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Delisting

Regarding the beginning of the processes of mandatory buyout of shares of Energijos Skirstymo Operatorius AB

ESO informs about the start of the mandatory buyout of shares on 18 May 2020.  73,676,107 units of ESO ordinary registered shares giving voting rights, which account for 97.66%. (i.e. more than 95%) of all ESO shares, respectively holds 97.66%.votes at the general meeting of shareholders of ESO. 

All remaining shareholders of ESO must sell their shares to Ignitis Grupė within 90 calendar days from the public announcement of this notification. The last day when the shares can be sold under the mandatory buyout is 17 August. 

At the time of the mandatory buyout of shares, the Ignitis grupė offers the prices agreed with the Bank of Lithuania for the shares, which are the same as those paid during the non-competitive tender offers. At the time of the mandatory buyout, EUR 0.880 will be paid for one ESO share. 

The buyout of ESO shares will be conducted on the Nasdaq Vilnius tender offer market in accordance with the rules of the Nasdaq Vilnius regulated market. Shareholders may give orders for their securities account manager, and those who do not have a securities account management agreement should apply to a securities account manager of their chose for such an agreement and submit an order to sell shares during the mandatory buyout. Orders can be submitted during the entire mandatory buyout. Transactions for the sold shares will be concluded during the last day of the mandatory buyout (August 17, 2020). Completed transactions will be settled on the second day following the conclusion of the transaction. 

In the case the shareholders do not sell their shares of ESO by the end of the mandatory buyout, i.e. 17 August 2020, Ignitis Grupė, after having made payments to the deposit account of shareholders who did not sell shares, will acquire the right to apply to the court, requesting that the account managers of the shares make records on the transfer of ownership of shares to Ignitis Grupė, which it did by submitting the relevant statements to the Vilnius District Court in the autumn of 2020.

Relevant information on share buy-out is published at https://www.ignitisgrupe.lt/en/delisting

Information about the official tender offer and benefits to the shareholders

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
Information of 17 March 2020 about the Settlement Agreement that has been entered into with the representatives of the minority shareholders
On 31 March 2020, the Bank of Lithuania approved the circulars of official tender offers 
On 22 April 2020 the official tender offer for the shares of the subsidiary ESO has ended

Relevant information on share buy-out is published at https://www.ignitisgrupe.lt/en/delisting

 

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.

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