Information regarding the buyout of shares of ESO and Ignitis gamyba

On 18 May 2020, Ignitis Group, an international energy company, started the mandatory buyout of shares of its subsidiaries Energijos Skirstymo Operatorius (ESO) and Ignitis Gamyba.

The mandatory buyout of shares of Ignitis Gamyba was finished on 17 August 2020, the mandatory buyout of shares of ESO was finished on 3 November. Transactions were completed on the second day following the conclusion of the transaction.

At the time of the mandatory buyout, the Company offered the prices agreed with the Bank of Lithuania for the shares, which were the same as those paid during the non-competitive tender offers. The price of EUR 0.880 per share was paid for shares of ESO and the price of EUR 0.640 per share for Ignitis Gamyba shares.

The shares of ESO and Ignitis Gamyba were bought from shareholders on the Nasdaq Vilnius Tender Offer Market in accordance with the rules of the regulated market of Nasdaq Vilnius.

In case the shareholders did not sell their shares of ESO and Ignitis Gamyba by the end of the mandatory buyout term, Ignitis Goup, after having made payments to the deposit account of shareholders who did not sell shares, has the right to apply to court within 30 days from the end of the mandatory buyout of shares, requesting that the account managers of the shares make records on the transfer of ownership of shares to Ignitis Group. which it did by submitting the relevant statements to the Vilnius District Court in the autumn of 2020.


Information about the procedure of the case on the transfer of the ownership rights of ESO shares

Ignitis Group, after making payments for the remaining ESO shares of shareholders who did not sell their shares to the deposit account, in autumn 2020 submitted a statement to Vilnius District Court with a request to recognise its right of ownership of these shares.

On 2 April 2021 Vilnius District Court made a decision to approve Ignitis Group’s statement on the establishment and recognition of a fact of legal significance that the right of ownership of all unsold shares during the mandatory buyout of ESO shares are the property of Ignitis Group and obliged the shares account managers to make records of the transfer of the rights of ownership to Ignitis Group. The document of the Court’s decision announced here.

Ignitis Group believes that the Court’s decision is lawful and reasonable and that it fully complies with the requirements of legal acts. The Court allowed the decision to be enforced urgently, however, the Court’s decision may be appealed within 30 days from the moment of its adoption.
 

Settlement with minority shareholders

Regarding the fact that the Court allowed the decision to be enforced urgently, the payout for shareholders will be initiated immediately, without waiting for the decision to take effect. ESO's minority shareholders holding shares in private accounts will be transferred money for the shares by their share account managers on 15 April.

ESO shareholders who hold shares in the issuer’s accounts must contact SEB bank from 15 April and make a request to transfer the money for the shares to the indicated cash account:

  • SEB bank clients could do that at SEB bank branches or at SEB internet bank. It should be indicated which company’s shares must be paid for and the number of the private account to which the money should be transferred
  • Non-SEB bank customers can submit a request to transfer the money for the shares by booking a meeting time at SEB bank’s branch in advance. Persons must have an identity document at the time of the visit.

We remind you that the settlement price per one ESO share is equal to EUR 0.88. Funds for the shares will be kept in the deposit account until the final settlement with all shareholders, i.e. there is no final date when the shareholders must apply for the settlement for the shares.
 

Dividends for the year of 2020

The Ordinary General Meeting of Shareholders of ESO held on 30 March, 2021, adopted the resolution (link) to distribute the profit (loss) of ESO for 2020 and to allocate dividends for ESO shareholders of EUR 0.062 per share of ESO for the year of 2020. Only the persons who are shareholders at the end of the rights accounting day of the ESO's shareholders, i.e. at the end of 14 April 2021, shall have the right to receive dividends. The dividends will be paid to such persons in accordance with the provisions of Article 60 (5) of the Law on Companies of the Republic of Lithuania, i.e. within one month from the day of adoption of the decision to pay dividends, to the managers of the ESO shareholders' securities accounts through the Lithuanian branch of Nasdaq CSD SE.

Ignitis Group confirms that, notwithstanding the positive decision of the Court on the transfer of ownership to the Company, all persons who are shareholders of ESO at the end of 14 April 2021 (inclusive) will receive dividends.  
 

More information in case there are additional questions

All relevant information about the procedure of the case and answers to frequently asked questions will be available on the websites of the Company (link) and ESO (link).

Should you have additional questions, please contact:

regarding the payment for shares:

  • to shareholders who hold ESO shares in their personal securities account – your securities brokerage
  • to shareholders who hold ESO shares in the issuer’s accounts – SEB bank (Tel. +370 5 268 2800)

other inquiries:

Information about the procedure of the case on the transfer of the ownership rights of Ignitis Gamyba shares

Ignitis Group, after making payments for the remaining Ignitis Gamyba shares of shareholders who did not sell their shares to the deposit account, in autumn 2020 submitted a statement to Vilnius District Court with a request to recognise its right of ownership of these shares.

The Court divided the statement regarding Ignitis Gamyba shares into to separate cases – a case where the stakeholders are the deceased shareholders of Ignitis Gamyba and a case where the stakeholders are all the remaining shareholders of Ignitis Gamyba. The statement of the excluded case where the stakeholders are all living shareholders of Ignitis Gamyba was approved be the Court on 15 March 2021 and a civil case was filed (more about the process of the case). However, the case with the stakeholders being the deceased shareholders of Ignitis Gamyba is yet to be filed because the Court is waiting for the confirmation of data on the persons who were transferred the rights of the deceased shareholders. 

All significant information about the procedure of the case is published at the websites of Ignitis Group and Ignitis Gamyba. The shareholders will also be informed about the remaining procedural actions according to the procedure set out in the Code of Civil Procedure in the manner selected by the Court.


Information regarding the mandatory buyout of ESO and Ignitis gamyba shares
Information about the procedure of the case on the transfer of the ownership rights of ESO shares


Most important related news:

Delisting decision of 11 November 2019
Recommendation of 28 February 2020 to prepare for the IPO of “Ignitis Grupė“
Information of 17 March 2020 about the Settlement Agreement that has been entered into with the representatives of the minority shareholders
On 23 March 2020, the preparation for the IPO of “Ignitis Grupė“ has begun
On 31 March 2020, the Bank of Lithuania approved the circulars of official tender offers
On 2 April, the start of the official tender offer for shares of ESO and Ignitis gamyba
On 23 April, information regarding the end of official tender offers

For further questions, please contact:

Answers to FAQs following the mandatory buyout

I did not sell any shares during the mandatory buyout. Can I still do that?

Following the mandatory buyout, Ignitis Group, after having made payments to the deposit account of shareholders who did not sell their shares, will apply to court regarding the transfer of ownership of shares. Therefore, no active efforts of shareholders are needed so far. It should be noted that this will not cause financial consequences to the shareholders as the money for the shares will be transferred from the deposit account upon request.

Did Ignitis Group apply to court with the request to recognize its ownership of the remaining unsold shares of ESO and Ignitis Gamyba? Which court was applied to and what is the status of the process?

Ignitis Group, after having made payments to the deposit accounts of the shareholders who did not sell their shares, applied to Vilnius District Court in the autumn of 2020 with the request to recognize its right of ownership of these shares. The statement regarding ESO case is approved by the court, considering the very large number of shareholders, the statement regarding Ignitis Gamyba is not approved by the court yet. The shareholders will be informed about the ongoing processes according to the procedure set out in the Code of Civil Procedure. Ignitis Group will also publish the information about the key ongoing processes on its website.

What amount will I receive for one share of ESO and one share of Ignitis gamyba if Ignitis grupė makes a payment to my as the shareholder’s who did not sell shares deposit account?

The shareholders who did not sell shares during the mandatory buyout will be offered the prices which are the same as those paid during the mandatory buyout. The price of EUR 0.880 per share will be paid for ESO shares and EUR 0.640 per share for Ignitis Gamyba shares.

What steps do I need to take to receive payment for unsold shares?

The shareholders will need to contact SEB bankas and complete a request to transfer money for the shares to the specified cash account.

When I will receive money to my account for the redeemed shares of ESO and/or Ignitis gamyba?

Upon submission of the request to SEB Bankas, the funds from the deposit account will be transferred to the cash account of the shareholder specified in the request within 5 business days from the date of submission of the request to the Bank accompanied by the information required for making a cash transfer.

Will I incur additional costs due to litigation?

No, the costs of court proceedings will be paid by Ignitis Group.

How will proceeds transferred to my account from Ignitis Group for the shares not sold during the mandatory buyout be taxed?

I. For an individual, who is the resident of the Republic of Lithuania (hereinafter – the LR), having sold the securities: the purchase price shall be deducted from earnings on the sale of securities, and the resulting gains generated on the securities that do not exceed 120 average wages, shall be subject to the personal income tax (hereinafter – the PIT) at a rate of 15%, and the gains that exceed 120 average wages, shall be subject to the PIT at a rate of 20%. These proceeds of the resident are classified as Class B proceeds, i.e. the PIT shall be calculated and paid by the resident himself/herself by submitting annual income tax return GPM308. Annual tax-free amount of EUR 500 may be applied to taxation of earnings from sale of securities, and such amount may be used by the LR individuals when submitting the annual income tax return.

II. For an individual (who is not the LR resident) having sold the securities: such sale of securities is not an object in Lithuania and, therefore, non-taxable. A company, having acquired securities from a foreign resident, shall declare as income of Class B in Annex U to the annual income tax return GPM312.

 III. For a legal entity of the LR having sold securities: whereas the shares sold do not carry more than 10% of the votes, the General Rules for the sale or other transfer of assets shall apply – the purchase price of securities shall be deducted from the proceeds from the sale, and the resulting proceeds from the increase in the value of the assets shall be subject to the PIT at a rate of 15%. The liabilities of taxation, payment of taxes and declaration lie with a legal entity that has sold the securities.

 IV. For a foreign legal entity having sold securities: a foreign legal entity shall tax the transfer of shares of LT company in its country in accordance with the legal requirements of that country. Proceeds of a foreign entity from the sale of securities shall not be subject to taxes withheld at source.

Can I challenge the judicial proceedings of Ignitis Group regarding the transfer of my holding of shares to it?

All shareholders who did not sell their shares will be admitted to the proceedings as third persons and, therefore, will be able to lodge a reply to the allegation presented by Ignitis Group.

I did not sell my shares during the mandatory buyout due to force majeure; can I still do it for the same price that was paid for the shares at the time of the mandatory buyout?

Regardless of the reason, Ignitis Group holds the right to apply to the court regarding the shares of shareholders who did not sell their shares during the mandatory buyout. Therefore, no active efforts of shareholders are needed. It should be noted that this will not cause financial consequences to the shareholders. The shareholders will need to contact SEB Bankas and complete a request to transfer money for their shares to the specified cash account.