The Issuer and the Selling Shareholder intend to enter, on or about the date of publication of this Prospectus, i.e. on or about 11 October 2010, into an underwriting agreement (the “Underwriting Agreement”) in respect of the Offering with the Managers and the Underwriter, in which the Underwriter and the Joint Lead Manager will commit, subject to certain other conditions, to subscribe for the Offer Shares, which were not subscribed for by the Institutional Investors recommended to the Issuer and the Selling Shareholder by the Managers or Underwriter (and were initially allocated the Offer Shares by the Issuer and the Selling Shareholder in accordance with the recommendation), and to pay the amount equal product of the Offer Price and the number of the Offer Shares that were not subscribed for by the Institutional Investors recommended to the Issuer and the Selling Shareholder by the Managers or Underwriter . The Sole Global Coordinator and Sole Bookrunner, the Polish Retail Manger, the Czech Retail Manager, the Slovak Retail Manager, the Selling Agent and the Polish Selling Agents will not underwrite any portion of the Offering. The underwriting commitment is summarised below:
Name Percentage of Shares
UniCredit Bank Austria AG, with its address at Schottengasse 6 – 8, A-1010 Wien, Austria 80%
Erste Group Bank AG, with its address at Graben 21, A-1010 Wien, Austria 20%
Total 100%
Over-allotment Option
In connection with the placement of the Offer Shares, the Selling Shareholder has granted the Sole Global Coordinator and Sole Bookrunner an option (referred to as the “Over-allotment Option”), on behalf of the Managers, solely for the purpose of covering over allotments, to purchase an additional 2,370,000 shares at the Offer Price. The Over-allotment Option is exercisable, in whole or in part, during the period which runs from the date of the Prospectus until thirty days after the announcement of the Offer Price, i.e. until thirty days after the Pricing and Allotment Date.
Over-allotment and stabilisation
In connection with the Offering, the Sole Global Coordinator and Sole Bookrunner or its affiliates or agents may engage in transactions on the WSE and on the PSE with the aim of supporting the market price of the Shares at a level higher than would otherwise prevail. Such stabilisation shall be conducted in accordance with the rules set out in the European Commission Regulation (EC) No. 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buyback programmes and stabilisation of financial instruments (the “Stabilisation Regulation”).
No assurance can be given that stabilisation transactions will actually be effected. If such stabilisation is commenced, however, it may be discontinued at any time without prior notice. The stabilising actions, if any, will be undertaken, between the first day of trading or conditional trading in the Shares on the WSE and the PSE, whichever is earlier, and no later than thirty days after the announcement of the Offer Price and may result in a market price of the Shares that is higher than the price that would otherwise prevail. Stabilisation of the Shares will not, in any circumstance, be executed above the Offer Price.
The Sole Global Coordinator and Sole Bookrunner will disclose all details of any stabilisation transactions effected by it to the PFSA (with respect to transactions carried out on the WSE) and the CNB (with respect to transactions carried out on the PSE) no later than the end of the seventh daily market session following the date of execution of such transactions. Within one week of the end of the stabilisation period the Sole Global Coordinator and Sole Bookrunner will disclose to the public in a manner compliant with applicable regulations, as well as market practices in the Netherlands, the Czech Republic and Poland (i) whether or not stabilisation was undertaken, (ii) the date on which stabilisation started, (iii) the date on which stabilisation last occurred and (iv) the price range within which stabilisation was carried out, for each of the dates during which stabilisation transactions were carried out.
For the purpose of the aforementioned stabilisation, additional Shares up to the number of the Over-allotment Shares may be over- allocated to investors by the Sole Global Coordinator and Sole Bookrunner on the Pricing and Allotment Date at the Offer Price. Should a short position arise as a result of such over-allocation, the Sole Global Coordinator and Sole Bookrunner may close such short position by exercising the Over-allotment Option (in whole or in part) or by open-market purchases or by a combination of both. The exercise of the Over-allotment Option will be promptly disclosed to the public. This disclosure will contain all appropriate details, including the date of exercise and the number of the Over-allotment Shares purchased.
Fees
In connection with the Offering, the Issuer and the Selling Shareholder have agreed to pay the Managers and the Underwriter a combined management, underwriting and placing commission of 2.5% of the gross proceeds from the Offering (subject to a certain minimum cap), including the shares placed under the Over-allotment Option, if any, and to reimburse them for reasonable expenses incurred in connection therewith. In addition, the Sole Global Coordinator and Sole Bookrunner is entitled to an incentive fee that will be calculated based on the results of the Offering and the Issuer’s financial condition at that time. Since the amount of the incentive fee depends on future events, there is no possibility to estimate it before the Offering.
The Issuer and the Selling Shareholder also agreed to pay all commissions and expenses in connection with the Offering. However, investors will bear their own costs connected with the evaluation and participation in the Offering, i.e. standard brokerage fees charged by brokers.
Conditions of the Underwriting commitment
The Underwriting Agreement will provide that the obligations of the Managers and of the Underwriter are subject to certain conditions precedent. If any or all of these conditions (such as delivery of customary legal opinions and comfort letters), are not met or waived, a breach of the Issuer’s representations and warranties occurs or if any of the circumstances which will be referred to in the Underwriting Agreement occur prior to payment for and delivery of the Offer Shares, the Managers and the Underwriter may, at their sole discretion, terminate the Underwriting Agreement and the Underwriter’s and the Joint Lead Manager’s obligation to subscribe for any Offer Shares will lapse.
The Issuer and the Selling Shareholder envisage that the Underwriter and the Joint Lead Manager shall agree to subscribe for the Offer Shares, which were not subscribed for by the Institutional Investors recommended to the Issuer and the Selling Shareholder by the Managers or Underwriter (and were initially allocated the Offer Shares by the Issuer and the Selling Shareholder in accordance with the recommendation), and to pay the amount equal product of the Offer Price and the number of the Offer Shares that were not subscribed for by the Institutional Investors recommended to the Issuer and the Selling Shareholder by the Managers or Underwriter, provided inter alia that no material adverse change will occur in the Issuer’s financial and/or legal standing from the date when the Prospectus is published until the date of settlement of the Offering. The Issuer and the Selling Shareholder will also agree that the Offer Shares subscribed for by the Underwriter and the Joint Lead Manager may be transferred at any time, without any restrictions whatsoever, on the terms and conditions set forth by the applicable laws.
The Issuer and the Selling Shareholder will also undertake: (i) to take all actions necessary to list the Shares on the WSE and the PSE, and in particular to file relevant applications, (ii) not to enter into any other underwriting agreement in respect of the Shares and (iii) to use the proceeds from the Offering for the purposes indicated in the Prospectus. Each of the Managers and the Underwriter will be able to terminate the Underwriting Agreement in the event of any occurrence of force majeure (as defined in the Underwriting Agreement, but in any case including publication or an intention to publish a supplement to the Prospectus), upon prompt written notice by the terminating party.
In addition, the Issuer has agreed to indemnify each of the Managers and the Underwriter Manager, their affiliates and their respective directors and employees against certain liabilities, including liabilities under applicable securities laws. These indemnifications will survive expiry and termination, if any, of the Underwriting Agreement.
Interests of natural and legal persons participating in the Offering
The Managers and other parties described below have contractual relationships with the Issuer in connection with the Offering and the Admission. UniCredit Bank AG (London Branch) has been mandated by the Issuer as the Sole Global Coordinator and Sole Bookrunner, UniCredit Bank Austria AG has been mandated by the Issuer as the Underwriter, Erste Group Bank AG has been mandated by the Issuer as Joint Lead Manager, Česká spořitelna, a.s. has been mandated by the Issuer as the Czech Retail Manager, Slovenská sporiteľňa, a.s. has been mandated by the Issuer as the Slovak Retail Manager, UniCredit CAIB Poland S.A, has been mandated by the Issuer as a Polish Retail Manager, brokerjet České spořitelny, a.s. has been mandated by the Issuer as the Selling Agent and Centralny Dom Maklerski Pekao S.A. and Dom Maklerski Pekao S.A have been mandated by the Issuer as the Polish Selling Agents. The Managers advise the Issuer and the Selling Shareholder in connection with the Offering and Admission and coordinate the structuring and execution of the transaction. If the transaction is successfully executed, the Managers and the Underwriter will receive a combined commission (see ”Placing and Underwriting – Fees”).
The Managers, the Underwriter, their affiliates or other parties described in the first paragraph above may in connection with the Offering acquire the Offer Shares as investors and hold or sell those Shares for their own account, and may offer and sell those Shares outside of the offering period as well. This does not constitute a preferential allotment. The Managers and the Underwriter do not intend to disclose the extent of such investments or transactions unless required by law.
The Managers, the Underwriter, their respective affiliates or other parties described in the first paragraph above have in the past engaged and may in the future engage in investment and commercial banking and other commercial dealings in the ordinary course of business with the Selling Shareholder or with the Issuer, for which they received or will receive customary fees and commissions. The Sale Shares and the Over-allotment Shares to be placed in the course of the Offering will be offered by the Selling Shareholder, which will receive an amount of the net proceeds proportionate to the Sale Shares and the Over-allotment Shares sold in the Offering. The Selling Shareholder, therefore, has a financial interest in the implementation of the Offering at the highest Offer Price possible.
SELLING RESTRICTIONS