Acquisition of KBC Towarzystwo Funduszy Inwestycyjnych SA by PKO BP Finat Sp. z o.o.
Description of the transaction
On 8 September 2017, PKO Bank Polski SA (as the guarantor) and PKO BP Finat Sp. z o.o. (as the acquirer) signed a preliminary agreement with KBC Asset Management NV (as the seller) on the purchase of 100% of shares in KBC Towarzystwo Funduszy Inwestycyjnych SA (KBC TFI). The transaction was closed on 12 December 2017, upon prior approval of the President of the Office for Competition and Consumer Protection (UOKiK), and Polish Financial Supervision Authority (KNF).
As a result of the aforementioned transaction, PKO BP Finat Sp. z o.o. purchased 25,257,983 ordinary shares in KBC TFI with a nominal value of PLN 1 (one) each, representing 100% of the share capital of KBC TFI and entitling it to 100% of the voting rights at the General Shareholders’ Meeting of the company. The purchase price amounted to PLN 32.9 million. The purchase of the shares was financed from PKO BP Finat Sp. z o.o.’s own funds.
The company’s core activities include creating and managing investment funds.
As a result of the acquisition of KBC TFI, the PKO BP Finat Sp. z o.o. Group included its subsidiary, Net Fund Administration Sp. z o.o. (NetFA), with its core activities comprising the provision of transfer agent services. As at 31 December 2017, the Company’s share capital amounted to PLN 6 652 500 thousand and is divided into 13 305 shares with a nominal value of PLN 500 each.
Ultimately, in 2018, KBC TFI is to be merged with PKO Towarzystwo Funduszy Inwestycyjnych SA, and NetFA is to be merged with PKO BP Finat Sp. z o.o.
The purpose of the acquisition of KBC TFI shares was for the Group to earn economic benefits by reinforcing the position of the subsidiaries of PKO Bank Polski SA in individual segments of the financial market. The planned merger with KBC TFI will accelerate the hitherto dynamic development of PKO TFI and will reinforce its ability to offer customers various attractive forms of investing.
Settlement of the acquisition transaction
The transaction was settled using the acquisition method in accordance with IFRS 3, the application of which requires: identifying the acquirer, determining the date of acquisition, recognizing and measuring identifiable assets acquired, liabilities assumed measured at fair value as at the date of acquisition, and all non-controlling shares in the acquiree, as well as recognizing and measuring goodwill or gains from occasional purchase.
Given that the assumption of control over KBC TFI and its subsidiaries occurred on 12 December 2017, the purchase transaction was settled based on KBC TFI financial statements as at 11 December 2017.
The purchase price of KBC TFI SA shares was determined in the amount paid in cash (PLN 32.9 million). As at the date of preparing the consolidated financial statements of the Group for 2017, a preliminary, temporary valuation of the purchase transaction settlement was carried out. The final transaction settlement may differ from the preliminary settlement presented in these financial statements. In accordance with IFRS 3.45, the Group has 12 months – i.e. to 11 December 2018 to determine the final amounts.
As a result of the settlement of the purchase of KBC TFI shares, a gain from a bargain purchase was recognized constituting the difference between the consideration transferred and the net amount of identifiable assets acquired, and the liabilities assumed were measured in accordance with IFRS.
| SETTLEMENT OF THE ACQUISITION TRANSACTION | 12.12.2017 |
|---|---|
| Fair value of consideration transferred | 33 |
| Fair value of net assets acquired | (35) |
| GAIN FROM A BARGAIN PURCHASE1 | (2) |
1 negative value as a result of the excess of net assets fair value over the fair value of the payment transferred.
Other changes to members of the Group and to other subordinated entities.
In 2017, the following events which had impact on the Group’s structure and relating to joint ventures and associates, including capital injection, took place.
ZenCard Sp. z o.o.
On 26 January 2017, PKO Bank Polski SA purchased 1 374 shares in ZenCard Sp. z o.o. with a nominal value of PLN 50 PLN each, representing 100% of the company’s share capital and 100% shares at the shareholders’ meeting. At the same time, on 26 January 2017, the Extraordinary Shareholders’ Meeting of ZenCard Sp. z o.o. (represented by PKO Bank Polski SA as the sole shareholder) adopted a resolution on increasing the company’s share capital by PLN 22 050 by creating 441 new shares with a nominal value of PLN 50 each. The said changes were registered in the National Court Register on 14 March 2017.
As at 31 December 2017, the company’s share capital amounted to PLN 90 750 thousand and was divided into 1 815 shares with a nominal value of PLN 50 each.
ZenCard Sp. z o.o. is a technological company. The Bank is interested in using the company’s and its founders’ know-how in respect of solutions developed by the company, in particular in respect of creating loyalty programmes with the use of payment cards and supporting its own promotional campaigns.
As a result of the settlement of the purchase of ZenCard Sp. z o.o. shares, goodwill was recognized constituting the difference between the consideration transferred and the net amount of identifiable assets acquired, liabilities assumed measured in accordance with IFRS.
| SETTLEMENT OF THE ACQUISITION TRANSACTION | 26.01.2017 |
|---|---|
| Fair value of consideration transferred | 14 |
| Fair value of net assets acquired | 2 |
| GOODWILL | 12 |
PKO Bank Hipoteczny SA
In 2017 (on 12 April, 11 September, and 16 November, respectively) an increase of the company’s share capital totalling PLN 400 000 000 was recorded in the National Court Register (KRS). All shares in the increased share capital were taken up by the existing sole shareholder, PKO Bank Polski SA. As at 31 December 2017, the company’s share capital amounted to PLN 1 200 000 000 thousand and was divided into 1 200 000 000 shares with a nominal value of PLN 1 each.
NEPTUN – fundusz inwestycyjny zamknięty aktywów niepublicznych (FIZ AN)
On 25 April 2017, PKO Bank Polski SA purchased 2,000,000 E-series investment certificates issued by NEPTUN – fundusz inwestycyjny zamknięty aktywów niepublicznych (closed-ended investment fund of non-public assets).
“Inter-Risk Ukraina” additional liability company
On 28 April 2017, PKO Bank Polski SA sold within the Group, 100% of its shares in the share capital of “Inter-Risk Ukraina” an additional liability company, of which: 99.9% shares – to Bankowe Towarzystwo Kapitałowe SA, and 0.1% to Finansowa Kompania “Prywatne Inwestycje” Sp. z o.o.
On 28 April 2017, an amendment to the Articles of Association of “Inter-Risk Ukraina” additional liability company with the aforesaid ownership changes was registered in the Single national register of legal entities, individuals-entrepreneurs and organizations of the Ukraine.
Bankowe Towarzystwo Kapitałowe SA
On 18 July 2017, the company’s share capital increase of PLN 30 000 000 was registered in KRS. All shares in the increased share capital were taken up by the existing sole shareholder – NEPTUN – fundusz inwestycyjny zamknięty aktywów niepublicznych, whose 100% investment certificates are held by PKO Bank Polski SA.
As at 31 December 2017, the company’s share capital amounted to PLN 63 243 900 thousand and was divided into 632 439 shares with a nominal value of PLN 100 each.
PKO Finance AB
On 1 August 2017, the company’s share capital increase of EUR 5 491 884 was registered in the Swedish register of business activities (Bolagsverket). All shares in the increased share capital were taken up by the existing sole shareholder, PKO Bank Polski SA.
As at 31 December 2017, the company’s share capital amounted to EUR 5 547 358 thousand and was divided into 500 000 shares with a nominal value of EUR 11.09 each.
Qualia Development Sp. z o.o. Group
- Qualia Hotel Management Sp. z o.o.
On 6 February 2017, the company’s share capital increase of PLN 1 149 700 was registered in KRS. All shares were taken up and paid up in October 2016 by the existing sole shareholder – Qualia Development Sp. z o.o.
As at 31 December 2017, the Company’s share capital amounted to PLN 1 411 500 thousand and is divided into 28 230 shares with a nominal value of PLN 50 each.
- Sarnia Dolina Sp. z o.o.
On 6 April 2017, the company’s share capital increase of PLN 5 000 was registered in KRS. All shares were taken up by the existing sole shareholder – Qualia Development Sp. z o.o.
As at 31 December 2017, the company’s share capital amounted to PLN 6 979 000 thousand and was divided into 13 958 shares with a nominal value of PLN 500 each.
On 7 April 2017, the Extraordinary Shareholders’ Meeting of Sarnia Dolina Sp. z o.o. adopted a resolution on returning to Qualia Development Sp. z o.o. shareholder’s contributions totalling PLN 21 549 527 brought to the company in accordance with Art. 177-179 of the Commercial Companies Code. On the same day, the funds were transferred.
- Qualia spółka z ograniczoną odpowiedzialnością – Projekt 1 Sp. k.
On 10 March 2017, the company’s shareholders adopted a resolution on dissolving the company without liquidation proceedings. On 5 May 2017, the company was deleted from the National Court Register (KRS) (the date of deletion from KRS becoming valid).
- Qualia 2 spółka z ograniczoną odpowiedzialnością – Nowy Wilanów Sp. k.
On 27 April 2017, the company’s partners adopted a resolution on reducing the capital share of the limited partner – Qualia Development Sp. z o.o. by PLN 28 000 000 through the distribution of funds accumulated in the partnership’s reserves arising from additional contributions brought to the partnership in accordance with Art. 177-179 of the Commercial Companies Code, before transforming the entity from a limited liability company to a limited partnership. The funds were transferred in April 2017.
- Qualia 3 spółka z ograniczoną odpowiedzialnością – Neptun Park Sp. k.
On 12 September 2017, the company’s partners adopted a resolution on reducing the capital share of the limited partner – Qualia Development Sp. z o.o. by PLN 15 000 000 through the distribution of funds accumulated in the partnership’s reserves arising from additional contributions brought to the partnership in accordance with Art. 177-179 of the Commercial Companies Code, before transforming the entity from a limited liability company to a limited partnership. The funds were transferred in September 2017.
- Business combination of selected subsidiaries in the Qualia Development Sp. z o.o. Group
On 13 October 2017, a business combination of Qualia sp. z o.o. – Sopot Sp. k. and Giełda Nieruchomości Wartościowych Sp. z o.o. (the acquirees) with Qualia Sp. z o.o. (the acquirer) by transferring all the acquirees’ assets to the acquirer. The merger plan announced on 26 June 2017 in Monitor Sądowy i Gospodarczy, only provided for increasing the share capital of the acquirer and exchange of shares. Before the business combination in 2017 (on 18 January and 10 April, respectively) amendments to the Articles of Association of Qualia sp. z o.o. – Sopot Sp. k. were registered in the KRS, in respect of reducing the contribution of the limited partner – Qualia Development Sp. z o.o. from PLN 10 200 000 to PLN 2 200 000, including a reduction in the general amount from PLN 4 700 000 to PLN 2 200 000. The funds from the reduction in the limited partner’s contribution were returned to Qualia Development Sp. z o.o., including the amount of PLN 5 500 000 in December 2016. As at 31 December 2017, the share capital of Qualia Sp. z o.o. amounted to PLN 65 600 thousand and was divided into 1 312 shares with a nominal value of PLN 50 each. Qualia Development Sp. z o.o. is the company’s sole shareholder.
Relating to joint ventures and associates
- Bank Pocztowy SA Group
On 29 November 2017, an increase in the share capital of Bank Pocztowy SA of PLN 18 145 200 was registered in KRS. PKO Bank Polski SA took up 453 630 shares with a total nominal value of PLN 4 536 300 and with a total issue value of PLN 22 500 048. The remaining shares were taken up by Poczta Polska SA. Eventually, Bank Pocztowy SA received a capital injection from its existing shareholders amounting to PLN 90 000 192. As a result of the aforesaid share capital increase, PKO Bank Polski SA still holds 25% of the company’s share capital plus 10 shares. As at 31 December 2017, the share capital of Bank Pocztowy SA amounted to PLN 128 278 080 thousand and was divided into 12 827 808 shares with a nominal value of PLN 10 each. In 2017, the fact that Centrum Operacyjne Sp. z o.o. (a subsidiary of Bank Pocztowy SA) was put into liquidation, was registered in the KRS.
- Centrum Elektronicznych Usług Płatniczych eService Sp. z o.o. Group
In 2017 (on 11 January and 1 March, respectively) an increase in the share capital of EVO Payments International Sp. z o.o. totalling PLN 364 400 was recorded in the National Court Register (KRS). Shares in the increased share capital of the company were taken up in 2016 by the sole shareholder – Centrum Elektronicznych Usług Płatniczych eService Sp. z o.o. (a joint venture of PKO Bank Polski SA).
- FERRUM SA Group
In 2017, the fact that Walcowania Rur FERRUM Sp. z o.o. was put into liquidation, was registered in the KRS. The company is a subsidiary of FERRUM SA – an associate of PKO Bank Polski SA. Until 7 February 2017, the company operated under the name Walcowania Blach Grubych Batory Sp. z o.o. and was a direct subsidiary of FERRUM SA.