The Management Board of Summa Linguae S.A. based in Krakow (“Company”, (“Issuer”) hereby publishes confidential information regarding the negotiation process with V4C Poland Plus Fund S.C.A. SICAV-FIAR (investment fund) registered in Luxembourg (“Fund”), whose publication has been delayed.
The Issuer’s Management Board hereby notifies that the negotiations with the Fund have been recognized as a process extended in time, whose result will be the conclusion of an investment agreement. In the course of this process, the Issuer has identified intermediate stages, each of which meets the criteria of confidential information. The provision of confidential information on the intermediate stages in the negotiation process was delayed until the conclusion of an agreement by the Issuer, under which the Issuer will incur binding liabilities (which took place on 28 October 2019, once the Issuer signed an annex to the heads of terms, which will be announced by the Issuer in subsequent Current Report 39 of 28 October 2019), pursuant to Article 17(1)(4) of the Regulation of the European Parliament and of the Council No 596/2014 of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (“MAR”) and Article 4 of Commission Implementing Regulation (EU) 2016/1055 of 29 June 2016 laying down implementing technical standards with regard to the technical means for appropriate public disclosure of inside information and for delaying the public disclosure of inside information in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council (“Implementing Regulation”), due to the protection of the Issuer’s legitimate interest, i.e. the risk of negative impact of providing the information concerned on the course and outcome of negotiations with the Fund, and thus the risk of adverse business and financial effects for the Company and the risk of inappropriate assessment of information on the Company’s negotiations with the Fund by the market.
The following intermediate stages of the negotiation process were delayed in public disclosure:
(1) of 5 April 2019, on the consent to the Company’s and its Group’s due diligence audit
The content of the delayed confidential information:
“The Management Board of Summa Linguae S.A. based in Krakow (“Company”) hereby notifies that on 5 April 2019, it decided to grant consent to V4C Poland Plus Fund S.C.A. SICAV-FIAR, registered in Luxembourg (“Fund”), to carry out a due diligence audit of the Company and its Group and to provide the Fund with access to information on the Company and its Group, by enabling it to access the Virtual Data Room (VDR) Internet platform, and thus informs about the launch of negotiations of the terms of the Fund’s possible investment in the Company.”
(2) of 22 July 2019, on the conclusion of Heads of Terms.
The content of the delayed confidential information:
“The Management Board of Summa Linguae S.A. based in Krakow (“Issuer”) hereby announces the conclusion, on 22 July 2019, of a heads of terms document between V4C Poland Plus Fund S.C.A. SICAV-FIAR registered in Luxembourg (“Fund”), Mr Krzysztof Zdanowski, President of the Issuer’s Management Board and Ms Madhuri Hegde, the Issuer’s shareholder (“Heads of Terms). The Heads of Terms specifies the rules for negotiating the terms of the Fund’s acquisition of and subscription for the Issuer’s shares in a number that will make the Fund hold the controlling interest in the Issuer’s share capital (at least 50% + 1 share) (“Transaction”). The key arrangements contained in the Heads of Terms are as follows:
(1) The Fund will carry out a complete due diligence audit of the Company and its Group.
(2) An investment agreement will be concluded between the Fund, the Issuer, Mr Krzysztof Zdanowski and Ms Madhuri Hegde, that will specify the terms of the Transaction (“Investment Agreement”), provided that the findings of the due diligence audit are positive and the Fund obtains relevant corporate approvals.
(3) The Fund, the Issuer, Mr Krzysztof Zdanowski, Ms Madhuri Hegde and the Issuer’s shareholders specified in the Heads of Terms will conclude a shareholders’ agreement, specifying the rules for the parties’ cooperation after the Transaction has been effected (“Shareholders’ Agreement”).
(4) The Issuer’s General Meeting will be convened, whose agenda will provide for an increase in the Issuer’s share capital through the issue of new shares, excluding the pre-emptive rights of the Issuer’s shareholders. The newly issued shares will be taken up for cash contributions, as part of a private placement, by private investors selected by the Issuer (“Investors”) and the Fund, subject to the provision that as a result of the increase in the Issuer’s share capital and acquisition of shares pursuant to clause 5, the Fund will become the controlling shareholder of the Issuer. The amount of the Fund’s cash contribution will be transferred to the Issuer’s bank account, among others, subject to the conclusion of agreements on the acquisition of shares of entities operating in the American and Canadian markets, in accordance with the information provided in the Issuer’s Current Report 30/2019 of 3 July 2019 and Current Report 18/2019 of 24 May 2019 (“Takeover”).
(5) The Fund will conclude agreements with the Issuer’s shareholders specified in the Heads of Terms, providing for the sale of the Issuer’s shares, under which the Fund will acquire the existing shares of the Issuer.
(6) The final structure of the Transaction, the wording of the Investment Agreement and the Shareholders’ Agreement will be determined by the Parties in the course of further negotiations, whereby the Parties have agreed, among others, that:
(a) The Investment Agreement will contain provisions limiting the ability to make business decisions by the Issuer and its subsidiaries in the period between the conclusion of the Investment Agreement and the Transaction date;
(b) The Fund will be allowed to withdraw from the Investment Agreement if, e.g. the Issuer fails to effect the Takeover.
(7) The Heads of Terms is not a legally binding agreement, subject to the confidentiality and no-shop clauses and those regarding arbitrage, governing law and costs.
The Issuer considers this information material because if the Transaction is concluded, its value will exceed the materiality criterion specified in the Disclosure Policy published in Current Report 39/2018 of 27 November 2018.”
Pursuant to Article 17(4)(3) of the MAR, following the publication of this Report, the Issuer will immediately notify the Polish Financial Supervision Authority of the delay in disclosing the above confidential information, by submitting a written explanation regarding the fulfilment of the conditions set out in Article 17(4)(a)-(c) of the MAR.
Legal grounds: Article 17(1) and (4) of MAR – confidential information.
The Company’s representatives,
Krzysztof Zdanowski, President of the Management Board