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The Board of Directors of Plynostav Pardubice JSC announces that on June 5th 2014 at the Regional Court in Hradec Králové (Pardubice Branch Office), the request for opening of insolvency proceedings and the proposal to permit of the reorganization of the company were submited.

The Board did so for the obligations arising from the provisions of § 98 of Act No. 182/2006 Coll. Bankruptcy and Its Solution (The Insolvency Act). The cause of the adverse economic situation of Plynostav Pardubice JSC is the current development and obstacles occured on both domestic and foreign markets.

 

The specific causes of the current situation can be summarized as follows:

 

1. Delaying and particular threat of the implementation of critical projects for premeditated production content of the company in 2014 as a result of the Ukrainian crisis and sanctions from the EU, consisting in the effort to halt the construction of the transit pipeline South Stream on the Bulgarian territory.


2. Delay of investment projects in Poland, where Plynostav Pardubice JSC has been long term operating and has qualification certificates, necessary for the implementation of public contracts.


3. Despite the large expenditures on rehabilitation of past commitments, Plynostav Pardubice JSC failed to restore the historical position and trust of business partners on the Czech gas market.

 

The current situation is to be solved by the company reorganization within the insolvency proceedings, specifically by the input of another strategic partner and penetration into promising foreign markets. This will lead to the stabilization of the production program, providing and increasing of the operational financing credit line and partial debt relief.

 

In Pardubice, on June 5, 2014                             Board of Directors Plynostav Pardubice a.s.