Grupa Azoty (f. Project Wisla)

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Translated version of this PSD: Polish The proposed project comprises an equity investment by the EBRD in Zaklady Azotowe w Tarnowie-Moscicach S.A. (the “Company” or “Grupa Azoty”) of PLN 296.4 million (equivalent of EUR 72.1 million) for approximately 5.75% stake. The investment was made alongside other institutional investors by way of a block trade, following the Accelerated Book-Building process (“ABB”) carried out by the State Treasury on the Warsaw Stock Exchange. In an effort to continue privatization of the Company, the State Treasury offered for sale up to 12,030,108 shares in the Company’s share capital, constituting 12.13% of the Company’s share capital and total voting rights in the Company. As a result of the ABB, the State Treasury’s shareholding in the Company (and number of voting rights) is expected to fall to 33% of the shares and total voting rights in the Company. The project will lead to increased private ownership in the Company and will support a comprehensive post-merger integration programme following the successful consolidation of the chemical sector in Poland. Transition impact of the project will derive from: (i) demonstration of successful integration and restructuring - following the completion of the consolidation, the Group will integrate and restructure the assets and realize synergies deriving from the merger. Synergies derive from joint pricing policy, coordinated supply purchase, optimisation of logistics and some optimisation of non-production functions; (ii) setting standards of corporate governance - the Company will strengthen its internal audit function in accordance with international best practice, will develop a code of conduct including provisions aimed at strengthening the company’s corporate governance and practices in line with best international standards; Furthermore, the Company is required to apply the Bank’s Performance Requirements as detailed in the EBRD’s Environmental and Social Policy as well as implement an Environmental and Social Action Plan (ESAP). This is particularly important for heavy chemical sector in Poland. (iii) increased private ownership - The chemical sector in Poland remains largely state-controlled despite several attempts to privatize the sector in the past. The transaction, if completed successfully will constitute an important step towards increased private ownership and possible future full exit by the State. Consolidation, operational restructuring and realization of synergies that this project is supporting are expected to make the sector more attractive to possible private international investors and ultimately help the privatization be completed. Grupa Azoty is no. 1 player in Poland in fertilisers and chemicals. On the European market it will be ranked 2nd / 3rd in fertilisers and 4th/7th in chemicals. Following the consolidation with Zaklady Azotowe “Pulawy”, the Group will generate sales of ~PLN 10 billion and will be offering a complete range of product portfolio. The Company is listed on Warsaw Stock Exchange since mid-2008 with a market cap of PLN 5.5bn / EUR 1.4bn. Grupa Azoty competitive edge is based on strong market position, diversified product range, access to markets and distribution channels, access to local (cheaper) gas deposits, vertical integration, strong branding and own R&D. Categorised B. An equity investment into a multisite facility requires a corporate environmental audit and the development of Environmental and Social Action Plan (ESAP) as part of the Environmental and Social Due Diligence (ESDD). The ESDD has confirmed that the Company has the institutional capacity to fully implement the Bank’s Performance Requirements. The Bank will monitor the implementation of the ESAP, and a regular audit will be undertaken every 3 years by an independent consultant as part of project implementation. An independent BAT Assessment will be undertaken in 2015. The Company will also develop and publish a corporate annual EHS report as part of its Corporate Social Responsibility (CSR) programme and stakeholder engagement process. None.