Delisting

Material events:

For the additional information please contact:
Aine Riffel, “Ignitis Group” Investor Relations Representative
E-mail aine.riffel@ignitis.com

FAQ

Information to shareholders on delisting of ESO and Ignitis gamyba

On 11 November, the international energy company Ignitis Group announced the plans to initiate official tender offers of the subsidiaries Ignitis gamyba and Energijos skirstymo operatorius (ESO) followed by the mandatory redemption of shares. In order to provide the relevant information to the shareholders and investors related to the initiated delisting process, Ignitis Group provides frequently asked questions (FAQ) below.

Why does the listing is carried out?

The delisting of the subsidiaries is initiated in order to purify the capital structure of Ignitis Group. It is needed in order to ensure the most effective financing. Also, the process is related to the planned UAB Ignitis grupe IPO. More information about this is available: https://ignitisgrupe.lt/en/possibility-list-shares-ignitis-group-stock-exchange-market-be-considered

When it was decided to redeem the shares of the minority shareholders of ESO and Ignitis gamyba?

The decisions regarding official tenders, that will be followed by the mandatory redemption of shares, were concluded on 4 December during the General Meetings of Shareholders of Ignitis gamyba and Energijos skirstymo operatorius.

Are the rumours on the UAB Ignitis group IPO is realistic?

Yes. The Working group is assigned by the Ministry of Finance to assess the UAB Ignitis grupe long-term financing alternatives and their impact to the expectations of the shareholder, implementation of the National Energy Independence Strategy, the Company's long-term financial sustainability and strategy 2030, also economic, social, national security and capital market development. As a result, Working group is expected to submit recommendations to the Ministry of Finance by the 1 March regarding alternatives for the Company's long-term financing, including raising equity in both national and international capital markets.

How the transparency of ESO and Ignitis gamyba will be affected after their delisting?

This will not affect the transparency of the companies. Due to the Ignitis Group green bonds being listed on Nasdaq Vilnius and Luxembourg Stock Exchanges, company is subject to the highest standards of transparency which are also applicable to its subsidiaries.

Ignitis Group and its subsidiaries already publishes more information than is required by Nasdaq Stock Exchange and legislation. It is not planned to be changed in the future.

ESO and Ignitis gamyba will continue to publish information to the same extent and format in order analysts, investors and the society be able to access it.

Why Ignitis Group applied the management fee to ESO?

Management of the Ignitis Group is based on the integrated management principles - organizational structure, employee performance management, business processes, and the established principles of risk management and control. Integration of key competencies ensures the most efficient coordination and cooperation, best practices sharing within Ignitis Group companies.The management services agreement between the holding company and ESO is not new. As the previous management services agreement (was concluded in 2016) expired in May this year, a new 3-year contract was signed. Contract value of EUR 6 million is the maximum amount which can be used for the management services (management fee is billed on the actual services provided which are monitored on a monthly basis). Information on the concluded management services contract between the holding company and ESO was published in accordance with the procedure established by the Law of the Republic of Lithuania on Companies, i.e. it was published on ESO website in the “For Investors” column (the link). Based on the applicable regulation, for this concluded agreement notification through the stock exchange was not released as it was not classified as a material event, making a significant effect to the company’s finance, assets, and liabilities.

Will the profit from the shares sold during the delisting be taxed?

Yes. Profit taxation is a standard practice that applies as defined by the Law of the Republic of Lithuania on Personal / Corporate Income Tax. It should be noted, that only the profit from the sale of shares is taxed, i.e. tax is applicable on the difference between proceeds from the sale of shares and their purchase price.