CALL FOR BINDING BIDS TO PURCHASE CLAIMS

CALL FOR BINDING BIDS TO PURCHASE CLAIMS Call for binding bids to purchase the claims which Družba za upravljanje terjatev bank, d.d., Davčna ulica 1, 1000 Ljubljana holds against the company A.D. ELEKTROTEHNA PODGORICA (short company name ELEKTROTEHNA), A.D."ELEKTROTEHNA"UL. 4. JULA BR. 51, PODGORICA, MONTENEGRO, company registration number 40006214, PIB: 02199734 (hereinafter referred to as: Company ). Družba za upravljanje terjatev bank, d. d., Davčna ulica 1, 1000, Ljubljana, (hereinafter: Seller or BAMC ) hereby publishes this call for binding bids to purchase the Seller s claims held against the Company. 1. Subject of the sale The Seller intends to sell off its claims, including accrued court fees, interest and accessory rights held against the Company. As of 26 January 2018, this amounts to a total of 11,781,603.36 (hereinafter: Claim ). In the event that the contract should be signed, the aforementioned amount of the Claim shall be increased by the relevant charges and interest accrued from 27 January 2018 until paid. 2. Tendering procedure The Claim sale process shall be conducted by the Seller. The procedure involving the sale of the Claim is open to domestic and foreign individuals and legal entities, who have submitted written bids to purchase the Claim in accordance with the conditions set out below. The seller will consider the incoming binding bids for the purchase of the Claim, sent by certified post, enclosed in a sealed envelope or parcel and sent to the following address: Družba za upravljanje terjatev bank, d.d., Davčna ulica 1, 1000 Ljubljana, marked: DO NOT OPEN - BID FOR THE PURCHASE OF CLAIMS (ELEKTROTEHNA AD). The reverse side of the envelope must state the bidder s name and surname or company name, and address. The deadline for receipt of binding bids shall be 03 May 2018, received at or before 14:00. The bid shall be considered to have been submitted in a timely manner if it has been delivered to the Seller s address by the aforementioned date, at or before 14:00 hours. 2.1. Contents of the binding bid For the purposes of the bidding procedure, Seller shall consider binding bids which have been signed by the bidder s legal representative and contain the following elements: A. Buyer information: i. bidder s name and tax number, ii. authorized representative contact information, 1

iii. presentation - short description of the interested party s core business, including the volume of business, iv. identity of the bidder s ultimate owner, v. a statement confirming that the interested party is acting in its own name and for its own account, vi. description of the purpose of the purchase of the Claim; vii. statement testifying to the fact that the Bidder has all internal and other authorizations required to submit a binding bid, as well as a description of all circumstances surrounding the granting of consents from competent authorities which may be required to validate the purchase of the Claim; viii. basic financials - balance sheet and income statement for the past three years, or the entity s entire period of operation, if shorter, ix. a formal statement confirming that no winding-down, bankruptcy, compulsory settlement or other insolvency or restructuring procedure has been initiated against the bidder; B. Statement about the circumstances of the financial purchase or method of financing: i. description of the method for financing, ii. proof or reliable explanation that the interested party has or will have at its disposal adequate funding at least in the amount offered by the interested party in its binding bid (for example: a statement from the bank confirming a deposit has been made by the interested party, a statement from the bank confirming the intent of financing, etc.), iii. explicit description of the actual source of funding for the purchase (including the amounts financing using the bidder s own capital and amounts financed through borrowing from third-party sources (banks, etc.)); C. Statement about any outstanding debts (existing or potential) the potential investor has in relation to the BAMC, wherein the interested party should describe whether it has any existing or potential debt to the BAMC; D. Statement concerning associations between the bidder and Company, wherein the bidder indicates whether or not it has any equity or administration or any other interest vested in the Company, in terms of rules governing companies, or if the bidder has any associations with the owners or members of executive or supervisory bodies in the Company, or with any companies with equity or other associations with the Company or the owners owners or members of executive or supervisory bodies in such Companies, or if such association had ever existed in the past; E. A declaration that there is no legal impediment to execute the Agreement on the Sale of Claims in the sense of Article 13 of the Act Defining the Measures of the Republic of Slovenia to Strengthen Bank Stability (ZUKSB - Official Gazette of the Republic of Slovenia, no. 105/2012, 63/2013, 23/2014 and 104/2015), specifically that the bidder is not: i. a person considered to be related to the Company under the law which regulates companies; ii. a legal entity whose share is owned by one of the foregoing persons, or whose member of the managing body or procurator was a member of the Company s managing body 2

or Company s procurator within a period of three years prior to the establishment of the Claim, except if such person is related to the person referred to in the first or second indent of this paragraph in such a way that the Republic of Slovenia is the controlling company under the act which regulates takeovers; iii. an individual who was a member of the Company s management or a procurator within three years prior to the establishment of the Claim; iv. an individual who is considered closely related to the individual referred to in the preceding indent iii., as stipulated in the law governing insolvency procedures; v. a person who, according to the act which regulates takeovers, can indisputably be presumed to be acting in concert with the person referred to in the preceding two indents of this paragraph, except if such person is related to the person referred to in the preceding two indents of this paragraph in such a way that the Republic of Slovenia is the controlling company under the act which regulates takeovers; vi. a legal person which performed the asset quality review and stress tests for the banking system in 2013 (BAMC can provide information about such legal entities); vii. a legal entity related to a legal entity through capital which had performed bank asset quality reviews and bank stress tests in 2013; viii. a legal entity which is receiving business consultancy services from a legal entity which had performed bank asset quality reviews and bank stress tests in 2013; or a legal entity which is receiving business consultancy from an individual who was involved in the bank asset quality reviews and bank stress tests in 2013 as an employee in the aforementioned legal entities or as a subcontractor of these companies. Templates of all statements are predefined by BAMC and are available on BAMC s website (http://www.dutb.eu/si/terjatve.aspx); KYC Forms F. Price for the purchase of the Claim, due date for payment, and payment method The bidder must clearly specify the final price of the Claim held by the Seller against the Company (e.g.: the offered price for the purchase of the Seller s claim against the Company A.D. ELEKTROTEHNA - PODGORICA, including accrued interest and accessory rights, is EUR [ ] (say: [ ] euros 00/100). In the bid, the bidder must describe the circumstances of the purchase of the Claim, along with the proof that the potential investor has or will have at their disposal adequate funding for the purchase of the Claim, whereas the potential investor must also specify the actual source of the funding for the purchase of the Claims (for example: a statement from the bank confirming a bank deposit has been made by the potential investor, a statement from the bank confirming the purpose of financing, etc.). The Bidder must declare the due date for payment, expressed in days following the signing of the contract on the sale of the Claim. If the final due date for payment falls on a public holiday, the first business day to follow shall count as the final date for payment. The binding bid, along with the binding declarations regarding available funds, must be valid no less than 90 days from signing the contract of sale with the winning bidder in this Claim sale process. 3

If the bidder is a foreign legal entity, they must provide an extract from the relevant commercial register in which the company is registered as a legal entity, whereas the extract from the relevant registry may be older than 30 days. Offers must be submitted in Slovenian or English. Each bidder may submit no more than one bid for the purchase of the Claim. In the event that the bidder should submit more than one purchase bid, all bids submitted by the same bidder will be disqualified. 2.2. Due diligence Bidders will have the option of carrying out a due diligence review of the underlying documents relevant to the Claim, provided that: - they have signed a Non-Disclosure Agreement ( NDA ), where the signatory s signature on the NDA will be certified by a notary public, which the Seller will distribute to interested bidders upon written request; and - they have paid the 50,000.00 EUR security deposit into the Seller s bank account held with UniCredit banka d.d., number SI56 2900 0005 1319 162, SWIFT: BACXSI22, using the reference no. SI 00 2005-527754. The bidder must also provide the Seller with details of the bank account to be used for returning the paid security deposit (without interest) in case the bidder s bid for the purchase of Claims is unsuccessful. It will be possible to carry out the due diligence process during the period between 02 February 2018 and 03 May 2018 (inclusive), until 14.00 hours. The due diligence review shall be performed by electronic means, on a 24-hours-a-day basis. During this period the bidders will have the possibility to submit written questions. Written responses to any question from any bidder participating in the process have to be distributed to all other participants. In simple cases, the response time shall be no less than 5 days, and 8 days in the case of more complex cases. The Seller reserves the right to deny any individual bidder access to the Documentation, without providing a reason, or to withhold, or prevent access to, specific information. The Bidder is aware of and agrees to the fact that the due diligence review is possible only with respect to the most essential of documents related to currently active court proceedings between the Seller and the Company. Upon the written request submitted by the bidder who has paid the security deposit and is in the process of performing due diligence, the Seller shall make all reasonable efforts to provide for the remaining legal documentation to be reviewed (currently in the keeping of an external lawyer). The Seller shall not accept any liability, and the Bidder shall have no claims (for damages) against the Seller if the documentation obtained is incomplete. Bidders will be given the opportunity to review the draft agreement on the sale and purchase of the claims during the due diligence review period, and submit any comments to the Agreement, as appropriate. The agreement on the sale and purchase of claims shall be made in the form of a directly executable notarial deed or in another form, insofar as it is stipulated by law or expressly requested by Seller in its own discretion. 4

3. Opening of the binding binding bids The opening of the binding bids shall not be public. It is anticipated that the Seller will make a decision on the validity of binding bids received within 3-4 weeks following expiration of the bid submission deadline. 4. Signing the Agreement Within 3-4 weeks following expiration of the deadline for submission of binding bids, the Seller may, but is not obligated to, select the bidder who has submitted the most beneficial of suitable bids ( the winning bidder ) and sign an agreement on the sale of claims (hereinafter referred to as: Agreement ). The Seller reserves the right to invite bidders to improve or supplement their bids, or to continue individual negotiations with all bidders, or with only some of the bidders. The Claims Purchase Agreement shall also include a top-up clause (payment of the difference of the paid purchase price and the higher purchase price achieved in a subsequent sale) and a Re-sale clause (whereby the Buyer undertakes not to sell the Claim to specific related parties for a period of 5 years, as stipulated in the Act Defining the Measures of the Republic of Slovenia to Strengthen Bank Stability-ZUKSB), and a provision stating that the Seller may publicize the sale of Claim and disclose the Buyer s identity. The Seller reserves the right to choose no bidder, and shall not be obligated to execute any agreement or contract with any of the bidders regarding their participation in the procedure involving the sale of the Claim. The bidder will be selected based on the following criteria: final offered price for the purchase of the Claim, payment method and provisions regarding the contents of the agreement on the sale and purchase of the claim. The seller will apply its own judgment to determine whether the bid is suitable. In the event that multiple bidders should offer the same price, individual negotiations shall be conducted with such bidders, with the same bid selection criteria used for all such bidders. The security deposit shall constitute part of the purchase price and shall be considered equivalent to a down payment after the Agreement has been signed. The Agreement shall be executed in Slovenian. Timely payment of the purchase price shall be considered an essential element of the Agreement. In the event that the buyer should fail to pay the remaining amount of the purchase price (total purchase price minus the security deposit/down payment), the agreement shall be deemed rescinded and the Seller shall keep the paid security deposit/down payment. If the bidder selected by the Seller should fail to sign the Agreement within 15 days of receiving the Seller s invitation to do so, the security deposit shall be retained by Seller (i.e. it shall not be reimbursed to the selected bidder). In such cases, the Seller shall have the right (but not the obligation) to enter into an agreement with the bidder having submitted the second- or next-best binding bid, without having to repeat the invitation to tender for the purchase of the Claim. 5

The bidders whose bids have been found unsuitable by Seller or those that have submitted bids but were not selected by the seller will be reimbursed the full amount of the security deposit, interestfree, no later than by the third business day from the deadline for signing the Agreement, subject to the condition that the bidder has submitted a written statement with an indication of the bank account where the security deposit is to be refunded. In the event that the written statement is submitted later, the interest-free amount of the security deposit shall be refunded on the third business day after the written statement has been submitted with an indication of the bank account where the security deposit is to be refunded. In such a case, the security deposit shall not be considered as a down payment and the non-selected bidder is not entitled to demanding double the security deposit in compensation for not being selected. In accordance with the Agreement, the transfer of the claim will be finalized after the purchase price has been paid in full. All taxes and charges incurred in connection with the transfer/sale of the Claim, including any notarial fees, shall be paid by the winning bidder - the buyer. Claims are sold on an as-is basis, whereby all Seller s claims, including charges and accrued interest and accessory rights, to the full extent of the law, shall transfer onto the buyer. The Seller only guarantees for the existence of the Claim, but not the existence and recoverability of the collateral. If the buyer of the Claim is a foreign legal entity, it must provide to the Seller its unique ID number (company registration number) for the purpose of drafting the contract. This number is assigned by the AJPES Slovenian Business Register. If the buyer of the Claim is a foreign individual they must present their unique citizen identification number (EMŠO). 5. Miscellaneous The bidders shall cover the costs of their involvement in the public call for the purchase of the Claim or in the process of selling the Claim, as well as any associated costs, regardless of the result of the public call procedure. Seller reserves the right to revise the proceedings and conditions involved in the sale of the Claim. By participating in the public tendering procedure, bidders consent to the terms of the procedure. 6. Right of cancellation and exclusion of the Seller s liability The Seller reserves the right to change the process, individual steps involved, or other elements of the procedure, and may interrupt the collection of bids, selling or negotiations, whereas the Seller is released of all responsibility and the bidders shall have no claims against the Seller in this regard. The Seller reserves the right not to sign the Agreement with any bidder. The Seller s liability for damages is entirely excluded. 7. Additional information Potential bidders seeking further information may contact the Seller s representative, Mr Tomaž Resnik, tel. no.: +386 1 42 93 863, e-mail: tomaz.resnik@dutb.eu. 6

8. Applicable Law and Jurisdiction The public tendering procedure or this publication, procedures involved in this invitation to tender, collection of bids and the Agreement on the sale of the claim shall be subject to the laws of the Republic of Slovenia. In the event of any disputes, the matter shall be resolved by the competent court in Ljubljana. This Call is published in Slovenian language. Družba za upravljanje terjatev bank, d.d. 7