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IZO-BLOK gets closer and closer to takeover SSW PearlFoam. An acquisition loan granted

IZO-BLOK S.A. – ranking 2nd in Europe among EPP (expanded polypropylene) processing companies and manufacturers of EPP elements, whose nearly 90% of sales revenue is generated by the automotive industry – signed a credit agreement with BZWBK S.A. The amount of acquisition credit intended to cover the acquisition of 100% shares at the German company SSW PearlFoam will equal max. EUR 11,000,421.36, which constitutes approx. 50% of resources required to pay for the acquisition. The remaining part will be covered by funds from the issue of shares. The Company started its public offering including the issue of no less than 1 and no more than 300 ths new shares.

The credit will be based on a variable interest rate calculated per annum. The amount of the interest rate will equal a EURIBOR variable interest rate for 1-month interbank credits, increased by the bank’s margin.

We are proceeding according to plan. Signing a credit agreement for the acquisition of SSW PearlFoam is an important step. The next one will involve the successful issuing of shares. We are in the process of creating an order book. We are starting the subscriptions on July 1. The successful acquisition of our German competitor – SSW PearlFoam – will open up possibilities of entering the Asian market. We will have our own material which will give us considerable independence. We will also have an established position among OEMs and TIER1 or TIER2 companies. Our customers are already pushing us to appear there faster. They need a global and reliable supplier. IZO-BLOK can provide that. – says Przemysław Skrzydlak, Chairman and main shareholder of IZO-BLOK S.A.

Subscription for shares for individual investors will be accepted on July 1–5, 2016 in selected posts of DM BZWBK S.A. and selected members of the distribution consortium: BM Alior Bank S.A., DM BOŚ S.A., CDM Pekao S.A. and DM Pekao S.A. A list of posts accepting subscription for D-series shares of IZO-BLOK was published in the form of an update announcement to the Prospectus at www.dmbzwbk.pl, as well as at the Issuer’s websites – www.izo-blok.pl and www.spo.izo-blok.pl.

MOST IMPORTANT INFORMATION ABOUT THE PUBLIC OFFERING OF IZO-BLOK S.A.:

• The public offering includes from 1 to 300,000 D-series bearer shares with a face value of PLN 10.00 each.
• The offered new D-series shares will be split into a tranche for individual investors and a tranche for institutional investors.
• The biggest shareholders of the Company, i.e. the Company’s Chairman of the Board Przemysław Skrzydlak and Andrzej Kwiatkowski (member of the Supervisory Board) as well as the Company have committed to a 360-day lock-up occurring after the day of approving the Prospectus.
• After finishing the public offering, assuming sales of the maximum anticipated D-series shares, new shareholders will assume 23.08% share in the initial capital and 17.42% share of votes at the Annual Meeting of Shareholders.

PUBLIC OFFERING SCHEDULE

STRATEGY

The strategic purpose for the planned IZO-BLOK Capital Group, assuming the successful acquisition of SSW PearlFoam, is to create a leading European and world Company specializing in the processing of expanded plastics with special consideration of expanded polypropylene (EPP). The increase of the Group’s value will be possible thanks to maintaining full flexibility, quickness of acting and high quality standards which, as indicated by the current experience of both companies, allow for fulfilling customer demands and requirements, thus building solid foundations for mutually beneficial and long-term relations.

FINANCIAL RESULTS

Selected financial results of IZO-BLOK in 2005/2006 – 2014/2015 are presented in the following table and graph:

We are a dynamically developing EPP processing Company and manufacturer of EPP elements, with over 90% of exposure to the European market. Since 2001, we have been systematically increasing our market share in Europe by working out better profit. Our dynamic development is due especially to the consistent implementation of our strategy. We operate on a market with big potential, both within the EU as well as globally. The increasing demand for EPP elements in a global automotive industry means great development opportunity for us. We want to use this opportunity as much as possible, hence our decision to acquire our largest competitor – the German SSW PearlFoam. Successful execution of this acquisition will not only allow us to increase our share on the European EPP market for the industry, but it will also serve as a good stronghold for entering the Asian market. This is what our customers expect already today – says Przemysław Skrzydlak, CEO of IZO-BLOK S.A.

That is why I can boldly say that the resources obtained from the issuing of new shares will allow for a more dynamic growth. We believe that the Company can be attractive for investors. Thanks to more than 15 years of experience on the EPP market in the automotive industry, a diverse portfolio of prestigious customers and systematic increase of the scale of operations in various market conditions, we have a clearly defined growth path. We set goals and execute them consistently – adds Przemysław Skrzydlak, CEO of IZO-BLOK S.A.