Current report 16/2014

Legal basis: Article 56 (1) (2) of the Act on Public Offering — current and periodic information

In relation to the publication of a draft resolution submitted by a shareholder to the General Meeting of Shareholders of ATM S.A. to be held on 16 July 2014, the company received an enquiry from a shareholder concerningthecompany’s ability to paya dividend of the proposed amount.

The Management Board of ATM S.A. provided the following response to the shareholder:

“The payment of a dividend of the amount proposed by one of the shareholders of ATM (in the submitted draft resolution), while at the same time maintaining the Company’s financial security, is not possible. As shareholders have been informed, ATM S.A. is carrying out an important investment project which aims, among other things, to bring about a significant increase in revenue from colocation services. The Company’s capital expenditure in 2014 will total more than 65 million zlotys (PLN). Taking account of the subsidy received and current operating revenue, the management board estimates that in 2014 the Company’s debt will rise by approximately PLN 20million. This estimate is based on the management board’s proposed dividend of PLN 0.12 per share (PLN 4.3m in total). The management board’s projected financial flows are such as to allow the company to enjoy continued secure growth, carry out its investment plans, obtain essential European Union subsidies, and create the potential to increase significantly its revenues and profits.

An increase in that dividend in 2014 by the additional PLN 14.2m proposed by the shareholder would be hard for the Company to manage. In particular, there would be a serious risk of its breaching the covenants contained in its credit agreements, which might lead to termination of those agreements or an increase in debt servicing costs. In any case, the Company’s creditworthiness and financial security would suffer significantly as a result. Considering the need to use debt to finance the last stage of investment in the first half of 2015, such a situation would be unsafe for the Company. As an alternative, the Company would be forced to increase its share capital by issuing new shares, which would not be a favourable solution for existing shareholders.

As the Company has previously announced, ATM S.A.’s main investment spending will end in 2015, and after 2015 the Company will be able to pay a significant part of its profit to shareholders in the form of dividends. To bring forward that date and to take a significant amount out of the Company’s general reserves would, in view of the scale of the investment currently being carried out, lack justification as regards the rational development of the company to the benefit of its shareholders. The profit earned by the Company in previous years can be paid out to shareholders in future years, following the completion of the most important investments in data centres, in such a way as to guarantee the financial security and stability of ATM S.A. in the watershed period of 2014/2015.

ATM S.A. Management Board therefore stands by its recommendation to limit the dividend paid for 2013 to a level of 0.12 PLN per share, and hopes that the shareholders present at the General Meeting of Shareholders of ATM S.A. on 16 July 2014 will take a decision in accordance with that recommendation and – in the management board’s view – in accordance with the Company’s interests.”

The report has been drawn up pursuant to §38(1)(5) of the Order of the Minister of Finance of 19 February 2009 on current and periodic information supplied by issuers of securities and conditions for the equivalence of information required by the laws of a non-member state (Dz.U. no. 33 item 259 as amended).

Signatures:
Maciej Krzyżanowski — President of the Management Board,
Tadeusz Czichon — Vice-President of the Management Board