EFSA Litigation - case no. 1927/2/2019

Societatea Energetica Electrica SA

18 August 2023

 

To:                              Bucharest Stock Exchange (BSE)

                                    London Stock Exchange (LSE)

Romanian Financial Supervisory Authority (FSA)

Current report in compliance with the Law 24/2017 on issuers of financial instruments and market operations, the Romanian Capital Market Law no. 297/2004, FSA Regulation no. 5/2018, and the Bucharest Stock Exchange Code

Report date: 18 August 2023

Company name: Societatea Energetica Electrica S.A. (Electrica)

Headquarters: 9 Grigore Alexandrescu Street, 1^st District, Bucharest, Romania

Phone/fax no.: 004-021-2085999/004-021-2085998

Fiscal Code: RO 13267221

Trade Register registration number: J40/7425/2000

Subscribed and paid in share capital: RON 3,464,435,970

Regulated market where the issued securities are traded: Bucharest Stock Exchange (BSE) and London Stock Exchange (LSE)

Significant events to be reported: Litigation Electrica Furnizare S.A. (EFSA) file 1927/2/2019, Bucharest Court of Appeal

Electrica informs shareholders and investors that Electrica's subsidiary, Electrica Furnizare S.A. (EFSA), was introduced in the case which is the object of the file no. 1927/2/2019 (Bucharest Court of Appeal) as a forced intervener (defendant). EFSA was summoned for the term of 23 October 2023.

The object of the court file no. 1927/2/2019 is the request submitted by SPEEH Hidroelectrica S.A. against ANRE, through which SPEEH Hidroelectrica S.A. requested:

i.          the partial annulment of the ANRE President's Decision no. 324/25.02.2019 regarding the establishment of regulated prices for delivered electricity and quantities of electricity sold based on regulated contracts between 1 March 2019 and 31 December 2019 by SPEEH Hidroelectrica S.A.;

ii.         issuing a Decision approving the regulated price for the electricity sold by SPEEH Hidroelectrica, between 1 March 2019 and 31 December 2019, based on regulated contracts concluded with suppliers of last resort in compliance with legal provisions;

iii.        the payment to Hidroelectrica of the amounts representing the damage suffered as a result of the effects of the ANRE President's Decision no. 324/25.02.2019, the amount to which is added the legal interest related to the loss suffered, damage related to the period 1 March 2019 to 31 December 2019.

We mention that ANRE requested the introduction in the case as forced interventionist of the following last resort suppliers: Cez Vânzare S.A., Enel Energie S.A. (with the licensed areas Banat and Dobrogea), Enel Energie Muntenia S.A., E.ON Energie România S.A., Electrica Furnizare S.A. (with its branches Electrica Furnizare Muntenia Nord, Electrica Furnizare Transilvania Sud, Electrica Furnizare Transilvania Nord)., and the court admitted the request to bring the suppliers of last resort into the case.

As the time of this announcement, the litigation is in the evaluation process within the legal department.

From a preliminary analysis: (i) of Hidroelectrica's claims, it results that for the contracts concluded with Electrica Furnizare, the differences would be to approximately 77.85 million lei; (ii) in relation to the claims from the legal action, it turns out that for Electrica Furnizare, in the situation in which the court would order the obligation of ANRE to issue a new Decision regarding the regulated price for the energy purchased by Electrica Furnizare from SPEEH Hidroelectrica in the period 1 March 2019 - 31 December 2019 on the basis of regulated contracts, because this court decision, doubled by the issuance of a new ANRE Decision, could lead to the triggering of other litigations regarding the status of these contracts and in relation of the regulated price differences.

According to what was presented by SPEEH Hidroelectrica, in the public offer prospectus in June 2023: "The resolution of the case (1927/2/2019) is significantly influenced by the decision pronounced by the court for the appeal filed by Hidroelectrica against ANRE Order no. 10/2019 regarding the approval of the pricing methodology (file no. 1170/2/2019). Because the appeal that was the subject of file no. 1170/2/2019, was rejected by the final decision of the High Court of Cassation and Justice, Hidroelectrica anticipates that the decision in file no. 1927/2/2019 will be unfavorable".

In the event that, following the analysis carried out by the legal department, additional information will result that will lead to a different conclusion on the possible outcome of the litigation, Electrica will inform the shareholders and investors.

Contact IR: [e-mail] ; [phone]

Head of Legal

Stefania Andruhovici

 

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