The Management Board of Budimex SA announces that on 29 October 2012 Budimex SA signed a conditional contract with Ferrovial Agroman SA with its registered office in Madrid (a construction company belonging to the Ferrovial Group) on the provision of support to Budimex by the strategic investor as regards operational know-how, rationalising processes and procedures in the key areas of construction and investment activities, cost control methods, budgeting, financial models, technical references, branding, corporate identity, long-term employee training programs and internal corporate communication system.
Material terms of the contract:

  • The remuneration under the contract shall amount to 0.5% of the annual sales revenue of the Budimex Group less the sales revenue of Budimex Nieruchomości Sp. z o.o. (a developer company, 100% subsidiary of Budimex SA).
  • In order to maintain the transparency of the transaction, the parties to the contract decided to submit to the Ministers of Finance of Poland and Spain applications for acknowledgement of the correct selection and use of transactional price (Bilateral APA). Until the fiscal authorities of both countries confirm the correctness of pricing, Budimex SA shall pay to Ferrovial Agroman SA a fee minus 25% i.e. 0.375% of the annual sales revenue of the Budimex Group less the sales revenue of Budimex Nieruchomości Sp. z o.o. After the fiscal authorities of both countries confirm the market pricing, the parties to the contract shall conduct a mutual settlement in accordance with the decision of the Ministers of Finance.
  • The contract covers the period between 01.01 2012 and 31.12 2016.
  • The contract shall enter into force on the day of submitting the second of the two applications for the initiation of the BAPA procedure. One application is submitted by Budimex SA and the other by Ferrovial Agroman SA. The condition precedent of the contract is therefore the submission by both parties to the contract of the application for the initiation of the BAPA procedure.
  • If in any quarter during the term of the contract, the Budimex Group suffers gross financial loss, payment of the remuneration under the contract shall be suspended until the Budimex Group has shown a gross profit for at least 3 months.
  • The settlements under the contract are made in Polish zloty (PLN).
    Payment on the basis of monthly invoices shall be made within 30 days from receipt of the applicable invoice.
  • Penalties: Delayed payment of invoices – the interest of WIBOR for 1 year deposit +2% calculated from the first day of the delay.
  • Signing of the contract has a neutral impact on the results of the Budimex Group in 2012 due to the provisions made by Budimex SA to this end.

The value of the contract exceeds 10% of the equity of Budimex SA.

Comments on the contract