Current Report No. 45/2016: Conclusion of the material agreement with subsidiaries from Eurobank Group

With reference to the current report No 52/2015 dated July 31st 2015 and report No 34/2016 dated April 27th 2016 referring to the Project described in them, the Management Board of KRUK S.A. (Issuer) would like to inform that today, on the May 20th 2016 the material binding agreement (Agreement) among Issuer’s subsidiary ProsperoCapital S.a r.l. having its registered office in Luxembourg (Buyer) and entities of the Eurobank Group in Romania: Bancpost S.A. and ERB Retail Services IFN S.A having their registered office in Bucharest, and its Dutch subsidiary ERB New Europe Funding II B.V. having its registered office in Amsterdam, (the Sellers), was signed. 
The subject of the Agreement is the acquisition of three portfolios of receivables (Receivables) which have a nominal value of EUR 597m (PLN 2.6bn according to NBP exchange rate of May 20th 2016) for the price specified in the Agreement (Price). The Price will ultimately reflect the agreed adjustments.
The investment project is intended to be realized in consortium with IFC, a member of the World Bank Group, with headquarters in Washington, DC, USA and KRUK S.A. subsidiary InvestCapital Malta Ltd. having its registered office in Malta (Investors). The investment share of KRUK Group is about of EUR 46m (PLN 203m according to NBP exchange rate of May 20th 2016) (Share). The Share will reflect the above mentioned adjustments  of the Price. Investors shall fund the Buyer on a pro rata basis to the aggregate purchase Price that they agreed to pay as a consideration for Receivables.
The closing of the Agreement is subject to the approval of the Romanian Competition Council. The assignment of the Receivables will take place after receipt of Romanian Competition Council’s approval and payment of the Price. According to the Agreement’s provisions, the conditions precedents have to be met until the date of August 1st 2016. Otherwise, the Sellers and the Buyer may either mutually agree to extend the closing of the Agreement beyond August 1st 2016, potentially with an agreed adjustment of the Price, or unilaterally terminate the Agreement.
The Agreement provides the contractual penalty of EUR 6,8m (PLN 30m according to NBP exchange rate of May 20th 2016) to be paid by the Buyer in case the Sellers terminate the Agreement because the Buyer refuses or does not proceed to the closing for other reasons than due to the fault of the Sellers or a force majeure event. The Buyer shall be under no obligation to pay any amounts exceeding the above mentioned penalty.
The value of the concluded Agreement exceeds the threshold of 10% of the KRUK Group’s revenue for the last four quarters which is the criterion for recognizing the agreement as a material agreement.
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