AAA

Current report:

Signing of a significant contract by a dependent company

Report number: 60/2006 day: 2006-11-07

Legal basis

Art. 56 par. 1 pt 2 of the Bidding (current and periodic information) Act

Contents of the report:

The management of Barlinek S.A. hereby announces that on November 6th 2006 Barlinek Invest ltd, based in Vinnitsa in Ukraine, (a dependent body of Barlinek S.A.) signed a contract with the European Bank for Reconstruction and Development (“the Bank”) for investment credit and renewable credit to finance turnover capital. This credit is intended to jointly finance the construction of the floorboard factory in Vinnitsa in Ukraine.

The sum of credit may not exceed 38,924,966 EUR, i.e. a total of 148,965,844.88 PLN according to the NBP’s average rate published on 06.11.2006 (1 EUR = 3.8270 PLN) or the equivalent of this sum in American dollars (USD). The interest has been set according to the Bank’s rate (EURIBOR 6M for EUR and LIBOR 6M for USD) increased by the Bank’s profit margin. Repayment of the credit will take place in 10 equal instalments in the years 2008 - 2013.

The contract is guaranteed by:

• liens on shares in Barlinek Invest ltd.,
• liens on shares in Barlinek Cyprus ltd. (a dependent body of Barlinek S.A.),
• mortgages and liens on shares in Barlinek Invest ltd.,
• a guarantee by Barlinek S.A. valid for a period of no less than half a year and no longer than a year.

Barlinek S.A. will additionally grant sponsor support and an off-take agreement will be signed.

The contract contains no stipulations regarding contractual penalties. The conditions of the contract do not differ from the conditions generally applied for this type of contract. A suspension condition for the realisation of the contract is registration of the Contract with the National Bank of Ukraine.

The contract is considered significant as the value of the contract exceeds 10% of the ownership capital of Barlinek S.A.