AAA

Current report:

Signing of a major contract in my subsidiaries

Report number: 16/2008 day: 2008-06-18

Legal basis

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

Contents of the report:

The management of Barlinek S.A. ("the Company") hereby announces that on June 17th 2008 it received information that a debt restructuring contract (henceforth referred to as “the Contract”) had been signed between S.C. Barlinek Romania SA (previously: SC DIANA FOREST S.A.), a dependent of Barlinek S.A. founded and operated according to Romanian law and based at Calea Moinesti nr 30 H in Bacau (Romania) included on the companies register under number JO4/442/1994 as a Debtor, and BCDF Ltd (previously "CAUSE AND EFFECT" Ltd) a 100% dependent of Barlinek S.A. founded and operated according to the laws of the Republic of Cyprus, based at Themistokli Dervi 48, Centennial Building, 1066 Flat/Office 701, Nicosia, Cyprus, registered under HE 211277 as a Creditor.

The subject of the Contract is the restructuring of the debt acquired by BCDF Ltd from the Spanish companies EUROGALIA S.L., based in la Coruna, and TRIPLE GEST S.L., based in Madrid on the basis of the debt transfer contract of January 31st 2008, amended on June 4th 2008 (henceforth referred to as the Debt Transfer Contract), as announced by the Company in current report no. 7/2008. In accordance with the text of the Contract, the main sum of liabilities, with a book value of EUR 51,489,450.58 (in full: fifty one million four hundred and eighty nine thousand four hundred and fifty euro), will be converted to initial capital of SC Barlinek Romania SA, while the book value of the interest earned on the basis of the liability transfer contract and calculated for the period from February 1st 2008 until the day the contract was signed, i.e. June 16th 2008, with a total value of EUR 20,284,318.52 (in full: twenty million two hundred and eighty four thousand three hundred and eighteen euro), is to be remitted. The extinction of the interest will be performed under a suspension condition in the form of BCDF Ltd assuming shares in the increased initial capital of SC Barlinek Romania SA. The remittance of the interest comes into effect on the day the Contract is signed.

In accordance with the text of the Contract, SC Barlinek Romania SA undertakes to introduce a development plan consisting of diversification, modernization and the introduction of a plan for restructuring the existing production capacity of SC Barlinek Romania SA, while simultaneously increasing the manufacturing potential to 2,500,000 square metres of flooring per annum. The contract contains no resolutions regarding contractual penalties whose maximum value could exceed the equivalent of at least 10% of the value of this contract, or of at least the equivalent of 200,000 euro expressed in zlotys according to the average rate established for a given currency by the National Bank of Poland on the day the contract was signed. The payment of contractual penalties does not exclude the right to pursue indemnity claims for sums greater than the value of these penalties.

This is considered to be a major contract, as the value of the liabilities resulting from it exceeds 10% of Barlinek SA’s equity capital.