issue.
The Guarantor's series G1 bonds may be converted to the Guarantor's series Z shares (issued under the
conditional increase in the Guarantor's share capital) on the terms set out in the terms and conditions of the
Guarantor's series G1 bond issue. The price of conversion of the Guarantor's series G1 bonds to the
Guarantor's series Z shares is, in principle, PLN12.00, but in special cases this price may be changed. The
conversion takes place at the request of the bondholder.
The Bond redemption date was determined for 21 March 2018. The goal of the issue of Bonds was not
defined.
(e)
The issue of secured series I1 ordinary bearer bonds
126
Pursuant to Resolution no. 1 of 7 March 2014, the Guarantor's Management Board adopted the issue
program of no more than 100,000 series I bonds:
-
PLN100,000,000,
-
-
-
-
-
-
-
secured by the registered pledges were to be established over investment certificates held by the
Guarantor or companies related to the Guarantor.
On 17 October 2014, 31,000 of the Guarantor's series I1 bonds were issued with the nominal value of
PLN1,000 each and the total nominal value of PLN31,000,000. The issue price of the Guarantor's series I1
bonds was equal to the nominal value of the Guarantor's series I1 bonds. The Guarantor's series I1 bonds
were secured by a registered pledge over MCI Fund Management Spółka z ograniczoną odpowiedzialnością
spółka jawna's 2,990 investment certificates connected with Sub-fund MCI.EuroVentures 1.0. and 322,549
investment certificates connected with Sub-fund MCI.TechVentures 1.0., pursuant to the registered pledge
agreements of 7 March 2014.
The interest rate on the Guarantor's series I1 bonds was based on the WIBOR 6M rate increased by the fixed
The Guarantor's series I1 bonds may be subject to early redemption at the bondholders' request, on the terms
set out in the terms and conditions of the Guarantor's series I1 bond issue.
The redemption date of the Guarantor's series I1 bonds was determined for 17 October 2017. The goal of the
issue of the Guarantor's series I1 bonds was not defined.
The Guarantor's series I1 bonds were introduced to trading on the Catalyst Alternative Trading System
organized by the GPW. On 15 December 2014, their first listing on the organized market took place.
(f)
The issue of the Guarantor's series J bearer bonds
Pursuant to the Resolution no. 1 of 4 December 2015, the Guarantor's Management Board adopted the issue
program of no more than 200,000 series J bonds:
-
PLN200,000,000,
-
with the issue date on 11 December 2015 and maturity date on 11 December 2018,
-
-
127
-
-
-
-
secured by the registered pledges were to be established over investment certificates held by the
Guarantor or companies related to the Guarantor.
On 11 December 2015, 66,000 of the Guarantor's series J bonds were issued with the nominal value of
PLN1,000 each and the total nominal value of PLN66,000,000. The issue price of the Guarantor's series J
bonds was equal to the nominal value of the Guarantor's series J bonds. The Guarantor's series J bonds were
secured by a registered pledge over MCI Fund Management Spółka z ograniczoną odpowiedzialnością's
6,086 investment certificates connected with Sub-fund MCI.EuroVentures 1.0. and 643,951 investment
certificates connected with Sub-fund MCI.TechVentures 1.0., pursuant to the registered pledge agreements
of 27 October 2015.
The interest rate on the Guarantor's series J bonds was based on the WIBOR 6M rate increased by the fixed
The Guarantor's series J bonds may be subject to early redemption at the bondholders' request, on the terms
set out in the terms and conditions of the Guarantor's series J bond issue.
The redemption date of the Guarantor's series J bonds was determined for 11 December 2018. The goal of
the issue of the Guarantor's series J bonds was not defined.
The Guarantor's series J bonds were introduced to trading on the Catalyst Alternative Trading System
organized by the GPW. On 29 February 2016, their first listing on the organized market took place.
15.
Third Party Information and Statement by Experts and Declarations of Any Interest
Auditor's opinion on Guarantor's individual financial statements for the financial years ended 31 December
2015 and 31 December 2014 and the Guarantor's capital group's consolidated financial statements for the
financial year ended 31 December 2014 has been prepared by the:
Audit firm:
License no.:
3546
Registered office:
ul. Inflancka 4A, 00-189 Warsaw, Poland
Responsible person:
Ewa Jóźwik (license no. 11154) and Stacy Ligas
Auditor's opinion on Guarantor's individual financial statements and the Guarantor's capital group's
consolidated financial statements for the financial year ended 31 December 2013 has been prepared by the:
Audit firm:
PKF Consult Spółka z ograniczoną odpowiedzialnością
License no.:
477
128
Registered office:
ul. Okrzycka 6, lok. 1B, 02-695 Warsaw, Poland
Responsible person:
Ewa Ogryczak (license no. 11577)
To the extent known to the Guarantor, the abovementioned entities have no material interest in the
Guarantor.
16.
The audited consolidated financial statements of the Guarantor and auditor's opinions thereof, are, available
for inspection during the standard working hours, upon request at the Guarantor's registered office, and
on the Guarantor's website www.mci.pl.
Any annual reports are available at the same place. Any other documents and materials specified herein and
relating to the Guarantor, including any past financial data of the Guarantor and its subsidiaries for each
of the two financial years prior to the publication of this Prospectus, and the Guarantor's Articles of
Association and are also available for inspection at the Guarantor's registered office.
Any documents specified in this section will be available at the aforementioned locations until the expiration
of this Prospectus.
129
INFORMATION ABOUT THE SECURITY PROVIDER
1.
General Information about the Security Provider
Alfanor 13131 AS
Legal form:
limited company
Registered office:
Oslo
Norway
Registered address:
c/o Intertrust (Norway) AS, Bryggegata 6, 0250 Oslo, 0301 Oslo
Postal address:
c/o Intertrust (Norway) AS, Postboks 2051 Vika, 0125 Oslo
Norway
Telephone no:
+47 23 30 83 20
Business register number:
911 798 808
2.
Incorporation and History of the Security Provider
Alfanor was established on 20 March 2013 under the name Alfanor 13131 AS, as a result of its incorporation
and adoption of articles of association.
Alfanor was registered in the Norwegian Register of Business Enterprises on 10 April 2013, under the
number 911 798 808.
Alfanor was established for an indefinite time.
Alfanor operates under the laws of Norway.
The following events in the development of Alfanor's business activity have been relevant up-to-date:
On 20 March 2013, the company under the name Alfanor 13131 AS was established. It was incorporated in
the Norwegian Register of Business Enterprises (Foretaksregisteret) on 10 April 2013. In 2013 Alfanor
acquired 11,200,000 shares in Indeks. In 2014, Alfanor acquired 1,692,510 shares in Indeks.
3.
3.1
Alfanor's individual financial statements for the financial year ended 31 December 2014 were audited by:
Audit firm:
Revisjonsselskapet K-TEAM AS
License no.:
976048695
Registered office:
Brynsveien 96, 1352 Kolsås, Postboks 17, 1333 Kolsås, Norway
Responsible person:
Kjell Korsgarden
License no.:
1009393
130
3.2
Alfanor's individual financial statements for the financial year ended 31 December 2013 were audited by:
Audit firm:
License no.:
976048695
Registered office:
Responsible person:
Kjell Korsgarden
License no.:
1009393
3.3
Information on the auditor's resignation, dismissal or change
There has been no change in Alfanor's auditors.
4.
Risk Factors
The risk factors are included on pages 19-21 of this Prospectus under chapter Risk Factors Related to the
Security Provider.
5.
Recent Events Related to Security Provider's Solvency
The company has made a significant investment in the listed Turkish company Indeks during the financial
year of 2013. The cost price for the shares was TRY 39,969,215. Additional shares in the same company
were purchased during the financial year of 2014, at the cost price of TRY 7,436,985.
The market value of the shares is slightly reduced after the date of the annual accounts of 2014, but is not
exceeding what can be characterized as normal fluctuations. During first half of 2015 Alfanor received TRY
4,469,238 of dividends from Indeks. Also during first six months of 2015 some additional shares of Indeks
were purchased at the cost price of TRY 158,472.
The financial position of Alfanor is closely related to Indeks performance which disclosed a net profit of
TRY 7.4m in 2Q15, up by 84% year on year basis (YoY), but down by 30% quarter on quarter (QoQ).
Despite being broadly in line with expectations at the EBITDA level, the deviation at the bottom line
stemmed mainly from the higher than expected net financial expenses. On a YoY basis, the 99% YoY
increase at the top line along with a leaner opex/sales ratio of 2.2% in 2Q15 (from 2.8% in 2Q14), taking the
operating margin up by 0.5pp, were the main factors behind the surge at the bottom line. It is expected that
next 12M performance of Indeks should be in range of +20% to +30%.
6.
Business Overview
Alfanor has been established as a special purpose vehicle. The main scope of Alfanor's business is to hold
shares in other companies and businesses, as well as to engage in other related activities. Alfanor does not
produce any goods and does not provide any services outside its scope of business. Alfanor does not employ
any employees.
7.
Please see the structure chart and description on page 85 of the Prospectus. Alfanor belongs to a capital
group whose parent is the Fund. Alfanor belongs to the same capital group as the Issuer,
Thus, Alfanor is not a subsidiary of the Guarantor or a member of the Guarantor's Group.
Alfanor has a subsidiary, Indeks, in which it holds 13,542,317 shares, representing in aggregate 24.18% of
Indeks' share capital.
131
8.
Trend Information
Alfanor is not aware of any material adverse change in its prospects since 31 December 2014.
Alfanor is not aware of any trends, obligations or events that might have a significant impact on the
prospects of Alfanor for the subsequent accounting period.
9.
Alfanor did not make a profit forecast or estimate.
10.
Administrative, Management and Supervisory Bodies
Alfanor is managed by Alfanor's Board of Directors. Alfanor's Board of Directors consists of one to three
members. Members of the Alfanor's Board of Directors were not entrusted with any particular functions
within the scope of their duties as members of the Alfanor's Board of Directors. The Chairman of Alfanor's
Board of Directors is individually empowered to represent Alfanor.
On 6 May 2013, Alfanor concluded the management agreement with, among others, Sub-fund
MCI.EuroVentures 1.0., Hans Gustav Clemetsen, and Intertrust (Norway) AS. The subject of the
management agreement is the provision of directorship, management, accounting and corporate secretarial
services for Alfanor by, in particular, Hans Gustav Clemetsen and Intertrust (Norway) AS. Pursuant to the
management agreement, Intertrust (Norway) AS, where Hans Gustav Clemetsen is employed, agreed
to provide him with sufficient time for performing his duties as a director of Alfanor. Under the management
agreement Hans Gustav Clemetsen agreed to be appointed member of Alfanor's Board of Directors.
The management agreement sets out the list of cases, in which Hans Gustav Clemetsen may terminate that
agreement, resign from his function at Alfanor or cease to further perform it. At the same time, according
to the management agreement, Intertrust (Norway) AS shall independently and without the consent of the
Sub-fund MCI.EuroVentures 1.0. (“Principal”), but having duly informed the Principal to replace the
Chairman of Alfanor's Board of Directors with another Intertrust (Norway) AS's employee if it so deems
feasible. The replacement of the Chairman of Alfanor's Board of Directors may be effected for various
reasons, including internal reasons on Intertrust (Norway) AS's side.
Alfanor's Board of Directors currently consists of the following members:
10.1
Hans Gustav Clemetsen – Chairman of Alfanor's Board of Directors
Since May 2013 he has been Chairman of the Board and Managing Director at Alfanor. Holding his position
at Alfanor he performs and has performed activities involving, in particular, administration of Alfanor.
The place of Hans Gustav Clemetsen's work is Intertrust (Norway) AS, registered address: Bryggegata 6,
0250 Oslo, Norway.
Except for Alfanor he does not perform any functions, other than those mentioned above, which could
be of any significance for Alfanor.
10.2
Felix Edgren – Deputy Board Member
Since July 2015 he has been Deputy Board Member at Alfanor. Holding this position he performs and has
performed activities consisting, in particular, of administration of Alfanor.
The place of Felix Edgren's work is Intertrust (Norway) AS, registered address: Bryggegata 6, 0250 Oslo,
Norway.
132
Except for Alfanor he does not perform any functions, other than those indicated above, which could
be of any significance for Alfanor.
Alfanor is not aware of any potential conflict of interest of persons representing Alfanor's Board of Directors
between any of their duties to Alfanor and their private interests. According to representations submitted
by ach member of Alfanor's Board of Directors, with respect to any of these persons there is no conflict
of interest or potential conflict of interest between these persons' duties to Alfanor and their private interests
or other duties.
11.
Major Shareholder
Sub-fund MCI.EuroVentures 1.0. holds 100% of shares in Alfanor.
There are no arrangements known to Alfanor, the operation of which may, at a subsequent date, result
in a change of control of Alfanor. To the extent known to Alfanor, there are no measures in place to ensure
that the control of Alfanor is not abused.
12.
Financial Information Concerning the Security Provider's Assets and Liabilities, Financial
Position and Profits and Losses
12.1
The historical financial information of the Security Provider is incorporated to this Prospectus by reference.
Historical financial statements for financial years ended 31 December 2013 and 31 December 2014,
respectively, have been audited.
Alfanor's latest individual financial statements were prepared for the period from 1 January 2014 to 31
December 2014.
12.2
Information about the basis for preparation of the financial statements of the Security
Provider
Alfanor does not prepare consolidated financial statements. Alfanor prepares only individual financial
statements.
Audited financial statements of Alfanor for the year ended 31 December 2013 and for the year ended 31
December 2014 were prepared in accordance with the Norwegian accounting standards.
12.3
(a)
For the period from 1 January 2014 to 31 December 2014 and the period from 1 January 2013
to 31 December 2013 in NOK:
Profit for the period
Earnings per share for the annual period (in NOK per share)
- basic
- diluted
133
1.01.2014 31.12.2014
76,642,994
76,642,994
1.01.2013 31.12.2013
5,292,258
5,292,258
766,429
766,429
76,642,994
52,922
52,922
5,292,258
(b)
For the year ended 31 December 2014 and the year ended 31 December 2013 in NOK:
Non-current assets
Current assets
Total assets
Equity
Current liabilities
TOTAL EQUITY AND LIABILITIES
12.4
31.12.2014
234,059,713
837,920
234,897,633
142,357,963
21,777,965
70,761,705
234,897,633
31.12.2013
131,506,390
306,449
131,812,839
65,714,969
65,955,606
142,265
131,812,839
Alfanor does not conduct any judicial, administrative or arbitration proceedings and has not conducted such
proceedings in the period of the past 12 months, which, in Alfanor's best opinion, could have/had, in the past
12 months, a material impact on Alfanor's financial standing and/or profitability.
12.5
Significant Change in Alfanor's Financial or Trading Position
Alfanor's financial standing is highly correlated with the changes in the prices of Indeks' shares that are listed
on the stock exchange and the situation on the foreign exchange market. Indeks' shares, as at the end of
2014, were valued in Alfanor's books at the level of TRY5.70, while, as at the end of June 2015, their price
was at the level of TRY5.50. In the meantime, in the second quarter of 2015, Alfanor received TRY0.3658
of dividend per share. The above mentioned pure equity loss of 3.5% in Alfanor's Income Statement
(excluding the received dividend) was offset to some extent by the appreciation of TRY against NOK.
13.
13.1
Share Capital
The share capital of Alfanor amounts to NOK783,300 and is divided to 100 shares of a nominal value
of NOK7,833.00 each. Alfanor has one share class.
The share capital of Alfanor has been covered in full with a cash contribution.
13.2
Alfanor's Articles of Association
Alfanor's Articles of Association were adopted by Alfanor's general meeting. As of the date of this
Prospectus, Alfanor's Articles of Association adopted by the extraordinary shareholders' meeting on 14 May
2013, are valid.
In accordance with §3 of Alfanor's Articles of Association, Alfanor's core business activity is to hold shares
in other companies and businesses, and engage in other related activities.
14.
Material Contracts
Agreements considered to be material are the agreements concluded by Alfanor, the value of which exceeded
10% of Alfanor's equity as at 31 December 2014, i.e., NOK14,235,796, and those which, in Alfanor's
opinion, due to their specific subject matter or character, may be relevant for Alfanor's business activity and
financial standing.
134
14.1
Amended and Restated Loan Agreement dated 14 May 2015
On 14 May 2015, the Amended and Restated Loan Agreement was concluded between Sub-fund
MCI.EuroVentures 1.0. and Alfanor (the Agreement of 14 May 2015). The Agreement of 14 May 2015
is governed and construed in accordance with Norwegian law.
Pursuant to the Agreement of 14 May 2015, the provisions of the Agreement of 14 May 2015 replaced in full
the provisions of the loan agreement concluded initially between Sub-fund MCI.EuroVentures 1.0. and
Alfanor on 15 May 2013, on the basis of which Alfanor borrowed an amount of EUR9,000,000. As at the
date of the Agreement of 14 May 2015, the balance of the loan was EUR7,810,000.
Based on the Agreement of 14 May 2015, Sub-fund MCI.EuroVentures 1.0. lent to Alfanor EUR9,000,000.
This agreement replaced the initial loan agreement of 15 May 2013, on the basis of which Sub-fund
MCI.EuroVentures 1.0. lent to Alfanor EUR9,000,000 and Alfanor used the amount of PLN 7.810.000 under
the above mentioned facility as of the date of 14 May 2015. The facility used by Alfanor was considered for
the purposes of the Agreement of 14 May 2015. In accordance with the Agreement of 14 May 2015, the
facility has not been charged with interest.
The facility under the Agreement of 14 May 2015 shall be repaid on 15 May 2016, subject to a stipulation
that, if the articles of association of the Fund allow a longer repayment period, the repayment period may
be unilaterally prolonged by Sub-fund MCI.EuroVentures 1.0. for a maximum of one additional year, giving
a total repayment period of the maximum of five years from 15 May 2013. The Agreement of 14 May 2015
allows the facility to be prepaid, without penalty, upon prior notice.
In accordance with the Agreement of 14 May 2015, the obligations of Sub-fund MCI.EuroVentures 1.0.
as lender under the Agreement of 14 May 2015 are conditional that any dispositions by either of the parties
to the Agreement of 14 May 2015 which may affect its capital situation should be immediately
communicated to the other party in writing.
In accordance with the Agreement of 14 May 2015, if the following events occur:
(a)
Alfanor fails to pay any sum payable under the Agreement of 14 May 2015 or defaults in the
performance of any obligation under the Agreement of 14 May 2015, and (if such default is, in the
opinion of Sub-fund MCI.EuroVentures 1.0., remediable) such default is not remedied within seven
days after Sub-fund MCI.EuroVentures 1.0. notified Alfanor of such default; or
(b)
Alfanor fails to immediately communicate any internal disposition which may affect Alfanor's
capital situation;
facility (under the Agreement of 14 May 2015) has become due and payable, whereupon the same shall,
immediately or in accordance with such notice, become due and payable, unless Sub-fund
MCI.EuroVentures 1.0. agrees otherwise.
The current outstanding balance of the facility under the Agreement of 14 May 2015 amounts to EUR
7,810,000.
The Agreement of 14 May 2015 has been considered material due to its value.
14.2
Loan agreement dated 12 March 2014
On 12 March 2014, a loan agreement was concluded between Sub-fund MCI.EuroVentures 1.0. and Alfanor
(the Agreement of 12 March 2014). The Agreement of 12 March 2014 is governed and construed
in accordance with Norwegian law. The Agreement of 12 March 2014 was modified by the amendment
dated 3 November 2014 and 11 November 2014.
135
Based on the Agreement of 12 March 2014, Sub-fund MCI.EuroVentures 1.0. granted to Alfanor a drawable
facility of up to EUR8,000,000. The annual interest has been charged at the rate of 1%. The above
mentioned facility was made available to Alfanor as of the date of the Agreement of 12 March 2014 and for
the period until 31 December 2014 (the "drawdown period"). Alfanor was entitled under the Agreement of
12 March 2014 to request amounts from the above mentioned facility to be made available as many times as
deemed necessary, and Sub-fund MCI.EuroVentures 1.0. was obliged to make such amounts available to
Alfanor upon such request.
Initially, the facility under the Agreement of 12 March 2014 was to be repaid within one year from the date
of its execution, subject to a stipulation that, if the articles of association of the Fund allow a longer
repayment period, the repayment period may unilaterally be prolonged by Sub-fund MCI.EuroVentures 1.0.
for a maximum of four additional years, giving a total repayment period of a maximum five years from the
date of execution of the Agreement of 12 March 2014. The Agreement of 12 March 2014 allows the facility
to be prepaid, without penalty, upon a prior notice. The repayment date of the facility was extended to
16 November 2016.
In accordance with the Agreement of 12 March 2014, the obligations of Sub-fund MCI.EuroVentures 1.0.
as a lender under the Agreement of 12 March 2014 are subject to the condition. The abovementioned
condition is that any dispositions by either of the parties to the Agreement of 12 March 2014 which may
affect its capital situation, should be immediately communicated to the other party in writing.
In accordance with the Agreement of 12 March 2014, if the following events occur:
(a)
Alfanor fails to pay any sum payable under the Agreement of 12 March 2014 or defaults in the
performance of any obligation under the Agreement of 12 March 2014, and (if such default is, in the
opinion of Sub-fund MCI.EuroVentures 1.0., remediable) such default is not remedied within seven
days after Sub-fund MCI.EuroVentures 1.0. notified Alfanor of such default; or
(b)
Alfanor fails to immediately communicate any internal disposition which may affect Alfanor's
capital situation;
facility (under the Agreement of 12 March 2014) has become due and payable, whereupon the same shall,
immediately or in accordance with such notice, become due and payable, unless Sub-fund
MCI.EuroVentures 1.0. agrees otherwise.
Prior to the date of this Prospectus, pursuant to the Agreement of 12 March 2014, Alfanor received the total
amount of EUR3,500,000, of which EUR1,090,000 has been repaid by Alfanor.
The Agreement of 12 March 2014 has been considered material due to its value.
15.
Third Party Information and Statement by Experts And Declarations of Any Interest
Auditor's opinion on Alfanor's individual financial statements for the financial year ended 31 December
Audit firm:
License no.:
976048695
Registered office:
136
Responsible person:
Kjell Korsgarden
License no.:
1009393
Auditor's opinion on Alfanor's individual financial statements for the financial year ended 31 December
Audit firm:
License no.:
976048695
Registered office:
Responsible person:
Kjell Korsgarden
License no.:
1009393
To the extent known to Alfanor, the abovementioned entities have no material interest in Alfanor.
16.
For the life of the Prospectus the following documents (or copies thereof), where applicable, may
be inspected on both the Issuer's and the Guarantor's websites:
(a)
Alfanor's Articles of Association;
(b)
all reports, letters, and other documents, historical financial information, valuations and statements
prepared by any expert at Alfanor's request, any part of which is included or referred to in the
Prospectus; and
(c)
the historical financial information of Alfanor for each of the two financial years preceding the
publication of the Prospectus.
137
INFORMATION ABOUT INDEKS
The information included in this chapter of the Prospectus is presented as general information. This chapter
was prepared exclusively on the basis of Indeks consolidated financial statement and operation report for the
year ended 31 December 2014. Alfanor, as the minority shareholder of Indeks, has no access to the
documents or information regarding Indeks, other than publicly available. The Issuer has not examined the
abovementioned documents in the light of their genuineness, accuracy or completeness.
1.
General information about Indeks
Indeks Bilgisayar Sistemleri Mühendislik Sanayi ve Ticaret A.Ş.
Legal form:
a public joint stock corporation
Registered office:
Istanbul
Turkey
Address:
Merkez Mah. Erseven Sok. No: 8/1, 34406 Kağıthane, Istanbul
Turkey
Telephone:
+90 (212) 331 21 21
Fax:
+90 (212) 332 09 09
Website address:
www.index.com.tr
Istanbul Trade Registry Number:
256376
2.
Incorporation and History of the Indeks
Indeks was founded on 10 July 1989 to operate in the computer sector. Indeks was transformed into a joint
stock company in April 2000. The headquarters of Indeks is in Istanbul and it has branches in Ankara, Izmir
ans Diyarbakır. Indeks operates in the Information Technologies (IT) sector and deals with the purchase,
sales technical and software support of computers supplies and data transmission equipment.
Indeks is registered to the Capital Markets Board of Turkey since June 2004 and 15.34% of its shares are
traded on Istanbul Stock Exchange (the ISE).
Indeks elected its financial year to be 1st January to 31st December.
Indeks was established for an indefinite time.
Indeks operates under the laws of Turkey, the Indeks articles of association, as well as the other internal
regulations of Indeks.
The following events in the development of Indeks' business activity have been relevant up-to-date:
Indeks entered into a distributorship agreement with 3M, an American company operating in Turkey, for 3M
magnetic medium products in 1989. Indeks increased its market share in the 3M magnetic products market
from 1.2% to 55% in one year. It achieved a turnover of approx. USD 875,000 with only 6 members of staff
in 1989. In the following year, 1990, it made a turnover of approx.USD 1,380,000 with 19 members of staff.
In 1991 it entered into a contract with the Italian company named Olivetti to act as an authorised seller of
Olivetti PC products. In the same year, Indeks increased the number of staff to 36 and made a turnover of
approx.USD 2,188,000.
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Indeks set up Ankara branch as its first branch in 1992 and started more permanent activities in the Central
Anatolia Region. In 1992 the number of its staff increased to 49 and its turnover reached USD 3.7 million.In
1993, Indeks reached a turnover of USD 9.2 million and it had 56 members of staff.
In 1994, it has become the Turkish distributor of HP consumables, APC Uninterrupted Power Supplies and
Siemens Nixdorf PC products. Then, it became the 19th biggest IT company of the Turkish market. In 1994
it reached a turnover of USD 11.3 million and it had 61 members of staff.
It founded its Izmir branch in April 1995 and signed a contract with IBM in May. Just in the second half of
the same year, i.e. at the end of 1995, it was granted “IBM PC Business Partner Award” by IBM due to its
achievements as a business partner. With its significant ‘channel' activities in the same year, Indeks won
“The Most Active Distributor Award” of Interpro Medya A.Ş., which is considered valuable by the sector. It
achieved a turnover of USD 15.9 million and 62 members of staff in 1995. Thereafter, it has become the
16th biggest IT company in the sector.
In 1996, IBM changed the distribution model in PC sales organization and adopted the “distributorship”
model. Thus, Indeks has become the first Turkish company that entered into a distributorship contract with
IBM. It made 4,127 units of IBM PC in 8 days in April of the same year, which was first in the market. By
the end of the year, Indeks reached the turnover of USD 38.7 million and it had 70 members of staff. It
received the title of “The Most Active Computer Company” once more in 1996, just like in 1995.
In 1997, Indeks has become the 8th biggest IT company in Turkey, with a turnover of USD 58.6 million and
75 members of staff.
Indeks entered into a distributorship agreement for Lotus & IBM Software products, thereby starting
distribution of software in 1998. In the same year, it entered into a distributorship agreement with HP A.Ş.
for distribution of hardware products. In the same year, it entered into a new agreement with IBM and
became the distributor of AS/400, being one of the most important value-added products of Turkey. Towards
the end of that year, Indeks entered into a distributorship agreement with Kingston. In 1998, Indeks won
“The Most Active IT Company Award” again, after in 1995 and 1996 and became the only IT company
obtaining this award three times. In November 1998, the supplies department of Indeks was reorganized as
an independent company and became “DESPEC Türkiye” with a joint investment of Von Dorp Despec
Group. With its turnover of USD 89.4 million and 131 members of staff in 1998, İndeks became the 6th
biggest Turkish IT company.
In 1999, Indeks entered into a distributorship agreements with many significant world brands such as Cisco,
Microsoft, Xerox, IBM Pos and Escort and its “logistics centre” started operations in June of the same year.
Indeks reached the turnover of USD 111 million with 155 members of staff in 1999.
On 12 April 2000, Indeks transformed from a limited liability company into a joint stock company. In
August 2000, Pouliadis and Associate Societe Anonyme Industrial and Commercial of High Technology
Systems S.A. acquired 50% of Indeks, as a result of which Indeks became a company with foreign
shareholder. In the same year, Indeks entered into an agreement for distributorship of Epson products and
added Epson products to its increasingly growing range of products. Indeks achieved a turnover of USD 163
million by the end of 2000.
In 2001, Indeks entered into a distributorship agreement with COMPAQ. With this agreement, Indeks blazed
a trail being the only distributor dealing with IBM, HP and COMPAQ PC products. In the same year, Indeks
also entered into distributorship agreements for Novel, Sony and Microsoft OEM products. Indeks continued
its investments regardless of the economic crisis in 2001 and in March of the same year, it acquired 50.5% of
Datagate Bilgisayar Malzemeleri Ticaret AŞ. (Datagate), which is a leading company in computer
parts/OEM sector, thereby boosting the morale of the sector. In the same period, it acquired 70% of Neteks
İletişim Ürünleri Dağıtım A.Ş. (Neteks), which is one of the highly experienced distribution companies in
the network, and continued its growth regardless of the crisis. In the Turkey Top 500 ICT Companies
Ranking performed annualy by Interpro Medya A.Ş. (“Top 500 Ranking”), in 2001, Indeks ranked 1st in the
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category of “IT Hardware Incomes”, 2nd in the category of “Turkish IT Companies” and 11th in the general
ranking of the information and communication technologies (ICT) sector.
In 2002, Oki printers and Toshiba notebook and server products were included in the Indeks range of
products. The turnover of Indeks in 2002 was USD 189 million.
Products with Fujitsu Siemens and Nec brands were added to the product portfolio of Indeks in 2003.
Further, the share of Indeks in Datagate, of which 50.5% shares were acquired by Indeks in 2001, was
increased to 85%. The consolidated turnover of Indeks reached USD 323 million as of the end of 2003.
On 24 June 2004, 15.34% of the Indeks' shares were offered to public on ISE. In 2004, Indeks made
distributorship contracts with Kingmax and Asus for memory and barebone products, respectively, and
started to distribute such products. In the same year, Indeks was awarded ISO 9001:2000 certificate.
On 2 February 2005, Indeks acquired 80% of Neotech Teknolojik Ürünler Dağıtım Anonim Şirketi for
wholesale trade of consumer electronics and communication products as a new field of operation of Indeks.
In March 2005, the registered capital system was adopted, and its maximum registered capital was approved
to reach TRY 75,000,000. In May 2005, the issued capital of Indeks was increased from TRY 17,600,000 to
TRY 45,000,000. In September 2005, Indeks entered into an exclusive distributorship agreement with TPV
Technology Limited, which has a 19.5% global market share in the worldwide production of the monitors
and which has realized a turnover of USD 4 billion in 2004 for distribution of AOC branded LCD, CRT
Monitor, Plasma Monitor and LCD TV products in Turkey. According to the Top 500 Ranking issued on 27
May 2005 for 2004, Indeks ranked 1st in the categories of notebooks, desktop PCs, print systems, servers,
data backup and storage units, office software and OEM and 8th in the turnover-based general ranking of
Turkey. With these results, Indeks achieved to be the only local computer company in the top ten.
In February 2006, 30.3% of the shares of the second biggest company of the group and a subsidiary of
Indeks, Datagate, was offered to public and the company's shares were subject of trading on ISE, beginning
from 10 February 2006. Thus, two companies of the Indeks group have been offered to public and begun to
be traded on ISE. Partnership share of Indeks decreased from 85% to 59.2% with the public offering of
Datagate. The issued capital of Indeks was increased from TRY 45,000,000 to TRY 55,000,000 in May
2006. TRY 8,718,703 of the increased amount was covered from the end year profit of 2005 and the rest
amount of TRY 1,281,297 from extraordinary reserves. Indeks has executed one of the most important
investments in the ICT sector by purchasing Karadeniz Orme A.S. (whose trade name has been changed into
Teklos Teknoloji Lojistik Hizmetler A.Ş.). Indeks and its subsidiaries included in the consolidated financial
statements distributorship agreements with Canon for printer, fax and scanner products, with Western Digital
Corporation for hard disk products, with Panasonic for consumer electronics, with Viewsonic for monitor
products and with Sony Vaio for notebook products. According to the 2005 Top 500 Ranking issued in 2006,
Indeks, with its turnover of approx.TRY 758,634,000, again ranked 1st in the category of companies selling
only computers, like in 2004. Indeks kept its special place as the only local computer company in the top ten.
It was also ranked the biggest company in the category of markets with respect to the incomes from server,
print systems, OEM, operating system, office software and e-trade sales.
In 2007, Indeks and its subsidiaries entered into a distributorship contracts with Philips for monitors and PC
peripherals, Asus for notebook products, Apple IMC for Apple brand products, Trend Micro for software
products for internet security and viruses, Nokia for e-series products and LG Electronics for notebook
products. In July 2007, the issued capital of Indeks was increased from TRY 55,000,000 to TRY 56,000,000.
The amount of increase, i.e. TRY 1,000,000 was covered from the profit for the period of 2006.
On 24 July 2007, Indeks and its subsidiary Datagate sold 50% of their shares in Neteks, an affiliate of
Indeks, to Westcon Group Eurepean Operation Limited, one of the leading global companies in its field.
26% of the 50% shares were sold by Indeks and 24% of the shares were sold by Datagate. Following such
sale, the shares of Neteks were held by Indeks and Westcon Group on 50%-50% basis. It was the first time
when Westcon Group made an investment in Turkey on the joint ownership basis. After the abovementioned
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transaction, Westcon Group was operating only with its fully owned subsidiaries in 19 countries around the
world.
According to the 2007 Top 500 Ranking, Indeks ranked 7th in the general ranking based on turnover
achieved in 2006 among other companies, including telephone operators and mobile phone sellers. It also
ranked first with its sales income of approx. TRY 901,778,000, like in the previous years, in the category of
companies selling only computers. Further, it ranked 1st in nine ICT categories. The categories in which
Indeks ranked first were: the portable computer wholesale trader and distributor, data backup and storage
hardware, server, print systems wholesale trader and distributor, data communication hardware, OEM
products, operating system, office software wholesale trader and distributor and e-trade.
In 2008, Indeks entered into a distributorship agreement with LG, which is one of the most valuable brands
of the world, for notebooks, consumer products and monitors and with Asustek for Asus branded server
products. In the same year, Neotech, a subsidiary of Indeks, and Datagate were appointed as the distributors
of Wacom and Belkin products, respectively. Indeks ranked 6th in the general ranking based on sales made
in 2007 among the first 500 ICT companies, including telephone operators and mobile phone sellers in
Turkey. Indeks also ranked 1st with a sales revenue of approx. TRY 1,022,919,000, like the previous years,
in the category of companies selling only computers. Further, it ranked 1st in eight ICT categories.
In 2009, Indeks entered into a distributorship agreements with Iomega and Dell and a supply contract with
Best Buy. The contracts entered into by Neotech A.Ş., a subsidiary of Indeks, for Apple and Airties products
were transferred to Indeks as a result of the segment adjustments in this year. In the same period, Neteks, an
affiliate of Indeks, entered into a distributorship agreements with Juniper, IBM ISS and Avaya, and Datagate
entered into a distributorship agreement with Fujitsu Siemens. Indeks ranked 7th in the Top 500 Ranking,
with its sales income of approx. TRY 927,893,000, in the turnover-based general ranking of Turkish
companies. In the analysis of the general ranking results, Indeks ranked 1st, as the previous years, among the
companies dealing with computer trade only. It also ranked 1st in six ICT categories. Further, Datagate,
which is a subsidiary of Indeks, ranked 1st in the category of OEM (computer parts) incomes and Neteks,
which is also a subsidiary of Indeks, ranked 1st in the category of data communication hardware.
In 2010, Indeks logistic company - Teklos A.Ş. achieved the contract of Turkish Telecom for storage and
distribution of the products which will be provided to the customers of Turkish Telecom. Indeks ranked 7th
among the Top 500 Ranking, with its sales income of TRY 1,087,422, in the turnover-based general ranking.
In the analysis of the general ranking results, Indeks ranked 1st, as the previous years, among the companies
dealing with computer trade only. It also ranked 1st in six different ICT categories. These were personal
computer, mobile, printing systems, data back up and storage, monitor, operating systems and B2B e-trade.
Further, Datagate, a subsidiary of İndeks, ranked 1st in the category of OEM (computer parts) incomes and
Neteks, also a subsidiary of İndeks, ranked 1st in the category of "data communication hardware”.
Furthermore, Indeks has started negotiations with Canon Eurasia Ltd for the distribution of cameras, video
camcorders products and their accessories in Turkey as Canon is one of the biggest producer of these types
of products in the world.
A subsidiary of Indeks, Neteks achieved the distributor of the year award organized by Cisco Systems in
2009. Indeks achieved the most efficient business partner award which was organized by Lenovo in China in
2009. In addition, Indeks has been awarded the distributor of the year organized by IBM Turk Ltd in
Istanbul.
In 2011, in parallel to Indeks business plans and targets, Indeks acquired 51% of Artım Bilişim Çözüm ve
Dağıtım A.Ş. which provides distribution of value added solutions and supplies spare parts in IT sector. This
transaction involved USD 780,000.
A subsidiary of Indeks, Neotech Teknolojik Ürünler Dağıtım A.Ş. entered into an agreement with Canon
Eurasia Ltd to distribute Canon branded cameras, video cameras and accessories in Turkey. In the annual
meeting (business partners of the year) held on 2 February 2011 and organized by IBM, the year of 2010 was
reviewed. Indeks has been awarded as the Distributor of 2010.
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During the meeting organized by Hewlett Packard Turkey in Istanbul, Indeks has been awarded as having
the biggest business volume in personal systems group product group in distributor category between 4
distributors by considering parameters such as revenue made in this product group, superior logistic services
given, creating success in the sales of all HP branded products in Turkey.
Indeks ranked 7th among the Top 500 Ranking, in the turnover-based general ranking. Neotech Teknolojik
Ürünler Dağıtım A.Ş., a subsidiary of Indeks, entered into an agreement with HTC Corporation to distribute
HTC branded smart phones, tablet, PC and accessories in Turkey. Indeks was appointed as the only
distributor of Office 365 products by Microsoft Turkey and Europe together. These products include
specifications of e-mail, Microsoft Office, combined messaging and file sharing, etc.
In 2012, Indeks established a company - Indeks International FZE in Sharjah Airport International Free Zone
in United Arab Emirates to operate mainly in Middle East and Africa in IT. Indeks is a sole shareholder of
Indeks International FZE with paid up capital in amount of AED 150,000.
Indeks purchased 55% of Alkım Bilgisayar Sanayi ve Ticaret A.Ş, which provides sales services for leading
IT brands of the world, on the basis of the long term strategic targets and business plans of Indeks regarding
increase of profitability. USD 3,000,000 was paid for this transaction. In 2011, Indeks ranked 8th in the Top
500 Ranking, in the turnover-based general ranking, with its sales income of approx. TRY 1,513,546,000. In
the analysis of the general ranking results, Indeks ranked 1st, as in the previous years, among the companies
dealing with computer trade only. Besides, it was ranked 1st company in software and hardware distribution.
It also ranked 1st in six different ICT categories. These were: data back up and storage, server, tablet and
mobile pc, tablet and mobile pc distribution and B2B e-Trade. Further, Neteks, a subsidiary of Indeks,
ranked 1st in the category of network and data communication hardware.
Indeks entered into a contract with Apple Europe Ltd to distribute iPad, Mac, iPod and its accessories in
Turkey. Indeks predicts that the Apple brand will be very strategic value in the Indeks future as this brand
made a revolution in IT and telecom world. Adding these high consumer demanded products to Indeks
product portfolio is intended to make a huge contribution to Indeks growth, with the estimated revenue of
approximately TRY 250 million.
On 20 December 2012 Indeks has been awarded by Microsoft Turkey as the distributor of the year in a
finished goods licenses category. This award was given in revenue, growth, number of dealers made
purchasing from the distributor and efficiency categories.
Alkım Bilgisayar Sanayi ve Ticaret A.Ş., a subsidiary of Indeks, was sold and transferred as a whole with
purchasing amount of USD 3,000,000 to Feridun Sabah.
In 2013, Indeks entered into a distribution contract with Canon, which is one of the biggest photocopy and
printer producers. Indeks entered into agreement with Seba construction company. According to this
agreement, Indeks expects USD 88.5 million from the sale of the project, which will be developed by Seba
construction company. Indeks entered into an agreement with Euler Hermes Insurance Company to insure its
receivables on April 2013. This is valid for 2 years. Indeks ranked 9th among the Top 500 Ranking, in the
turnover-based general ranking, with its sales income of approx. TRY 1,412,201,000. In the analysis of the
general ranking results, Indeks ranked 1st, as the previous years, among the companies dealing with
computer trade only. It was also ranked 1st company in software and hardware distributor. Further, it ranked
1st in four different ICT categories. Indeks entered into an agreement with Apple for the distribution of
Apple iphone products which will make a significant contribution to the Indeks growth.
In 2014, Neteks, which is a subsidiary of Indeks, achieved Cisco award for its superior performance in
distribution in 2013. In addition, other Indeks subsidiary - Datagate entered into a distribution agreement
with AVEA GSM Operator to distribute telecom products to southern region of Turkey. Indeks entered into
an agreement with Lenovo to distribute Lenevo smart phones to non Telco channel in Turkey. Indeks annual
sales expectation is approx. TRY 100,000,000 from this distribution contract. Indeks also entered into a
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contract with ACER, AOC and Fujitsu to distribute desktop, laptop, monitor, server, data storage and
peripherals in Turkey.
3.
3.1
The Indeks consolidated financial statement for the period from 1 January 2013 to 31 December 2013 was
examined by:
Audit firm:
Güreli Yeminli Mali Müşavirlik Ve Bağimsiz Denetim Hizmetleri A.Ş.
Registered office:
Merkez Ofis: Beybi Giz Plaza, Dereboyu Coddesi Meydan Sokak No: 1 Kat: 19
34398 Maslak/Istanbul
Responsible person:
Dr. Hakki Dede
3.2
The Indeks conditional financial statement for the period from 1 January 2014 to 31 December 2014
was examined by:
Audit firm:
Registered office:
Merkez Ofis: Spine Tower Buyukdere Cad. 59, Sok. No: 243 Kat: 25-26
Maslak 34398Sanyer/Istanbul
Responsible person:
Dr. Hakki Dede
4.
Risk Factors
The risk factors are included on pages 21-23 of this Prospectus under the chapter Risk Factors Related to
Indeks.
5.
Recent Events Related to Indeks Solvency
Indeks consolidated financial statement for the year ended 31 December 2014 and operation report for the
year ended 31 December 2014 do not include any information regarding the recent events related to Indeks
solvency.
6.
Business Overview
6.1
Indeks is a holding company, which has 8 affiliates and subsidiaries operating in different fields of
technology products. Indeks operates in the IT sector and deals with the purchase, sales, technical and
software support of computers, computer supplies and data transmission equipment. Indeks operates as a
main distributor (“broadline distributor”) in IT industry. It buys IT products from suppliers at certain prices
and maturity periods and subsequently sells the products to the sales channels that will sell them to the end
users. All the sales are operated via dealers. Indeks does not plan to develop a sales structure that will
include direct sales in the near future. Indeks makes sales and distribution via its 323 employees and more
than 7,000 dealers from its logistic centres in Istanbul, Ankara and Izmir.
Indeks branch offices in Ankara and Izmir, established in 1992 and 1995, respectively, operate as “district
offices”. Having their own logistic, sales, accounting, finance, current accounts and customer services
departments, they are responsible for the district Ankara, Central Anatolia and Eastern Anatolia Regions,
143
Izmir Office for the District Izmir, Western Anatolia and Aegean Regions. Other areas are under the
responsibility of the headquarters in Istanbul.
Indeks mission is to “Continue its leadership by providing service as a main supply centre of IT products for
all companies in the computer channel considering their changing requirements”. This definition has been
determined by Indeks board of directors and announced to the general public through the website of Indeks.
6.2
In the Top 500 Ranking, Indeks was ranked 9th in the general ranking based on turnover achieved in 2013
among the companies including telephone operators and mobile phone sellers. Indeks ranked 1st in the
hardware category among the companies, including those above. Indeks ranked 1st as the previous years, in
the category of companies selling only computers. Indeks also ranked 1st in six IT categories.
6.2.1. Turkish IT Sector
The usage of computers in Turkey started in the end of the 80's. Although there was a very rapid
development in the sector between the years 1990 and 1995, usage of computers was limited to mostly
financial sector, governmental units, big businesses and universities. In the second half of the 90's, the
increase in the usage of computers made the IT sector one of the most rapidly growing sectors in Turkey.
According to the data issued by International Data Corporation (IDC), the Turkish Information and
Communication Technologies (“IT”) sector achieved a compound annual growth rate (“CAGR”) of 20%
between 1997 and 2000. In 2000, the Turkish IT sector has reached its greatest business volume of USD 2.3
billion, whereas that figure reduced to USD 1.2 billion with 49% recession in 2001 because of the
economical crisis that was encountered in the end of 2000 and the postponement of the demand of IT
investments by public and private sectors. The figures achieved in 2000 were again caught only in 2004,
with a business volume of USD 2.4 million.
IT investment demands deferred in the 2001 crisis period have been started to be realized with the
appearance of the increasing stable outlook of the economy and these investment expenditures have been one
of the most powerful dynamics of the market in the first 5 years following 2001. New investments that
increased after merger and acquisition operations in all sectors, beginning in the finance and
telecommunication sectors and spread to other sectors from 2005 on, technology replacement investments,
increased IT investment made by the government as part of e-government projects, increase in the internet
usage rates and finally, in the number of the users who follow up the rapidly developing technology became
the driving forces of the market between 2005 and 2008. Although the first quarter of 2008 started very
favourably, the sector started to lose its strength due to the suit brought to close AKP, a slowdown was
experienced in the third quarter when not so many negative results were observed. However, with the last
quarter, the sector was affected by the global financial crisis that started at the beginning of October, and
thus, the quarter was closed with a double-digit shrinkage. 2009 was experienced as a year when the wounds
of the crisis were bandaged; the effects of the crisis in the first quarter diminished with the effect of the VAT
cut applied for 6 months, including the second and third quarters, and positive growth was recorded in the
fourth quarter. In 2010, IT sector achieved quite gradual growth after constitutional referendum particularly
static summer season. In 2011, particularly in the second half of the year, IT sector was affected negatively
by currency fluctuations sourced by debt crisis of European countries. On the other hand, if the share of the
end-users in the market is monitored in the period between 1995 and 2005, it would be clearly seen that the
market structure has changed considerably.
According to IDC's research, IT market achieved growth of 10.4% from 2009 to 2010, 8.1% from 2010 to
2011, 15% from 2011 to 2012 and 9% from 2012 to 2013. In 2014, sector faced with 0.5% shrinkage
because of high penetration of smart phones.
It is estimated that the rate of the number of PC in operating status to the total population has increased from
8% to 27% in the period between 1995 and end of 2010, and that the rate of the internet users to the total
population has increased from 10% to 37% in the same period. This indicates that PC ownership and internet
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usage rates increased over 3 times in the last 15 years. PC ownership and internet usage rates have increased
by 67% and 40%, respectively in the last 5 years. The PC and internet penetration in Turkey between 2005
and 2015 has developed.
According to the results of “Households IT Usage Research” published by the Turkish Statistical Institute
(TÜİK) in April 2013, the PC and internet usage rates of individuals are 53.5% and 53.8%, respectively. By
educational level, the population who use the computer and internet most are graduates of first degree and
higher education levels. According to the report results, PC and internet usage rates have increased by 7%
and 10%, respectively in the period between 2013 and 2014. Although the computer and internet usage rate
of the rural population is lower than the urban population, the computer and internet usage rates increased by
3% and 3%, respectively, in the rural areas. Although the increasing rate is pleasing, it is clear that the
computer and internet usage rate in the urban areas is 2 times higher than the rural areas.
6.2.2. IT Market comparison in the world and Turkey
According to IDC's report regarding growth rates between countries, the highest growth rate from 2013 to
2014 was seen in Egypt (33%) and Israel (4%), Saudi Arabia and South Africa (1%). Other countries faced
with shrinkage, Ukraine had highest shrinkage (-53%). Turkey had -8% shrinkage in 2014.
Turkish IT sector is essentially separated into three main groups, namely hardware, software and IT services.
According to the Turkey results published by IDC in 2014, the business volume of the Turkish ICT market
reached USD 6.2 billion in 2012. The same report shows that the share of the “hardware”, “software” and
“IT services” sub-segments in the total market were 66.1%, 12.3% and 21.6%, respectively.
According to the 2014 Turkey IT expenditures survey conducted by IDC, the Turkish IT market is expected
to have a 2.1% CAGR in the period between 2012 and 2018, reaching USD 7.2 billion in 2018. These
estimates are based on the anticipated growth rates, investment anticipated to be made by companies rapidly
as they were deferred due to the crises of 2001 and 2008, effects of IT expenditures incurred by the public
sector for e-transformation projects on IT consumption, increased use of IT in education, anticipated
increased rate of the use of the Internet and mobile technologies and replacement investments to be caused
by new technologies. Contribution of smart phone products will be much higher to sector growth in 2015.
7.
Indeks is a holding company and has 8 affiliates and subsidiaries.
As indicated in Indeks consolidated financial statement for the year ended on 31 December 2014, the Indeks'
ownership structure in the subsidiaries on 31 December 2014 was as follows:
Company name*
Capital
%
of
direct
ownership
% of indirect
ownership
Datagate
TRY 10,000,000
59.24
59.24
Dağ
TRY 1,000,000
80.00
80.00
Teklos Teknoloji Lojistik Hizmetleri A.Ş.
(Teklos)
TRY 5,000,000
99.99
99.99
İnfin Bilgisayar Ticaret A.Ş.
TRY 50,000
99.80
99.80
TRY 1,210,000
51.00
51.00
Neotech
Teknolojik
A.Ş.(Neotech)
Artım Bilişim
A.Ş.(Artım)
Çözüm
Ürünler
ve
Dağıtım
145
Company name*
Capital
%
of
direct
ownership
% of indirect
ownership
İndeks International FZE (Indeks FZE)
UAE
Dirham
150,000
100
100
Datagate International FZE (Datagate FZE)
UAE
Dirham
150,000
-
59.24
* The financial statements of Datagate, Neotech Teknolojik Ürünler Dağ A.Ş., Teklos Teknoloji Lojistik
Hizmetleri A.Ş., Artım Bilişim Çözüm ve Dağıtım A.Ş. and İndeks International FZE are consolidated
according to the full consolidation method. The financial statements of Neteks are consolidated according to
the proportionate consolidation method.
As indicated in Indeks consolidated financial statement for the year ended 31 December 2014, the following
joint ventures were subjected to consolidation:
Company name
Capital (TRY)
%
of
direct
ownership
% of indirect
ownership
Neteks*
1,100,000
50.00
50.00
*As stated in the Indeks operating report for 2014, Neteks had a 99% owned subsidiary - Neteks Dış Ticaret
Limited Şirketi.
Infin Bilgisayar Ticaret A.Ş. and Neteks Dış Ticaret Limited Şirketi were not consolidated due to the fact
that they are both insignificant and do not have material effect on the Indeks group consolidated financial
statements.
The main shareholder of Indeks is Nevres Erol Bilecik, who has 35.93% of Indeks shares.
8.
Trend Information
year ended 31 December 2014 do not include any trend information.
9.
year ended 31 December 2014 do not include any information regarding profit forecasts or estimates of
Indeks.
10.
Administrative, Management, and Supervisory Bodies
10.1
Board of directors
The body empowered to represent the Indeks is its board of directors.
Consolidated financial statement for the year ended 31 December 2014 and operation report for the year
ended 31 December 2014, provide that half plus one of the members of the Indeks' board of directors are
elected from the candidates nominated by the Group A shareholders.
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During the general assembly which was held on 22 May 2012, members of the Indeks board of directors
were elected for duration of three years, and their duties and powers were determined pursuant to the Indeks
articles of association and the relevant Turkish law provisions.
There are no independent members in the Indeks' board of directors and election of independent members
was not provided in the Indeks' articles of association. Each year, in the Indeks' ordinary general assembly
meetings, permission is given to the chairman and members of the board of directors, pursuant to the Articles
334 and 335 of the Turkish Commercial Code, to perform the works, in person or on behalf of other people,
included in the subject of the Indeks business operations and other relevant operations. Other affiliates of the
Indeks are represented in the board of directors. On 31 December 2014, Indeks board of directors consisted
of the following members:
(a)
Nevres Erol Bilecik – Chairman of the board of directors
Nevres Erol Bilecik graduated from Istanbul Technical University, Department of Computer Engineering.
Nevres Erol Bilecik, who established Indeks in 1989, acts as the chairman of the following subsidiaries of
Indeks, besides Indeks: Despec Bilgisayar Pazarlama ve Ticaret A.Ş., Datagate, Neteks, Neotech Teknolojik
Ürünler Dağitim A.Ş., Desbli Teknolojik Ürünler Ticaret A.Ş., Homend Elektrikli Cihazlar San. Ve Ticaret
AŞ., Infin Bilgisayar Ticaret A.Ş and Teklos Teknoloji Lojistik Hizmetleri AŞ. Moreover, between years
2002 and 2005, he presided Turkish Informatics Industry Association established in 1974, the oldest civil
society organization in the ICT sector, members of which are companies realizing 95% of the total
transactions volume of the Turkish ICT sector.
(b)
Salih Baş – Vice-Chairman of the board of directors, Deputy Chairman
Salih Baş graduated from Anadolu University, Department of Business Administration. He has been working
for Indeks group since 1990. In 2003, while he was acting as the Assistant General Manager – Finance &
Accounting for Indeks, he was appointed as the general manager and vice chairman of the board of directors
of Datagate. He currently acts as the deputy chairman for the companies, Indeks, Teklos Teknoloji Lojistik
Hizmetleri A.Ş., Homend Elektrikli Cihazlar San. Ve Ticaret A.Ş., Infin Bilgisayar Ticaret A.Ş. and Desbil
Teknolojik Ürünler Ticaret A.Ş., and as a member of the board of directors in the following companies:
Despec Bilgisayar Pazarlama ve Ticaret AŞ., Neotech Teknolojik Ürünler Dağitim AŞ. and Neteks.
(c)
Atilla Kayalıoğlu – Member of the board of directors, General Manager
Atilla Kayalıoğlu graduated from Boğaziçi University, Department of Mechanical Engineering in 1974.
Then he received a masters degree from Syracuse University, Department of Industrial Engineering. He
carried out several duties in IBM Turk between the years 1980-1999; and in 1999, when he was the Global
Services Manager he left IBM Turkey and joined Indeks. Kayalıoğlu acts as a board member and general
manager of Indeks. He also acts as a board member of the companies of Neteks, Datagate, Infin Bilgisayar
Ticaret A.Ş. and Teklos Teknoloji Lojistik Hizmetleri A.Ş.
(d)
Ayşe İnci Bilecik – Member of the board of directors, Computer Engineer
Ayşe İnci Bilecik graduated from Istanbul technical University, Department of Computer Engineering. She
also acts as a board member of Desbil Teknolojik Ürünler Ticaret A.Ş., a subsidiary of Indeks. Being one of
the founding partners of Indeks, Ayşe İnci Bilecik used to work as an engineer specialized in software in the
ICT sector for long years.
(e)
Hali Duman – Member of the board of directors; Assistant General Manager
Hali Duman graduated from Marmara University, Department of Business Administration. He carried out
several duties in Yücelen İnşaat A.Ş. between the years 1987 and 2000. In 2000, when he was the Manager
of Finance, he left Yücelen İnşaat and joined Indeks as Finance Director. He also acts as a board member of
Datagate, Neteks, Teklos Teknoloji Lojistik Hizmetleri A.Ş., Neotech Teknolojik Ürünler Dağitim AŞ.,
147
Despec Bilgisayar Pazarlama ve Ticaret AŞ., Desbil Teknolojik Ürünler Ticaret A.Ş., Homend Elektrikli
Cihazlar San. Ve Ticaret A.Ş., Infin Bilgisayar Ticaret A.Ş., ve Alkim Bilgisayar AŞ and acts as Assistant
General Manager – Finance of Indeks.
(f)
Tomasz Czechowicz – Member of the board of directors
Detailed information regarding Tomasz Czechowicz is provided in parts of the Prospectus referring to the
Issuer and Guarantor.
(g)
Ulrich Kottmann – Member of the board of directors
Ulrich Kottmann graduated from the German University of Applied Sciences Esslingen, a combined study in
“Engineering and Business Administration”. He started his professional career in years 1983 – 1986 in the
Finance department of Computervision Produktion GmbH. Between the years 1986-1996, he worked at
Compaq Computer EMEA HQ, in Munich, performing various management functions in finance, controlling
and strategic planning for a geographic region with revenues of approx. USD 500 million. He was a
management member of the Business Development Group of Compaq and was actively involved in
pioneering various market entries, the roll-out of over 15 subsidiaries in Europe, Africa and the Middle East
and managing fast and high growth business expansion. From the early 90's he was a management member
of the Indeks group, responsible for development of the business in Central Eastern Europe. In a period
1996-2000 he was a freelance consultant working on business development and strategy projects for various
international IT vendors in Central Eastern Europe.
(h)
Hasan Tahsin Tuğrul – Title: Independent Board Member
After Hasan Tahsin Tuğrul completed his high school education in Pertevniyal High School. He graduated
from Istanbul Technical University, Department of Machine Engineering. He also achieved his High
Engineer diploma from the same University. He worked for Turkish Atom Energy Commission as Associate
and Group Manager between 1974-1977. He started working for Alarko-Alsim as Offer Engineer. In 1978,
he left Alarko-Alsim and switched to aluminum sector. He is the founder of ALTAS Aluminyum Sanayi ve
Ticaret A.Ş. He acts as a chairman of this company. He is shareholder and chairman of shareholder board of
Narpa Limited Şti and Kabin Sistemleri Limited Şti, board member of Indeks, Datagate and Despec
Bilgisayar Pazarlama AŞ. He is member of Kocaeli Chamber of Industry, Gebze Chamber of Trade, DEIKExternal Economic Relation Board, ITU Alumni Club, TMMOB Machine Engineers Chamber, Gebze
Rotary Club and Manning Foundation. He is still acting as assembly president of Kocaeli Chamber of
Industry, vice chairman of TOBB Council, board member of Tüsside, auditing board member of Tubitak
Teknokent A.Ş., credit assessment board member of KOSGEB, Enterpreneur Committee Member of TOSB,
board member of ITU Alumni Club, board member of ITU Ari Teknokent A.Ş., board member of ITU
Cultural A.Ş., board member of ITU 3M R&D and board member of Manning Foundation.
(i)
Sedat Sami Ömeroğlu – Title: Independent Board Member
Sedat Sami Ömeroğlu graduated from Yildiz Technical University in 1982, Department of Electric
Engineering. After graduation, he worked for two technology companies as technical service engineer and
executive manager. In 1995, he established his own company - Endüstriyel ve Bilimsel Test Teknolojileri,
Ar-Ge ve Ileri Otomasyon Mühendisliği San. ve Tic. A.Ş. (shortly E3TAM). He was one of the founders in
Industrial Automation Industrialists Association – ENOSAD. Sedat Sami Ömeroğlu is the fourth term
president of ENOSAD since May 2011.
There are three committees established by Indeks board of directors:
(a)
Auditing Committee,
(b)
Corporate Governance Committee and
148
(c)
Risk Detection Committee.
10.2
Supervisory and Administrative Bodies
year ended 31 December 2014 do not include any information regarding supervisory and administrative
bodies.
10.3
Corporate Governance
During the operation period 1 January – 31 December 2014 Indeks complied with and applied the Corporate
Governance Principles published by the Capital Markets Board. Some of these principles were adopted
immediately, and works continue to fulfil the deficiencies.
10.4
Auditing Committee
Auditing Committee of Indeks is composed of Sedat Sami Ömeroğlu and Hasan Tahsin Tuğrul. The
committee met 3 times in 2009. Auditing Committee of Indeks audited and inspected the accounting system
and financial data of Indeks, controlled whether the financial statements reflected the actual financial status,
and found out compliance to generally accepted accounting principles and financial legislation.
There are not independent members in the Indeks board of directors, therefore, the members of the
committee are not independent, either. Executive members of the Indeks board of directors are not members
of any committee. At the meeting of the Indeks board of directors held on 19 June 2012, it was resolved to
establish a Corporate Governance Committee, and to elect Sedat Sami Ömeroğlu, who is a board member in
Indeks, as the chairman of the committee, and Salih Baş and Ayşe İnci Bilecik, who are board members of
Indeks, as the members of the committee.
Risk Detection Committee was established under the decision no. 2013/13 of Indeks board meeting held on
13 July 2013. Sedat Sami Ömeroğlu was selected as chairman, Hasan Tahsin Tuğrul and Halil Duman were
selected as committee members.
10.5
Board of Directors Conflicts of Interests
year ended 31 December 2014 do not include any information regarding conflicts of interests of the
members of Indeks board of directors. However the abovementioned documents include the following
information:
(a)
Nevres Erol Bilecik, Atilla Kayalıoğlu, Halil Duman, who are in charge of execution and
Independent Board Members, Sedat Sami Ömeroğlu and Hasan Tahsin, get a remuneration;
(b)
Indeks did not lend any money, extend any credit, extend a personal credit through a third party, nor
provided any guarantees to or in favour of any member of the board of directors or any manager of
Indeks.
11.
The Major Shareholder
According to the Indeks consolidated financial statement for the year ended 31 December 2014, on 31
December 2014 the shareholders structure of Indeks was as follows:
Shareholder's name
Number of shares
Value of shares
Shares %
Nevres Erol Bilecik
20,120,551
20,120,551
35.93
149
Shareholder's name
Number of shares
Value of shares
Shares %
Pouliadis
S.A.
11,200,000
11,200,000
20.00
Public Shares
23,351,994
23,351,994
41.70
Other
1,327,455
1,327,455
2.37
TOTAL
56,000,000
56,000,000
100
and
Accociates
Indeks ultimate controlling individual shareholder is Nevres Erol Bilecik, who holds 20,120,551 shares,
representing 35.93% of the Indeks' share capital.
According to the information received from the Indeks, the current shareholders structure is as follows:
Shareholder's name
Number of shares
Shares %
Nevres Erol Bilecik
20,306,584
36.26
Alfanor 13131 AS
13,542,317
24.18
Open to the public
20,823,644
37.19
Other
1,327,455
2.37
TOTAL
56,000,000
100
12.
Financial Information Concerning the Indeks Assets and Liabilities, Financial Position and
Profits and Losses
12.1
Information about the basis for preparation of the financial statements of Indeks
The annual financial statement for the year ended 31 December 2014 has been prepared in accordance with
Turkish law, especially in accordance with the Turkish Accounting Standards published by the Public
Oversight Accounting and Auditing Standards Authority.
12.2
(a)
to 31 December 2013 (in TRY):
31.12.2014
31.12.2013
37,502,979
9,614,339
Profit for the period after income tax
29,751,447
3,987,958
Earnings per share for the annual period
0.449526
0.092651
29,921,394
23,134,609
150
(b)
(c)
31.12.2014
31.12.2013
Non-current assets
97,629,742
44,247,661
Current assets
962,107,748
709,617,243
Total assets
1,059,737,490
753,864,904
Shareholders' equity
171,923,298
145,128,161
Current liabilities
887,814,192
608,736,743
TOTAL LIABILITIES
1,059,737,490
753,864,904
Statement of Cash Flows
Statement of cash flow
31.12.2014
31.12.2013
Cash flow from operations
(25,383,676)
34,117,968
Net cash used in investment operations
(8,516,565)
(1,102,425)
Cash flow relating to financial activities
71,501,007
(9,459,619)
Net increase / decrease of cash and cash equivalents
37,600,766
23,555,924
Initial balance of cash and cash equivalents
74,357,827
50,801,903
Final balance of cash and cash equivalents
111,958,593
74,357,827
12.3
year ended 31 December 2014 do not include any information regarding any legal and arbitration
proceedings related to Indeks group.
12.4
Significant Change in the Indeks Financial or Trading Position
year ended 31 December 2014 do not include any information regarding significant change in the Indeks
financial or trading position.
13.
13.1
Share Capital
According to the Indeks consolidated financial statement for the year ended 31 December 2014, the share
capital of Indeks is TRY 56,000,000 and the Indeks' share capital consists of 56,000,000 shares of nominal
151
value 1 TRY each. Indeks' capital consists of A Group shares of a value of TRY 318.18 and B Group bearer
shares of a value of TRY 55,999,681.82. Shareholders of A Group shares have a right to appoint half plus
one of the Indeks' board members and a right to receive 5% of the profit remaining after the initial dividend
from the distribution of profit.
The upper limit of authorised capital of Indeks was determined as TRY 75,000,000.
Indeks accepted the registered share capital system which determined the registered share capital raise from
TRY 75,000,000 to TRY 150,000,000 in the period of 2014-2018. The decision of the meeting of
shareholders of the Indeks group in the abovementioned respect was made on 9 March 2014.
According to the Indeks operation report for the year ended 31 December 2014, Indeks articles of association
do not limit the transfer of Indeks shares.
Indeks dividend distribution policy's general assumption is to make distributions (in cash and/or in bonus
share) provided that the minimum amounts stipulated by the Capital Market legislation are observed,
considering long-term growth and strategies, investments and fund requirements, profitability and the
expectations of shareholders, excluding the special conditions required by extraordinary conditions in the
economic conditions.
13.2
year ended 31 December 2014 do not include any information regarding Indeks foundation documents or its
articles of association.
14.
Material Contracts
year ended 31 December 2014 do not determine if there are any material contracts concluded by Indeks or its
capital group member within the meaning of Regulation 809/2004.
15.
Third Party Information and Statement by Experts and Declarations of any Interest
acting as an expert.
Certain data stated herein come from third parties. Such data have been accurately replicated and to the
extent, in which such data could be obtained from information published by a third party. No facts have been
omitted, which would render the abovementioned data inaccurate or misleading.
Auditor's opinion on financial statement of Indeks for the period from 1 January 2013 to 31 December 2013
has been prepared by the:
Audit firm:
Registered office:
Merkez Ofis: Beybi Giz Plaza, Dereboyu Coddesi Meydan Sokak No: 1 Kat: 19
34398 Maslak/Istanbul
Responsible person:
Dr. Hakki Dede
Auditor's opinion on financial statement of Indeks for the period from 1 January 2014 to 31 December 2014
has been prepared by the:
Audit firm:
152
Registered office:
Merkez Ofis: Spine Tower Buyukdere Cad. 59, Sok. No: 243 Kat: 25-26
Maslak 34398Sanyer/Istanbul, Turkey
Responsible person:
Dr. Hakki Dede
16.
The audited financial statements of Indeks and auditor's opinions thereof are available on the Indeks website
www.index.com.tr.
153
TAXATION
1.
Taxation in Poland
The information included in this chapter is presented as general information for analysis of the tax situation
and was obtained from publicly available sources. The Issuer or its advisers make no representations
as to the accuracy or completeness of the information included herein. Any prospective purchasers of the
Bonds should therefore not rely upon the information included herein and are advised to consult their own
legal and tax advisers as to all tax aspects of the purchase, sale and holding of the Bonds as well as receipt
of payments of interest related to the Bonds in compliance with the tax legislation effective in Poland and
in the country of which they are residents as well as in countries where the proceeds of holding and the sale
of the Bonds may be subject to taxation.
The following general summary of taxation of Bonds draws mainly upon the Corporate Income Tax Act4
of 15 February 1992 (the CIT Law) and Personal Income Tax Act of 26 July 19915(the PIT Law) and any
applicable rules and regulations in force as of the date of this Prospectus, as well as arising out of the
general interpretation of those acts and other legislation enforced by the Polish authorities and other public
administration bodies and known to the Issuer as of the date of this Prospectus. All information below
is subject to change based on amendments to the applicable legislation that may take place after that date.
As interpretation of the laws refers to the position as at the date of this Prospectus, it may thus be subject
to change including a change with retroactive effect. The information provided below does not cover tax
consequences concerning income tax exemptions applicable to specific taxable items or specific taxpayers
(eg domestic or foreign investment funds).
The reference to "interest" as well as to any other terms in the paragraphs below means "interest" or any
other term as understood in Polish tax law.
Polish tax laws provide for different regimes depending on the status of particular taxpayers. In this respect,
different treatment may be applied with regard to:
1.1
Income received by individuals residing in Poland for tax purposes
Individuals may earn profits on (i) disposal of Bonds or (ii) interest/discount corresponding to the Bonds.
(a)
Taxation of income earned on disposal of Bonds
Where a Polish individual tax resident (a person who has his/her centre of personal or business interests
located in Poland or who stays in Poland for longer than 183 days in a year) disposes Bonds, the income
he/she earns from the disposal is subject to PIT in Poland under art. 30b of the PIT Law. The income is
calculated as a difference between the remuneration received upon disposal of Bonds and the expenses
corresponding to the purchase or acquisition of the Bonds. The income earned on disposal is subject to PIT
at 19%. In principle, this income should be settled by the taxpayer by 30 April of the year following the year
in which the income was earned (Art. 30b sec. 6 of the PIT Law). No tax or tax advances should be withheld
by the person making the payments.
Under art. 39 sec. 3 of the PIT Law, individuals engaged in the regular business activity, corporations and
organizations not being legal entities, should report the income earned on sale of Bonds by the individuals
(specific forms are required).
4
5
Corporate Income Tax Act of 15 February 1992 (consolidated version: Journal of Laws of 2014item 851 as amended).
Personal Income Tax Act 26 July 1991 (consolidated version: Journal of Laws of 2012, item 361 as amended).
154
(b)
Taxation of the received interest or discount
Under art. 17 sec. 1 point 3 of the PIT Law, interest (discount) received from Bonds is qualified as capital
income. According to Art. 30a sec. 1 point 2 and sec. 7 of the PIT Act, interest income, including discounts,
derived by a Polish tax resident individual (as defined above) does not cumulate with general income subject
to the progressive tax rate but is subject to a 19 per cent. flat-rate tax.
Under Art. 41.4 of the PIT Law, the interest payer, other than an individual not acting within the scope of
his/her business activity, should withhold 19 per cent. Polish tax on any interest payment. Under Art. 41.4d
of the PIT Law, tax on interest or a discount on securities is withheld by entities keeping securities accounts
for taxpayers, in their capacity as tax remitters, if the income (revenue) is earned in the territory of Poland
and is associated with the securities registered in these accounts and, further, if relevant payments are made
to the taxpayers through those entities. According to Art. 45.3b of the PIT Law, if the tax is not withheld, the
individual is obliged to settle the tax himself/herself by 30 April of the following year.
Tax on interest regarding the securities kept in the Polish omnibus accounts is withheld by entities keeping
the omnibus accounts through which the amounts due are paid. The tax is withheld on the day the amounts
due are put at the disposal of the omnibus account holder (Art. 41.10 of the PIT Law). Additionally, under
Art. 30a.2a of the PIT Law, with respect to income (revenue) from interest transferred to taxpayers holding
rights attached to securities (including Bonds) registered in Polish omnibus accounts whose identity has not
been revealed to the tax remitter in accordance with the Act on Trading in Financial Instruments, a 19 per
cent. flat-rate tax is withheld by the tax remitter from the aggregate income (revenue) released for the benefit
of all such taxpayers through the omnibus account holder. The tax is withheld on the date that an interest or
discount payment is released to the omnibus account.
Under Art. 45.3c of the PIT Law, taxpayers are obliged to disclose the amount of interest (discount) on
securities (including Bonds) in the annual tax return if Bonds were registered in an omnibus account and the
taxpayer's identity was not revealed to the tax remitter.
1.2
Income earned by non-resident individuals in Poland
(a)
Non-resident individuals (ie natural persons if they do not have their place of residence in the territory of the
Republic of Poland), are subject to the domestic tax regime as regards the income earned in Poland, unless
the relevant double tax treaty provides otherwise. However, income from a disposal of Bonds may also be
classified as income earned form activities on the stock exchange, subject to taxation where the stock
exchange is located. Individuals should consult their tax advisors regarding the proper classification of this
income in their individual cases.
For example under regulations included in the Poland-Czech Republic Double Tax Treaty6, income earned
on disposal of Bonds should be treated as capital gains under Article 14. Under this regime, individuals
residing in the Czech Republic for tax purposes should be generally taxed in the Czech Republic with respect
to the capital gains earned from disposal of the Bonds.
Individuals running regular business, corporations and organisational units not being legal entities should
report the income earned by the individuals upon disposal of Bonds to the Tax Office being relevant for nonresidents by the end of February. Upon written request of the individual (filed with regard to the intention of
leaving Poland), the entities mentioned above should prepare the report within 14 days from the request and
send it to the Tax Office and the individual (art. 39 sec. 3 and 4 of the PIT Law). The information should be
sent or delivered to the individual earning income on the disposal of Bonds and the relevant Tax Office.
6
Agreement between the Republic of Poland and the Czech Republic for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on
income (Journal of Laws of 2012, item 991.
155
(b)
Under art. 17 sec. 1 point 3 of the PIT Law, the interest (discount) received from Bonds should be deemed as
capital income. According to Art. 30a sec. 1 point 2 and sec. 7 of the PIT Act, interest income, including
discounts, derived by individual is subject to a 19 per cent. flat-rate tax. This regime applies unless the
relevant double tax treaty provides otherwise.
Under Art. 41.4 of the PIT Act, the interest payer, other than an individual not acting within the scope of
his/her business activity, should withhold 19 per cent. Polish tax on any interest payment. Under Art. 41.4d
of the PIT Act, tax on interest or a discount on securities is withheld by entities keeping securities accounts
for taxpayers, in their capacity as tax remitters, if the income (revenue) is earned in the territory of Poland
and is associated with the securities registered in these accounts and, further, if relevant payments are made
to the taxpayers through those entities. Tax on interest regarding the securities kept in the Polish omnibus
accounts is withheld by entities keeping the omnibus accounts through which the amounts due are paid. The
tax is withheld on the day the amounts due are put at the disposal of the omnibus account holder (Art. 41.10
of the PIT Law).
If the identity of the omnibus account participant is not disclosed, the obligation to withhold the withholding
tax stays with the entity keeping the omnibus account. The tax is withheld from the aggregate income
(revenue) released for the benefit of all such taxpayers through the omnibus account holder.
The remitter may apply a reduced PIT rate resulting from the applicable double tax treaty if the tax residency
of the individual earning profits on interest/discount is confirmed by the certificate issued by the relevant
authorities of the states where the individual resides. Under the Poland-Czech Republic Double Tax Treaty,
the withholding tax rate amounts generally to 5% provided that the recipient of interest is its beneficial
owner.
Within the first month following the remitter's financial year, the remitter should report the revenue received
by the individual upon interest/discount to the individual if he/she resides for tax purposes in (i) the EU/EEA
member state (other than Poland), (ii) states associated or areas dependent to the United Kingdom or the
Netherland, which concluded double tax treaties in Poland covering savings of individuals and to the Tax
Office relevant for non-residents (art. 42c sec. 1,2 and 5 of the PIT Law).
With respect to the revenue earned by the remaining individuals, until the end of February of the year
following the year of payment, the remitter should report the revenue received by the individual upon
interest/discount to the Tax Office relevant to non-residents. Upon written request of the individual, the
remitter should report within 14 days to the individual and the Tax Office (under both scenarios a specific
form is required).Interest received by a non-resident via a Poland-based permanent establishment is subject
to the regime applicable to residents.
1.3
Income earned by corporate income taxpayers resident in Poland for tax purposes
(a)
Any income earned by corporate income taxpayers being resident in Poland for tax purposes (i.e. a corporate
income taxpayer having its registered office or place of management in Poland) upon disposal of Bonds are
subject to the general corporate income tax (CIT) at 19%. Expenditures incurred in connection with the
purchase of the Bonds are tax deductible at the moment the Bonds are being disposed (art. 16 sec. 1 point 8
of the CIT Law).
(b)
Interest/discount received by corporate income taxpayers being resident in Poland is aggregated with other
income derived from business operations conducted by the taxpayer and is subject to CIT at 19%.
156
1.4
Income earned by non-resident corporate income taxpayers in Poland
(a)
Corporate income taxpayers not being resident in Poland (i.e. corporate income taxpayers which do not have
their registered office or place of management in Poland) earning income from disposal of Bonds are subject
to corporate income tax (CIT) in Poland at 19% rate unless a double tax treaty states otherwise. However,
income from a disposal of Bonds may also be classified as income earned form activities on the stock
exchange, subject to taxation where the stock exchange is located. Individuals should consult their tax
advisors regarding the proper classification of this income in their individual cases.
Under specific regulations included in the Poland-Czech Republic Double Tax Treaty, income earned on
disposal of Bonds should be treated as capital gains under Article 14. Under this regime, companies residing
in the Czech Republic for tax purposes should be generally taxed in the Czech Republic with respect to the
capital gains earned from disposal of the Bonds.
(b)
Corporate income taxpayers not being resident in Poland ( earning interest/discount in Poland are subject to
20% withholding tax (art. 21 sec. 1 point 1 of the CIT Law), unless the relevant double tax treaty states
otherwise. Under Art. 26 sec. 1 of the CIT Law, a tax on interest is remitted by the entity making the
payment under the above mentioned titles. Thus, the person paying interest, as remitter, is responsible for
withholding the appropriate tax and depositing it in the bank account of the relevant tax authority, if such tax
is due. However, tax on interest from securities held in securities accounts or omnibus accounts is withheld
by the entities keeping the securities accounts or omnibus accounts, as applicable, and, further, if the relevant
payments are made to the taxpayers through those entities (Art. 26 sec 2c point 1 of the CIT Law). Tax on
interest from securities registered in omnibus accounts whose identity has not been revealed to the tax
remitter in accordance with the Act on Trading in Financial Instruments, a 20% flat-rate tax is withheld by
the tax remitter from the aggregate income (revenue) released for the benefit of all such taxpayers through
the omnibus account holder. The tax is withheld on the date on the day the amounts due are put at the
disposal of the omnibus account holder (Art. 26.2b of the CIT Act).
A remitter paying the interest/discount should withhold the amount of tax due corresponding to the payments
and transfer it to the Tax Office relevant to non-residents until the 7th day of the month following the month
of payment (art. 26 sec. 1 of the CIT Law ad art. 26 sec. 3 of the CIT Law).
Remitters may withhold the tax according to reduced rates resulting from double tax treaties if the tax
residence of payment recipient is confirmed by a tax residency certificate. For example, under the PolandCzech Republic Double Tax Treaty, the withholding tax rate amounts generally to 5% provided that the
recipient of interest is the beneficial owner.
Reduced rate/exemption under art. 21 of the CIT Law may be applied only if the payment recipients provide
written statement confirming that the conditions allowing for exemption has been met. A tax residency
certificate is also required.
Within three months following the close of the remitter's financial year, the remitter should report the
amount of income received by non-resident corporate income taxpayers to the payment recipient and the
relevant Tax Office. Upon a written request by the payment recipient, the remitter should prepare a report
within 14 days and send it to the recipient and the Tax Office (art. 26 sec. 3a and 3b of the CIT Law). Under
both scenarios, special forms are required. Interest received by non-resident via a Poland-based permanent
establishment is subject to the regime applicable to residents.
157
Polish tax on civil law transactions
Art. 1 sec. 1 point 1 letter a of the Civil Law Activities Act7 (the CLAT Act), agreements for the sale and
exchange of assets and property rights are subject to tax on civil law transactions. These transactions are
taxable if their subjects are:

assets located in Poland or property rights exercisable in Poland, irrespective of the place of the
transaction or the place of residence or the registered office of the purchaser;

assets located abroad or property rights exercisable abroad if the purchaser's place of residence
or registered office is located in Poland and the civil law transaction was carried out in Poland.
Under art. 7 sec. 1 point 1b and art. 6 sec. 1 point 1of the CLAT act sale of ownership over Bonds is subject
to 1% CLAT at the market value of Bonds being sold. The tax on sale of the securities is payable by the
purchaser while the tax on exchange of securities is paid jointly and severally by the parties, unless the
agreement is in the form of a notary deed. In such a caser the tax is withheld and remitted by the notary
public.
However, under art. 9 sec. 9 of the CLAT Law, a sale of property rights being financial instruments:
(i) to investment firms or foreign investment firms, (ii) made with the intermediation of investment firms
or foreign investment firms; (iii) made through organised trading, (iv) made outside organised trading
by investment firms or foreign investment firms provided that the property rights were acquired by those
firms through organised trading, as defined in the Act on Trading in Financial Instruments8, is exempt from
tax.
2.
Taxation in the Czech Republic
The information set out below is of a general nature and relates only to certain principal Czech withholding
tax considerations. It does not deal with any other Czech tax consequences of acquiring, holding
or disposing of the Bonds and is not intended to be, nor should they be regarded as, legal or tax advice.
Prospective holders of the Bonds should seek, in the light of their individual situation, their own professional
advice as to the consequences of acquiring, holding or disposing of the Bonds in all relevant jurisdictions.
The information is based on the tax laws of the Czech Republic as in effect on the date of this Prospectus and
their prevailing interpretations available on or before such date. All of the foregoing is subject to change,
which could apply retroactively and could affect the continued validity of this summary.
For the purposes of this information, it has been assumed that neither the Issuer nor the Guarantor is either
resident for tax purposes or has a permanent establishment in the Czech Republic.
2.1
Withholding tax
Save as otherwise provided below, all interest and other payments to be made by an Issuer or a Guarantor
under the Bonds may be made free of withholding on account of any taxes imposed by the Czech Republic.
Nevertheless, Czech withholding tax may apply upon exercise or redemption of physically settled Bonds.
2.2
Securing tax
In general, Czech tax residents (or Czech permanent establishments of Czech tax non-residents) acquiring
the Bonds are required, under their own responsibility, to withhold and to remit to Czech tax authorities
a 1 per cent. securing tax from the purchase price when purchasing investment instruments, such as the
Bonds, from a seller who is resident for tax purposes outside the European Union or the European Economic
Area. Such obligation can be eliminated under a tax treaty concluded between the Czech Republic and the
7
8
Civil law activities tax law of 9 September 2000 (consolidated version: Journal of Laws of 2015, item 626 as amended).
Act on trading in financial instruments of 29 July 2005 (consolidated version: Journal of Laws of 2014, item 94 as amended).
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country in which the seller is a tax resident. Furthermore, it can be waived in advance based on a decision
of Czech tax authorities.
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ENFORCEMENT OF CIVIL LIABILITIES AGAINST THE ISSUER, THE GUARANTOR AND
THE SECURITY PROVIDER
The information included in this chapter is presented as general information for analysis of legal situation
and was obtained from publicly available sources. The Issuer, the Guarantor, or their advisers make
no representation as to the accuracy or completeness of the information included herein. Therefore,
any prospective purchasers of the Bonds should not rely upon the information included herein and are
recommended to contact their legal advisers for consultation about the enforcement of claims in respect
of the 'Issuer's or the Guarantor's private law liabilities within any relevant jurisdiction.
It may not be possible for the purchasers of the Bonds to bring a claim or to effect any process against the
Issuer or the Guarantor abroad or to enforce judgments against the Issuer or the Guarantor before any
foreign courts or to enforce judgments obtained in such courts based upon foreign laws.
1.
Enforcement Against the Issuer (in Poland)
Please note that the information presented below is based on the assumption that the Parallel Debt
construction, referred to in Clause 4.4 (Parallel Debt) of the Terms and Conditions is validly established and
created under applicable law provisions.
The Issuer is an entity established and operating in accordance with Polish law.
Article 15 of the Terms and Conditions provides that any dispute between the Issuer and the Bondholders
arising out of or in connection with the Bonds, the Guarantee or these Terms and Conditions shall be finally
resolved by the Municipal Court in Prague. This provision shall constitute an agreement conferring
jurisdiction within the meaning of Regulation (EU) No 1215/2012 of the European Parliament and of the
Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters (Regulation 1215/2012). According to Article 25(1) of the Regulation 1215/2012, if the
parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have
jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal
relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its
substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the
parties have agreed otherwise. It is assumed that prorogation of jurisdiction provided by the Terms and
Conditions is valid and has full legal force under the laws of the Czech Republic and the Regulation
1215/2012.
According to Article 41(1) of the Regulation 1215/2012, subject to the provisions of Section 2
(Enforcement) in Chapter III of the Regulation 1215/2012 (Articles 39-44), the procedure for the
enforcement of judgments given in another Member State (the Czech Republic in this instance) shall be
governed by the law of the Member State addressed (the Republic of Poland). A judgment given in a
Member State which is enforceable in the Member State addressed shall be enforced there under the same
conditions as a judgment given in the Member State addressed. Under no circumstances may a judgment
given in a Member State be reviewed as to its substance in the Member State addressed. The Regulation
1215/2012 stipulates in particular that a judgment given in a Member State which is enforceable in that
Member State shall be enforceable in the other Member States without any declaration of enforceability
being required. An enforceable judgment shall carry with it by operation of law the power to proceed to any
protective measures which exist under the law of the Member State addressed. The party seeking the
enforcement of a judgment given in another Member State shall not be required to have a postal address in
the Member State addressed. Nor shall that party be required to have an authorised representative in the
Member State addressed unless such a representative is mandatory irrespective of the nationality or the
domicile of the parties. No security, bond or deposit, however described, shall be required of a party who in
one Member State applies for the enforcement of a judgment given in another Member State on the ground
that he is a foreign national or that he is not domiciled or resident in the Member State addressed.
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For the purposes of enforcement in a Member State of a judgment given in another Member State, the
applicant shall provide the competent enforcement authority with: (a) a copy of the judgment which satisfies
the conditions necessary to establish its authenticity; and (b) the certificate issued pursuant to Article 53 of
the Regulation 1215/2012, certifying that the judgment is enforceable and containing an extract of the
judgment as well as, where appropriate, relevant information on the recoverable costs of the proceedings and
the calculation of interest. Article 53 of the Regulation 1215/2012 provides that the court of origin shall, at
the request of any interested party, issue the certificate using the form set out in Annex I to the Regulation
1215/2012.
The competent enforcement authority may, where necessary, require the applicant to provide, in accordance
with Article 57 of the Regulation 1215/2012, a translation or a transliteration of the contents of the
certificate. The competent enforcement authority may require the applicant to provide a translation of the
judgment only if it is unable to proceed without such a translation. When a translation or a transliteration is
required under the Regulation 1215/2012, such translation or transliteration shall be into the official
language of the Member State concerned or, where there are several official languages in that Member State,
into the official language or one of the official languages of court proceedings of the place where a judgment
given in another Member State is invoked or an application is made, in accordance with the law of that
Member State. For the purposes of the forms referred to in Articles 53 and 60 of the Regulation 1215/2012,
translations or transliterations may also be into any other official language or languages of the institutions of
the Union that the Member State concerned has indicated it can accept. Any translation made under the
Regulation 1215/2012 shall be done by a person qualified to do translations in one of the Member States.
In cases and on the terms and conditions set out in the Regulation (EC) No 1896/2006 of the European
Parliament and of the Council of 12 December 2006 creating a European order for payment procedure
(“Regulation 1896/2006”) the Bondholder – in order to enforce a due and payable pecuniary claim under the
Bonds against the Issuer – may submit an application for a European order for payment against the Issuer
and the court might issue such a European order for payment. The Regulation 1896/2006 stipulates in
particular that a European order for payment which has become enforceable in the Member State of origin
(the Czech Republic in this instance) shall be recognised and enforced in the other Member States without
the need for a declaration of enforceability and without any possibility of opposing its recognition. Without
prejudice to the provisions of the Regulation 1896/2006, enforcement procedures shall be governed by the
law of the Member State of enforcement (the Republic of Poland). A European order for payment which has
become enforceable shall be enforced under the same conditions as an enforceable decision issued in the
Member State of enforcement. For enforcement in another Member State, the claimant shall provide the
competent enforcement authorities of that Member State with: (a) a copy of the European order for payment,
as declared enforceable by the court of origin, which satisfies the conditions necessary to establish its
authenticity; and (b) where necessary, a translation of the European order for payment into the official
language of the Member State of enforcement or, if there are several official languages in that Member State,
the official language or one of the official languages of court proceedings of the place where enforcement is
sought, in conformity with the law of that Member State, or into another language that the Member State of
enforcement has indicated it can accept. Each Member State may indicate the official language or languages
of the institutions of the European Union other than its own which it can accept for the European order for
payment. The translation shall be certified by a person qualified to do so in one of the Member States.
In cases and on the terms and conditions set out in the Regulation (EC) No 805/2004 of the European
Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested
claims (Regulation 805/2004) the Bondholder – holding a relevant judgment against the Issuer on an
uncontested claim within the meaning of Regulation 805/2004 – may obtain certification as a European
Enforcement Order. The Regulation 805/2004 stipulates in particular that a judgment which has been
certified as a European Enforcement Order in the Member State of origin (the Czech Republic in this
instance) shall be recognised and enforced in the other Member States without the need for a declaration of
enforceability and without any possibility of opposing its recognition. Without prejudice to the provisions of
the Chapter IV of the Regulation 805/2004, the enforcement procedures shall be governed by the law of the
Member State of enforcement (the Republic of Poland). A judgment certified as a European Enforcement
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Order shall be enforced under the same conditions as a judgment handed down in the Member State of
enforcement. The creditor shall be required to provide the competent enforcement authorities of the Member
State of enforcement with: (a) a copy of the judgment which satisfies the conditions necessary to establish its
authenticity; and (b) a copy of the European Enforcement Order certificate which satisfies the conditions
necessary to establish its authenticity; and (c) where necessary, a transcription of the European Enforcement
Order certificate or a translation thereof into the official language of the Member State of enforcement or, if
there are several official languages in that Member State, the official language or one of the official
languages of court proceedings of the place where enforcement is sought, in conformity with the law of that
Member State, or into another language that the Member State of enforcement has indicated it can accept.
Each Member State may indicate the official language or languages of the institutions of the European
Community other than its own which it can accept for the completion of the certificate. The translation shall
be certified by a person qualified to do so in one of the Member States.
The civil procedure in the Republic of Poland, including the enforcement proceedings, is mainly governed
by the Code of Civil Procedure. The Code of Civil Procedure contains in particular provisions governing the
recognition and enforcement of certain judgments given by courts in EU Member States as well as
settlements and authentic instruments from those EU Member States (Article 1153(13) - Article 1153(25) of
the Code of Civil Procedure). According to Article 11104 §1 of the Code of Civil Procedure, enforcement
cases are subject to the exclusive national jurisdiction, if enforcement is to be initiated or is carried out in the
Republic of Poland.
Pursuant to Article 1153(14) items 1-3 of the Code of Civil Procedure, enforcement titles in the Republic of
Poland are, in particular, the following:
(i)
judgments given by courts in EU Member States as well as settlements and authentic
instruments from those States, covered by the scope of application of Regulation 1215/2012,
if they may be performed by way of enforcement;
(ii)
judgments given by courts in EU Member States as well as settlements and authentic
instruments from those States, certified as a European Enforcement Order in those States
(that is covered by the scope of application of Regulation 805/20064);
(iii)
European orders for payment given by courts in EU Member states, the enforceability of
which has been found in those States pursuant to the provisions of Regulation 1896/2006.
Subject to the requirements laid down by the provisions of Regulation 1215/2012, Regulation 1896/2006 and
Regulation 805/2004, the enforcement titles listed above serve as a basis for the initiation of enforcement.
Enforcement cases fall within the competence of district courts and court enforcement officers acting at such
courts. Enforcement activities are performed by court enforcement officers, except for activities which are
reserved for courts. A request to initiate enforcement is submitted, depending on competence, to a court or a
court enforcement officer (in principle the Bondholder intending to initiate enforcement against the Issuer
should submit a request to initiate enforcement to a court enforcement officer). The request should indicate
the performance to be satisfied and the way of enforcement. The request or demand should be enclosed with
documents required by the provisions of law (both Polish and European), in particular the original
enforcement title.
Please note that the description below does not include does not include specification of the enforcement
procedure in case the declaration of the Issuer's bankruptcy (bankruptcy liquidation or bankruptcy
arrangement) is issued, the Issuer's insolvency proceedings is initiated. Any risks related or issues related to
the entry into force of the Polish Restructuring Law (which took place on 1 January 2016) are beyond the
scope of the information presented above.
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2.
Enforcement Against the Issuer as a Security Provider (in Poland)
The Initial Polish Pledge agreement will be executed before the Issue Date for the benefit of the Security
Agent to secure the claims or rights of the Security Agent, whether present or future, actual or contingent
against the Pledgor for payment of any amount to the Pledgee, under or in connection with Clause 4.4
(Parallel Debt) of the Terms and Conditions (the Secured Obligations or Claim). The object of the Initial
Polish Pledge consists of the Initial Polish Pledged Shares. The Initial Polish Pledge will be established over
at least 6 million Initial Polish Pledged Shares and will secure the Claim up to CZK 1,053,000,000.
As set out in the Initial Polish Pledge agreement, if the market value of the Initial Polish Pledged Shares and
any other Security exceeds 150% of the outstanding principal amount of the Bonds, the Security Agent shall
release from the Initial Polish Pledge (or the Additional Polish Pledge) such number of the Polish Pledged
Shares which will ensure that the total market value of the Security determined in accordance with the Terms
and Conditions shall be as close as possible to 115% of the outstanding principal amount of the Bonds.
Pursuant to the Initial Polish Pledge agreement, if the Secured Obligations have become due and payable, the
Security Agent will be able to seek satisfaction from the Initial Polish Pledge at its own choice, in one of the
following manners:
(i)
under court enforcement proceedings,
(ii)
through take-over of the ownership title to the Initial Polish Pledged Shares, in accordance
with Article 22 of the Registered Pledge Act.
The value of the Initial Polish Pledged Shares to which the ownership will be taken over by the Security
Agent will be determined in accordance with the provisions of Article 23 of the Registered Pledge Act (the
Seizure Value).
As of the date when the ownership title to the Initial Polish Pledged Shares will be taken over, the Secured
Obligations which are due and payable shall expire up to the amount of the Seizure Value.
The Security Agent shall have the right to take-over the ownership title to such number of the Initial Polish
Pledged Shares which, after multiplying it by the value of such shares calculated on the basis of the opening
price at the date on which the Security Agent makes a statement on taking-over the ownership title to the
Initial Polish Pledged Shares increased by 3.5% corresponds to the value of the Secured Obligation due and
payable on the abovementioned date.
If the Seizure Value of the Initial Polish Pledged Shares to which the ownership title has been taken over by
the Security Agent is lower than the value of the Secured Obligation due and payable on the date on which
the Security Agent makes a statement on taking-over the ownership title to the Initial Polish Pledged Shares,
the Initial Polish Pledge will remain in force in respect of such Initial Polish Pledged Shares which have not
been taken-over the by the Security Agent (if there are any) until the Secured Obligations are fully
discharged.
All pecuniary benefits (including but not limited to dividend or advance towards dividend payment) from the
Initial Polish Pledged Shares taken-over and collected by the Security Agent after taking-over the ownership
title shall be applied on account of the Secured Obligations (i.e. reduce the value of Secured Obligations).
On the basis set out in the Initial Polish Pledge agreement, the Issuer is entitled to acquire the Initial Polish
Pledged Shares to which the ownership title has been taken-over by the Security Agent.
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If the proceeds of enforcement (other than court enforcement) received by the Security Agent are
denominated in a different currency than the Secured Obligations, the Security Agent may exchange the
proceeds of enforcement into the currency of the Secured Obligations at the exchange rate for the purchase
of a currency of the Secured Obligations quoted by the Security Agent, or if the Security Agent does not
quote that exchange rate, at the exchange rate for the sale of a currency of the Secured Obligations quoted by
any source it reasonably selects on the earlier of:
(i)
the day it makes the currency exchange; and
(ii)
the date falling 5 (five) Business Days after receipt of the enforcement proceeds.
The Initial Polish Pledge expires:
(i)
upon expiration of the Security Obligations; or
(ii)
on the date, on which the Initial Polish Pledge is crossed out from the pledge register in
connection with the Security Agent's consent granted in writing, or otherwise being null and
void
whichever occurs the first.
The Initial Polish Pledge agreement is governed by the laws of Poland. Any disputes arising from or
connected with the Initial Polish Pledge agreement, including any disputes related to its validity, will be
settled by a common court of law competent by venue for the Issuer's registered office.
Pursuant to the provisions of the Registered Pledge Act, a claim secured by a registered pledge is subject to
satisfaction from the object of pledge with priority before other claims, subject to the cases stipulated
otherwise by law. A general principle under the provisions of the Polish civil code is that, if the same thing is
encumbered with several limited property rights, the property right which came into existence later may not
be exercised to the detriment of the right which came into existence earlier. Moreover, in accordance with
the provisions of the Registered Pledge Act, a limited property right which came into existence later may not
be exercised to the detriment of a registered pledge which was established earlier. If, on the other hand, the
same object is encumbered with more than one registered pledge, the priority of such pledges is decided by
the date on which the motion for entering the pledge into the pledge register is filed. The date on which such
motion is filed is considered to be the date of the motion's receipt by the court keeping the pledge register.
Motions received on the same date are considered to have been filed simultaneously.
2.1
Court enforcement proceedings
Security Agent's satisfaction from the object of registered pledge takes place in the course of court
enforcement proceedings or through take-over of the ownership title to the Initial Polish Pledged Shares.
The rules of court proceedings, including enforcement proceedings, in Poland are regulated in the Polish
code of civil procedure. In order to initiate enforcement against the Issuer from the object of the pledge, the
Security Agent should bring action for payment before a competent court and obtain a final and
unappealable judgment admitting such action, meaning a judgment awarding a specified sum of money to
the Security Agent from the Issuer. In the judgment admitting the abovementioned action, the court should
make a reservation that, in the course of the enforcement proceedings, the Issuer has the right to invoke the
limitation of liability to the object of the pledge. Upon obtaining a final and unappealable judgment
admitting the action, the Security Agent should apply for appending an enforcement clause to the judgment.
The basis for enforcement is a writ of execution. The enforcement clause included in the writ of execution
makes it possible to carry out enforcement, and the granting of such clause means that the court has
recognized the lawfulness of the writ of execution. Court enforcement proceedings are initiated at the
creditor's request.
164
Enforcement cases fall within the competence of district courts and court enforcement officers acting at such
courts A request to initiate enforcement is submitted, depending on competence, to a court or a court
enforcement officer (in principle the Bondholder intending to initiate enforcement against the Issuer should
submit a request to initiate enforcement to a court enforcement officer). The request should indicate the
performance to be satisfied and the way of enforcement. The request should be enclosed with the (original)
enforcement title and other documents required by the provisions of law.
The Polish law also regulates “enforcement privileges”. Such privileges determine the priority of competing
claims (creditors) when satisfaction (usually enforcement) from a claim is directed to one object of pledge or
the entire debtor's estate, as, for example, Article 20 of the Registered Pledge Act, pursuant to which, a claim
secured by a registered pledge is subject to enforcement with priority over other claims, unless a special
regulation provides otherwise.
In view of the foregoing, we should point out the provision of Article 1025, §1 of the Polish code of civil
procedure, pursuant to which the amount obtained from enforcement is used, in principle, in the following
order of priority, to satisfy:
(i)
enforcement costs;
(ii)
alimony dues;
(iii)
amounts due for work for a period of three months up to the amount of the lowest pay for
work, as specified in separate provisions, as well as compensation pensions for causing a
disease, inability to work, disability or death and costs of an ordinary funeral of the debtor;
(iv)
amounts due secured by a maritime mortgage or a sea-ship privilege;
(v)
amounts due secured by a mortgage, pledge, registered pledge and a tax lien or enjoying the
statutory priority, and the rights which had encumbered the real property before the entry
was made in the land and mortgage resister on the initiation of enforcement or before the
motion for making such entry was put into the file;
(vi)
amounts due for work which were not satisfied third;
(vii)
amounts due covered by the provisions of Section III of the Polish ordinance tax act of 29
August 1997 (Dz. U. 2012.749, as amended), if not satisfied fifth;
(viii)
amounts due to the creditors who conducted the enforcement;
(ix)
other dues.
This description is subject to enforcement procedure upon declaration of the Issuer's insolvency (bankruptcy
liquidation or bankruptcy arrangement)'. Any risks related or issues related to the entry into force of the
Polish restructuring law (which took place on 1 January 2016) are beyond the scope of the information
presented above.
2.2
Take-over of the ownership title to the Initial Polish Pledged Shares
According with Article 22 sec. 1 of the Register Pledge Act, it is possible to seek satisfaction from the Initial
Polish Pledge through taking possession of the Initial Polish Pledged Shares, which are financial instruments
recorded on the security account. After the written notice to the pledgor, pledgee makes a unilateral
declaration of will of taking possession of the Initial Polish Pledged Shares to the brokerage. Taking
possession of the Initial Polish Pledged Shares occurs on a day, when the Initial Polish Pledged Shares will
be recorded on the security account of the pledgee. The value of the Initial Polish Pledged Shares is
determined at the quotation rate as of the end of the day of taking possession of such shares. If on this day,
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the Initial Polish Pledged Shares are not quoted, the value of shares is determined at the quotation rate as of
the end of the last quotation day. According to Article 21a of the Register Pledge Act, following the seizure
of the object of registered pledge by a court enforcement officer or other enforcement authority, the pledgee
may not take any actions aimed at satisfaction pursuant to the provisions of Articles 22 to 27 of the said Act,
and so in particular it may not take over the ownership title to the object of registered pledge.
3.
Enforcement against the Guarantor (in Poland)
The Guarantor is an entity established and operating in accordance with Polish law.
The Guarantee provides that in the event of any dispute in connection with this Guarantee, including in
matters related to its existence, validity or termination, the dispute will be submitted to, and finally settled by
(i) the District Court for Prague 1, if the first-instance court having subject matter jurisdiction is a district
court, or (ii) the Municipal Court in Prague, if the first-instance court having subject matter jurisdiction is a
regional court. This provision shall constitute an agreement conferring jurisdiction within the meaning of the
Regulation 1215/2012. According to Article 25(1) of the Regulation 1215/2012, if the parties, regardless of
their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any
disputes which have arisen or which may arise in connection with a particular legal relationship, that court or
those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under
the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. It
is assumed that prorogation of jurisdiction provided by the Guarantee is valid and has full legal force under
the laws of the Czech Republic and the Regulation 1215/2012.
The information on the procedure for the enforcement in the Republic of Poland of judgments given in the
Czech Republic is provided in Clause 1 in this Chapter.
4.
Enforcement Against Alfanor as the Security Provider
4.1
Enforcement in Norway
Enforcement of claims against Alfanor in Norway could be affected by the Norwegian legislation on the
recognition and enforcement of foreign court rulings. Pursuant to the Norwegian Dispute Act Section 19-16
(1), civil claims which have been determined in a foreign state in a final and enforceable ruling, shall be
enforceable in Norway to the extent provided by statute or agreement with such state. Norway is not
obligated by any treaties to recognise or enforce rulings rendered by Turkish courts. Turkish rulings would
therefore, in general, not be enforceable in Norway pursuant to the provision in Section 19-16 (1) of the
Dispute Act.
An alternative basis for foreign rulings to be enforceable in Norway follows from Section 19-16 (2).
Pursuant to this provision, binding court rulings from foreign states are recognised in Norway if the ruling
has been obtained in a state the parties have agreed shall be the legal venue for a specific legal action or for
legal actions that arise out of a particular legal relationship. It is a prerequisite that the agreement on legal
venue is made in writing, cf. the Dispute Act Section 4-6 (2). This entails that a court judgement from
Turkey may be enforced in Norway if the parties have agreed that Turkey shall be legal venue for disputes
arising out of the parties' contractual relationship.
Foreign rulings which do not fall within one of the two alternatives referred to above, are not recognised or
enforceable in Norway. Note that recognition and enforcement of rulings by courts of arbitration is regulated
by the Arbitration Act. Pursuant to Section 45 of the Arbitration Act, rulings from both Norwegian and
foreign courts of arbitration shall be recognised and enforceable in Norway.
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A precondition for recognition and enforceability in Norway is that the foreign ruling must be final and
binding by the law of the rendering court's state. Besides, foreign judgements are not recognised if their
enforcement would be considered contrary to mandatory laws or offensive to the legal order in Norway
(ordre public-exception), cf. the Dispute Act Section 19-16 (3).
The Initial Turkish Pledge will be exercised in Turkey by the Security Agent. Pledges of shares in foreign
companies are normally exercised under the law governing the shares and the share pledge.
(a)
Alfanor must have the corporate authority to enter into the Pledge Agreement
Section 8-7 of the Norwegian Companies Act (Norwegian: “Aksjeloven”) generally limits the ability of a
limited company to give credit to, or furnish security for, the obligations of its shareholders, or such
shareholders' affiliated persons/companies, to the amount of distributable equity. However, Section 8-7 (3)
makes exceptions from the limitation in 8-7 in certain instances. As the security is provided in favour of a
foreign entity, the only relevant exception is in Section 8-7 (3), which exempts a credit or security in favour
of a legal person that has a controlling interest over the company, provided the credit or security shall serve
the group's economic interests.
The limitations in Section 8-7 of the Companies Act are in our view applicable in this case. This entails that
unless the Initial Turkish Pledge falls within the exception described above, the pledge will be subject to the
limitations of Section 8-7. A security issued in favour of a group company, which is intended to benefit the
business of the group, and not intended to benefit the ultimate shareholders of the group, is normally
regarded as serving the group's economic interests. Provided the Initial Turkish Pledge is regarded as serving
the group's economic interests, the pledge would fall within the exception and be exempt from the limitations
in Section 8-7 of the Companies Act.
(b)
Potential risks arising from Norwegian insolvency law
If the Initial Turkish Pledge is not established with protection to third parties, there is a risk that other third
parties may extinguish the Security Agent's rights in the shares. Such third parties may be other entities with
rights to the shares, for example a purchaser who has purchased the shares in good faith, or creditors of
Alfanor, or Alfanor's bankruptcy estate. The question of whether the Initial Turkish Pledge has protection
against third parties will in our view depend on Turkish law, as Indeks is a Turkish entity.
If the pledge is established with protection pursuant to Turkish law, a Norwegian bankruptcy estate, and
other third parties, will have to respect the pledge. The Security Agent will be satisfied in priority from the
proceeds of the pledged shares to other unsecured creditors of Alfanor. The Security Agent should thus be
able to seek full satisfaction for his secured claim against Alfanor in the event of Alfanor's insolvency,
provided that the value of the pledged shares is sufficient to cover the claim. However, the insolvency
administrator of an insolvent debtor's bankruptcy estate has a prioritised statutory lien over the assets of an
insolvent debtor, upwards limited to five per cent of the value of each asset, cf. the Mortgage Act Section 64. If the insolvency estate of Alfanor does not have sufficient funds to cover the insolvency administrator's
necessary costs, there is a risk that up to five per cent of the value of the pledged shares may be deducted to
cover the insolvency administrator's costs.
Norwegian bankruptcy law allows bankruptcy estates to sell the debtor's pledged assets if the value of the
asset to be sold exceeds the value of the pledge holders' claims against the debtor, cf. the Satisfaction of
Claims Act Section 8-15. Alfanor's bankruptcy estate, in the event of Alfanor's bankruptcy, could therefore
possibly sell Alfanor's shares in Indeks. The bankruptcy estate would, however, have to provide the Security
Agent with full satisfaction for his secured claim in the event of such a sale.
4.2
Enforcement in Turkey
The Initial Turkish Pledge agreement will be entered into before the Issue Date by the Security Agent, as the
pledgee, and the Security Provider, as the pledgor, in order to establish a first ranking pledge over the Initial
167
Turkish PledgedShares in favour of the Security Agent under the concept of the parallel debt as specified in
Clause 4.4 of the Terms and Conditions.
The Initial Turkish Pledge agreement is governed by the laws of Turkey and Istanbul Central (Çağlayan)
Courts and Execution Offices have the exclusive jurisdiction to hear and determine any lawsuit, action or
proceeding and to settle any disputes and all matters arising out of or in connection with the Initial Turkish
Pledge agreement.
According to the Initial Turkish Pledge agreement, the Initial Turkish Pledge will become immediately
enforceable upon the occurrence of an Enforcement Event. At any time from the occurrence of the
Enforcement Event, the Security Agent, as the pledgee, may, to the full extent enforceable under Turkish law
and in addition to any other method of foreclosure permitted at the relevant time by Turkish law:
a) sell the Initial Turkish PledgedShares by way of private sale in accordance with Article 47(4)(b) of
the Capital Markets Law numbered 6362 (Sermaye Piyasası Kanunu) (the CML) without being
subject to the applicable formal enforcement proceedings set out under the Turkish Execution and
Bankruptcy Law No. 2004 (the EBL); or
b) in accordance with Article 47(4)(b) of the CML, directly acquire the ownership of the Initial Turkish
Pledged Shares at the fair market value; or
c) sell the Initial Turkish PledgedShares through a public auction in accordance with the applicable
provisions of the EBL or through a private bargaining in accordance with Article 119 of the EBL.
The Security Agent will, as soon as reasonably practicable (at the latest within 30 Business Days), release
the Security Provider from the Initial Turkish Pledge. The Initial Turkish Pledge agreement will terminate
upon the Security Agent's release of the Initial Turkish Pledge.
168
SUBSCRIPTION AND SALE
The Lead Manager have agreed with the Issuer, pursuant to a Subscription Agreement and subject to the
satisfaction of certain conditions, to subscribe for the Bonds at the issue price set out in accordance with
Clause 2.2 of the Terms and Conditions less any applicable commissions and expenses as agreed between
the Issuer and the Lead Manager. The issue price of any Bonds issued on the Issue Date will be published on
the Issuer's website: http://www.privateequitymanagers.pl by selecting the following sections: “FUNDS
MANAGED”-”MCI.EUROVENTURES 1.0”-“MCI Venture Projects Sp. z o.o. VI S.K.A.” not later than
one day before the Issue Date.
The Issuer has also agreed, subject to certain limitations, to reimburse the Lead Manager for its expenses in
connection with the issue of the Bonds. The Subscription Agreement entitles the Lead Manager to terminate
it in certain circumstances prior to payment being made to the Issuer. The Issuer has agreed in the
Subscription Agreement to indemnify the Lead Manager against certain liabilities incurred in connection
with the issue of the Bonds.
The distribution of this Prospectus as well as any offers, sale or purchase of the Bonds are restricted by law
in some jurisdictions. The Issuer will not ask for approval or recognition of the Prospectus (including
its supplements, if any) in other jurisdiction, the Bonds will not be permitted or approved by any
administrative or other authority in any jurisdiction with the exception of the CNB. The placement in other
countries may be restricted by applicable law and may require additional approval, recognition or adherence
to certain procedures (including translation of the Prospectus or its part), or preparation or publication of
other documents. All persons in possession of this Prospectus will be responsible for observing any
restrictions relating to offers, purchase and sale of the Bonds and the possession and distribution of any
documents relating to the Bonds in all relevant jurisdictions.
In addition to the above, the Issuer asks the subscribers of each Bond and the Bond acquirers to observe all
relevant restrictions in each country (including the Czech Republic) where they would purchase, offer, sell
or otherwise transfer the Bonds or where they would distribute, make accessible or otherwise circulate this
Prospectus including its supplements, if any, or any other offering or promotional material or information
in connection with the Bonds, in each case at their own expense and irrespective of whether the Prospectus
or its supplements or any other offering or promotional material or information in connection with the Bonds
is recorded in the printed form or in the electronic or any other intangible form.
The Issuer also demands all subscribers and Bond acquirers not to offer publicly any Bonds in accordance
with the respective legal prescriptions. In other jurisdictions Bond offer may be limited by legal prescriptions
of such jurisdictions and may require approval, recognition or translation of the Prospectus or of its part
or other documents by a competent authority.
Any offer of any Bonds made by the Issuer (including the distribution of this Prospectus to selected investors
on a confidential basis in the Czech Republic prior to the approval of this Prospectus by the CNB and prior
to its publication) will be made exclusively to professional customers (within the meaning of Section 2a(1)
of the CMA) or outside of the Czech Republic in accordance with applicable laws. Such offer does not
require prior publication of a prospectus of the offered security. The Issuer notifies all potential investors and
other persons of the fact that any Bonds may only be acquired by investors for an aggregate issue price equal
to or in excess of the equivalent of EUR100,000 per one investor. The Issuer will not be bound by any order
of any potential investor for subscription or purchase of any Bonds if the aggregate issue price for the
ordered Bonds is less than the equivalent of EUR100,000.
The primary offering of the Bonds will not be made through an automated trading system of the PSE
(XETRA® Prague).
Any person that acquires any Bonds will be deemed to have represented and agreed that (i) such person
acknowledges all relevant restrictions on the offer and sale of the Bonds, in particular in the Czech Republic,
169
relating to such person and the relevant method of offer or sale, (ii) such person will not further offer for sale
or sell the Bonds without complying with all relevant restrictions applicable to such person and to the
relevant method of offer and sale and (iii) before further offering for sale or further selling the Bonds, such
person will inform the potential buyers that in certain jurisdictions, further offer or sale of the Bonds may
be subject to legal restrictions, which must be observed.
United States
The Issuer would like to draw the attention of potential investors to the fact that the Bonds have not been and
will not be registered under the U.S. 1933 Securities Act, as amended (the U.S. Securities Act) or by any
securities commission or any other authority of any State of the United States and therefore will not
be offered, sold or transferred within the United States or to U.S. residents (as defined in Regulation
S implementing the U.S. Securities Act) except pursuant to an exemption from the registration duty under
the U.S. Securities Act or in transactions not subjected to registration under the U.S. Securities Act.
Public Offer Selling Restriction under the Prospectus Directive
In relation to each Member State of the European Economic Area which has implemented the Prospectus
Directive (each a Relevant Member State), the Lead Manager has represented and agreed that with effect
from and including the date on which the Prospectus Directive is implemented in that Relevant Member
State (the Relevant Implementation Date) it has not made and will not make an offer of Bonds which are
the subject of the offering contemplated by this Prospectus to the public in that Relevant Member State
except that it may, with effect from and including the Relevant Implementation Date, make an offer of such
Bonds to the public in that Relevant Member State:
(a)
following the date of publication of a prospectus in relation to such Bonds which has been approved
by the competent authority in that Relevant Member State or, where appropriate, approved
in another Relevant Member State and notified to the competent authority in that Relevant Member
State in accordance with the Prospectus Directive, in the period beginning and ending on the dates
specified in such prospectus and the Issuer has consented in writing to its use for the purpose of that
offer;
(b)
at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(c)
at any time to fewer than 150 natural or legal persons (other than qualified investors as defined in the
Prospectus Directive), subject to obtaining the prior consent of the Lead Manager; or
(d)
at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Bonds referred to in (b) to (d) above shall require the Issuer or Lead Manager
to publish a prospectus pursuant to Article 3 of the Prospectus Directive, or supplement a prospectus
pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an offer of Bonds to the public in relation to any Bonds
in any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the Bonds to be offered so as to enable an investor to decide
to purchase or subscribe the Bonds, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State, the expression Prospectus Directive means
Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant
implementing measure in the Relevant Member State.
United Kingdom
The Issuer further wishes to point out that the Bonds will not be offered or sold in the United Kingdom
of Great Britain and Northern Ireland (the United Kingdom) by way of distributing any documents
170
or notices except for offers to persons authorised to trade with securities on their own or on someone else's
account in the United Kingdom or under such circumstances that do not constitute a public offer of securities
under the 1985 Companies Act, as amended. All legal acts pertaining to the Bonds made in the United
Kingdom, from the United Kingdom or otherwise associated with the United Kingdom in any manner
whatsoever will also be performed in compliance with the 2000 (FSMA 2000) legislation governing
financial services, including the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005,
and with the Prospectus Regulations 2005, as amended.
171
CERTAIN DEFINITIONS
The following definitions are applicable in this Prospectus, unless the context requires otherwise:
ABC Data means ABC Data spółka akcyjna (a joint-stock company) with its registered office in Warsaw
at ul. Daniszewska 14, 03-230 Warsaw, entered in the Register of Business Entities kept by the District
Court for the Capital City of Warsaw in Warsaw, XIII Commercial Division of the National Court Register
under the number KRS 0000287132;
ABC Data Group means ABC Data S.A., the parent and eight subsidiaries: ABC Data s.r.o. in the Czech
Republic, ABC Data s.r.o. in Slovakia, UAB “ABC Data Lietuva” in Lithuania, ABC DATA Marketing Sp.
z o.o. with the registered office in Warsaw, ABC Data Hungary Kft. in Hungary, ABC Data Distributie SRL
in Romania, ABC Data GmbH in Germany and iSource S.A. with the registered office in Warsaw;
Act on Investment Funds means the Polish Investment Funds Act of 27 May 2004 (Journal of Laws 2014,
item 157; as amended);
Additional Polish Pledged Shares means the ABC Data shares which are pledged following the Issue Date
under Clause 4.1 of the Terms and Conditions.
Additional Turkish Pledged Shares means the Index shares which are pledged following the Issue Date
under Clause 4.1 of the Terms and Conditions.
Alfanor means Alfanor 13131 AS, a company organized and existing under the laws of the Kingdom
of Norway, entered in the Norwegian Register of Companies (Foretaksregisteret) under the number 911 798
808, registered address: c/o Intertrust (Norway) AS, Bryggegata 6, 0250 Oslo, 0301 Oslo, Norway; postal
address: c/o Intertrust (Norway) AS, Postboks 2051 Vika, 0125 Oslo;
Alfanor's Articles of Association means Alfanor's Articles of Association;
Alfanor's Board of Directors means the board of directors of Alfanor;
Bondholder means the holder of at least one Bond;
Bonds Act means the Czech Act no. 190/2004 Coll., on Bonds, as amended;
Brussels Regulation means Regulation (EU) No 1215/2012 of the European Parliament and of the Council
of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters;
Business Day means any day (other than Saturday or Sunday) on which banks in the Czech Republic are
open for business, and on which foreign exchange transactions and interbank payments in Czech crowns, or
in any other lawful currency of the Czech Republic that might replace the Czech crown, are settled;
Calculation Agent means Česká spořitelna, a.s., with its registered office in Prague 4, Olbrachtova 1929/62,
Postal Code 140 00, identification number: 452 44 782, registered with the Commercial Register kept by the
Municipal Court in Prague, Section B, Insert No. 1171
Central Registry System means has the meaning given to it in the Initial Turkish Pledge agreement;
CMA means the Czech Act No. 256/2004 Coll., the Capital Market Act, as amended;
CNB means the Czech National Bank, which exercises supervision over the capital market in accordance
with Act No. 15/1998 Coll. on Supervision in the Capital Market Area and on the Amendment to Other
Laws;
172
Code of Civil Procedure means the Polish Code of Civil Procedure of 17 November 1964 (Journal of Laws
2014, item 101, as amended);
Commercial Companies Code – means the Polish Commercial Companies Code of 15 September 2000
(Journal of Laws 2013, item 1030, as amended);
CZK means the lawful currency of the Czech Republic;
EEA means the European Economic Area;
Enforcement Event has the meaning given in the Initial Turkish Pledge agreement;
Event of Default occurs when any of the events specified in clause 10.1 of the Terms and Conditions occurs
and is continuing;
EU means the European Union;
EU Countries means the EU Member States;
EUR or euro means the single currency of the participating member states in the Third Stage of European
Economic and Monetary Union pursuant to the Treaty on Functioning of the European Union, as amended
from time to time;
Final Redemption Date means the day on which the nominal value of the Bonds will be redeemed unless
the Bonds have been previously redeemed or purchased by the Issuer and cancelled as specified in the Terms
and Conditions;
Fund means MCI.PrivateVentures Fundusz Inwestycyjny Zamknięty with its registered office in Warsaw,
at ul. Emilii Plater 53, 00-113 Warsaw, entered in the Register of Investment Funds kept by the Regional
Court in Warsaw, VII Civil Registry Division, under the number RFi 347;
General Partner means MCI Venture Projects spółka z ograniczoną odpowiedzialnością (a limited liability
Commercial Division of the National Court Register under the number KRS 0000391951;
General Partner's Management Board means the General Partner's management board.
GPW means Giełda Papierów Wartościowych w Warszawie spółka akcyjna (the Warsaw Stock Exchange,
a joint-stock company) with its registered office in Warsaw, at ul. Książęca 4, 00-498 Warsaw, entered in the
Register of Business Entities kept by the District Court for the Capital City of Warsaw in Warsaw,
XII Commercial Division of the National Court Register under the number KRS 0000082312;
Guarantee means the guarantee granted by the Guarantor in connection with the Bond issue;
Guarantor means MCI Capital spółka akcyjna (a joint-stock company) with its registered office in Warsaw
at ul. Emilii Plater 53, 00-113 Warsaw, entered in the Register of Business Entities kept by the District Court
for the Capital City of Warsaw in Warsaw, XII Commercial Division of the National Court Register under
the number KRS 0000004542;
Guarantor's Articles of Association means the Guarantor's Articles of Association;
Guarantor's General Meeting means the Guarantor's general meeting;
Guarantor's Group has the meaning as the MCI Group;
173
Guarantor's Management Board means the Guarantor's management board;
Guarantor's Supervisory Board means the Guarantor's supervisory board;
IFRS means International Financial Reporting Standards as adopted by the EU;
Indeks means Indeks Bilgisayar Sistemleri Mühendislik Sanayi ve Ticaret A.Ş, a joint-stock company listed
on the Istanbul Stock Exchange, incorporated under the laws of the Republic of Turkey (register number
in the Istanbul Trade Registry: 256376);
Initial Polish Pledge means a registered pledge over Initial Polish Pledged Shares to be established in
connection with the Bond issue and, once the additional security over the Additional Polish Pledged Shares
is created under Clause 4.1 of the Terms and Conditions, it also means a registered pledge over the
Additional Polish Pledged Shares (where the context so requires);
Initial Polish Pledged Shares means the ABC Data shares which are pledged under the Initial Polish Pledge
agreement;
Initial Turkish Pledge means a registered pledge over the Initial Turkish Pledged Shares to be established
in connection with the Bond issue and, once the additional security over the Additional Turkish Pledged
Shares is created under Clause 4.1 of the Terms and Conditions, it also means a registered pledge over the
Additional Turkish Pledged Shares (where the context so requires);
Initial Turkish Pledged Shares means the Indeks shares which are pledged under the Initial Turkish Pledge
agreement;
IP S.K.A. means ImmoPartners spółka z ograniczoną odpowiedzialnością Asset Management spółka
komandytowo-akcyjna (ImmoPartners limited liability company Asset Management limited joint-stock
partnership) in liquidation with its registered office in Wrocław at ul. Ostrowskiego 30 apt. 150, 53-238
Wrocław, entered in the Register of Business Entities of the National Court Register under the number KRS
0000394446;
Issuer or MCI Venture or the Company means MCI Venture Project spółka z ograniczoną
odpowiedzialnością VI spółka komandytowo-akcyjna (a limited liability company VI limited joint-stock
partnership) with its registered office in Warsaw at ul. Emilii Plater 53, 00-113 Warsaw, entered in the
Issuer's Articles of Association means the Issuer's Articles of Association;
Issuer's General Meeting means the Issuer's general meeting;
Issuer's Group means the capital group of which the Issuer is a member;
Issuers' Regulation means Regulation of the Minister of Finance of 19 February 2009, regarding ongoing
and periodical information submitted by the issuers of securities and the terms of considering as equivalent
the information required by the provisions of law of a non-Member State (Journal of Laws 2014, item 133);
KDPW means the National Depository of Securities (Krajowy Depozyt Papierów Wartościowych S.A.);
MCI AM sp.j. means MCI Asset Management spółka z ograniczoną odpowiedzialnością spółka jawna
(a limited liability general partnership) with its registered office in Warsaw at ul. Emilii Plater 53, 00-113
Warsaw, entered in the Register of Business Entities kept by the District Court for the Capital City
of Warsaw in Warsaw, XII Commercial Division of the National Court Register under the number KRS
0000495415;
174
MCI Group or Guarantor's Group means the Guarantor and its Subsidiaries (as defined in Article 16
of the Terms and Conditions);
MCI FM means MCI Fund Management spółka z ograniczoną odpowiedzialnością (a limited liability
Commercial Division of the National Court Register under the number KRS 0000288538;
MCI TFI means MCI Capital Towarzystwo Funduszy Inwestycyjnych spółka akcyjna (a joint stock
company) with its registered office in Warsaw, at ul. Emilii Plater 53, 00-113 Warsaw, entered in the
MCI VP sp.j. means MCI Venture Projects spółka z ograniczoną odpowiedzialnością spółka jawna
(a limited liability general partnership) with its registered office in Warsaw at ul. Emilii Plater 53, 00-113
Warsaw, entered in the Register of Business Entities kept by the District Court for the Capital City
of Warsaw in Warsaw, XII Commercial Division of the National Court Register under the number KRS
0000492699;
NOK means the lawful currency of Norway;
PEManagers means Private Equity Managers spółka akcyjna (a joint-stock company) with its registered
office in Warsaw at the address: Rondo ONZ 1, 00-124 Warsaw, entered in the Register of Business Entities
kept by the District Court for the Capital City of Warsaw in Warsaw, XII Commercial Division of the
National Court Register under the number KRS 0000371491;
PFSA means Polish Financial Supervision Authority;
Pledgor's Intermediary Institution means Garanti Yatırım Menkul Kıymetler A.Ş. where Indeks Shares
are held in the Pledgor's Investor Account before creation/perfection of the pledge over Indeks Shares.
Pledgor's Investor Account has the meaning given in the Initial Turkish Pledge agreement;
PLN means the lawful currency of Poland;
Prague Stock Exchange or PSE means Burza cenných papírů Praha, a.s.;
Prospectus / Issue Prospectus means this issue document being the issue prospectus within the meaning
of the Public Offer Act and Regulation 809/2004, approved by the CNB;
Public Offer Act means the Act on Public Offerings and Conditions of Introducing Financial Instruments
to Organised Trading and on Public Companies of 29 July 2005 (Journal of Laws 2013, item 1382);
Registered Pledge Act means Act of 6 December 1996 on Registered Pledge and Register of Pledges
(Journal of Laws 2009, no. 67, item 569 as amended);
Regulation 809/2004 means Commission Regulation (EC) No. 809/2004 of 29 April 2004, implementing
Directive 2003/71/EC of the European Parliament and of the Council as regards information contained
in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and
dissemination of advertisements (Text with EEA relevance) (Official Journal of EU L.2004.149.1);
Secured Obligations has the meaning given in the Initial Turkish Pledge agreement;
175
Security means the security in the form of Initial Polish Pledge and Initial Turkish Pledge as specified in
Clause 4 of the Terms and Conditions as well as any other Security created as specified in clause 4 of the
Terms and Conditions, but not the Guarantee;
Security Agent means a creditor of the Parallel Obligations (as defined in Clause 4.4(b) of the Terms and
Conditions) and beneficiary of the Security;
Security 'Agent Claim means the claim of the Security Agent under the Security Documents as specified in
Clause 4.4 of the Terms and Conditions;
Security Documents mean any documents creating the Security;
Security Interest means any mortgage, charge, pledge, lien or other security interest including, without
limitation, anything analogous to any of the foregoing under the laws of any jurisdiction;
Security Provider means Alfanor;
Sub-fund MCI.EuroVentures 1.0. means the Sub-fund MCI.Euro Ventures 1.0 sub-fund separated in the
Fund, represented by MCI TFI;
Sub-fund MCI.TechVentures 1.0. means the Sub-fund MCI.Tech Ventures 1.0 sub-fund separated in the
Fund, represented by MCI TFI;
Sub-Funds mean Sub-fund MCI.EuroVentures 1.0. or Sub-fund MCI.TechVentures 1.0.;
Subsidiary means, in relation to any Person (the first Person) at any particular time, any other Person
(the second Person):
(a)
whose affairs and policies the first Person controls or has the power to control, whether
by ownership of share capital, contract, the power to appoint or remove members of the governing
body of the second Person or otherwise; or
(b)
whose financial statements are, in accordance with applicable law and generally accepted accounting
principles, consolidated using the acquisition accounting method with those of the first Person;
Terms and Conditions refers to the terms and conditions of the Bonds;
TRY means the lawful currency of Turkey.
We, us, our and other similar terms refer to the Issuer or the MCI Group, unless expressly stated otherwise
or the context otherwise requires.
176
GENERAL INFORMATION
The Bond issue will be carried out pursuant to Resolution no. 2 adopted by the Issuer's General Meeting on
14 December 2015. On 14 December 2015, the General Partner granted its consent for the Bond issue,
pursuant to §17, section 2, item 7) of the Issuer's Articles of Association.
The Bonds will be governed by Czech law, specifically the Bonds Act, the CMA and by the respective
relevant regulations of the public securities markets where the Bonds are to be listed.
This Prospectus was approved by the decision of the CNB on 1 April 2016, ref. no. 2016/039090/CNB/570,
file no. S-Sp-2016/00009/CNB/572, which became final and effective on 2 April 2016.
An application has been made for the Bonds to be admitted to listing on the regulated market (in Czech:
Regulovaný trh) of the PSE. The expenses related to the admission to trading of the Bonds on the regulated
market of the PSE are expected to be CZK 50,000. The total costs related to the Issue, including the total
costs related to the process of admission to trading of the Bonds on the regulated market of the PSE are
expected to be approx. CZK 9 million.
No significant change in the financial or trading position of the Issuer occurred between 31 December 2014
and the date of this Prospectus, with the exception of the following events:
(a)
On 16 February 2015 the Issuer entered into a non-revolving multicurrency loan agreement with
Raiffeisen Bank Polska Spółka Akcyjna. The loan in total amount of PLN30 million is to be repaid
on 31 March 2018. The interest rate is based on the WIBOR 1M plus bank's margin at 3 p.p.
WIBOR 1M means one month Warsaw Interbank Offer Rate.
(b)
On 20 April 2015 the Issuer issued a bill of exchange to MCI Venture Projects Spółka z ograniczoną
odpowiedzialnością X Spółka Komandytowo-Akcyjna with its seat in Warsaw, with maturity 6
months, in the amount of PLN350,000, at interest rate 3.7 per cent. p.a.
No significant change in the financial or trading position of the Guarantor occurred between 31 December
2015 and the date of this Prospectus.
This Prospectus was completed as of 24 March 2016.
KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. (KPMG), with its registered seat
at ul. Inflancka 4A, 00-189 Warszawa, Poland, audited the consolidated financial statements of the MCI
Group for the year ended 31 December 2014.
KPMG is registered in the register of auditors held by the National Chamber of Statutory Auditors under no.
3546. On behalf of KPMG the consolidated financial statements of the MCI Group for the year ended 31
December 2014 were audited by Ewa Jóźwik (certified auditor, license no. 11154) and Stacy Ligas.
PKF Consult Spółka z ograniczoną odpowiedzialnością (PKF), with its registered office at ul. Okrzycka 6,
lok. 1B, 02-695 Warsaw, Poland, audited the consolidated financial statements of the MCI Group for the
year ended 31 December 2013.
PKF is registered in the register of auditors held by the National Chamber of Statutory Auditors under
no. 477. On behalf of PKF the consolidated financial statements of the MCI Group for the year ended
31 December 2013 were audited by Ewa Ogryczak (certified auditor, license no. 11577).
The Issuer declares that none of the auditor and its members, employees or agents has any material interest
in the Issuer. The Issuer has asked the auditor for its consent and the financial information has been
incorporated into this Prospectus with the auditor's consent.
177
As of the date of this Prospectus and in the period of previous 12 months, the Issuer has not been involved
in any legal, administrative or arbitration proceedings in the Czech Republic or elsewhere, which could have
negative impact on its financial situation.
The full versions of the MCI Group's audited financial statements, including enclosures and auditor's reports
are enclosed in this Prospectus by references and, together with all other documents referred to in this
Prospectus, are available for inspection upon request at the Issuer's registered office during regular working
hours and on on the Issuer's web page (www.privateequitymanagers.pl/mci-euroventures-1-0/#mci-vp-viska) and the Guarantor's web page (www.mci.pl/en/investor-relation/financial-reports).
178
ADDRESSES
THE ISSUER
MCI Venture Projects Spółka z ograniczoną odpowiedzialnością VI spółka komandytowo – akcyjna
ul. Emilii Plater 53
00-113 Warsaw
Poland
THE GUARANTOR
MCI Capital S.A.
ul. Emilii Plater 53
00-113 Warsaw
Poland
THE SECURITY PROVIDER
Alfanor
c/o Intertrust (Norway) AS
Bryggegeta 6
0250 Oslo, 0301 Oslo
Norway
LEAD MANAGER
Olbrachtova 1929/62
140 00 Prague 4
Czech Republic
FISCAL, PAYING AND SECURITY AGENT
Olbrachtova 1929/62
140 00 Prague 4
Czech Republic
LEGAL ADVISOR TO THE LEAD MANAGER
Allen & Overy (Czech Republic) LLP, organizační složka
V Celnici 1031/4
110 00 Prague 1
Czech Republic
Allen & Overy, A. Pędzich sp. k.
Rondo ONZ 1
00-124 Warszawa
Poland
GEDİK & ERAKSOY
River Plaza Kat:17, Büyükdere Cad.
Bahar Sok. No:13
34394 Levent, İstanbul
Turkey
179
LEGAL ADVISOR TO THE ISSUER AND THE GUARANTOR
DUBIŃSKI FABRYCKI JELEŃSKI I WSPÓLNICY KANCELARIA PRAWNA SP. K.
Zielna 37
00-108 Warsaw
Poland
ISSUER'S AUDITORS
for 2013 and 2014
Okrzycka 6 lok. 1B
02-692 Warsaw
Poland
GUARANTOR'S AUDITORS
for 2013
Okrzycka 6 lok. 1B
02-692 Warsaw
Poland
for 2014 and 2015
ul. Inflancka 4A
00-189 Warsaw
Poland
180

MCI Venture Projects Spółka z ograniczoną

Transcription

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