The detailed accounting policy pertaining to settlement of acquisition transactions are presented in section 5.7.
On 3 June 2020, Harberton, a wholly-owned subsidiary of Alior Bank and Lurena Investments B.V. with its registered office in the Netherlands, entered into a share purchase agreement under which Harberton acquired 108,824,007 shares in RUCH, representing a 100% stake in the company’s share capital, for the price of PLN 1.00. The RUCH shares were acquired within the framework of the company’s restructuring process. The restructuring process in RUCH was kicked off with the opening of Accelerated Arrangement Proceedings 1 and 2 (on 7 September 2018 and 7 February 2019, respectively) by RUCH controlled at the time by Lurena Investments, the assumption of which was to restructure a portion of RUCH’s liabilities.
The PZU Group’s strategic objective was to smoothly introduce a strategic investor (PKN Orlen) to RUCH to enable the company’s continued development and the successful completion of the restructuring processes.
The pursuit of the strategic objective was reflected in the following documents signed on 1 June 2020:
Since the date of obtaining control, i.e. 3 June 2020, RUCH has been included in the PZU Group’s consolidation using the full method. At the same time, pursuant to the provisions of items 7-9 of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations and the provisions of the Shareholder Agreement and the Investment Agreement, the assets and liabilities of RUCH have been classified by the PZU Group as held for sale.
On 9 November 2020 the execution of the accelerated arrangement proceedings was legally declared.
On 24 November 2020 RUCH’s Shareholder Meeting adopted a resolution to decrease (as a result of retirement of the existing shares) and increase (as a result of issue of new shares) the company’s share capital, exclude the subscription rights and amend its articles of association, which entailed retiring RUCH’s shares held by Harberton. At the same time, the share capital was increased and the shares in RUCH’s increased share capital were subscribed for – in accordance with the Investment Agreement by:
On 24 November 2020, Harberton granted PKN Orlen an irrevocable power-of-attorney to exercise the voting rights from the remaining 100,000 shares in RUCH, prevailing until the court registers the acts of 24 November 2020.
On 23 December 2020 the District Court, 14th Commercial Division of the National Court Register, registered RUCH’s application for decreasing and simultaneously increasing the share capital as a result of which Harberton ceased to be a majority shareholder in RUCH. Accordingly, the PZU Group lost control over RUCH and became a significant shareholder and RUCH became the PZU Group’s associate where the Group holds 35% votes at the shareholder meeting.
In connection with losing control, from 23 December 2020, the PZU Group ceased to consolidate RUCH and started measurement using the equity method.
The settlement of the loss of control over RUCH is presented below:
|Settlement of the loss of control over RUCH|
|Subscription price of new issue shares||70|
|Fair value of the retained shareholding, including:||65|
|- share of the fair value of RUCH’s net assets||5|
|Result on the loss of control||(5)|
The result on the loss of control is presented in the consolidated profit and loss account under “Result on derecognition of financial instruments and investments”.
The fair value of the retained shareholder was determined using the discounted cash flow method on the basis of the most up-to-date financial projections. The discount rate used for the needs of calculation of the fair value was set on the level of the weighted average cost of capital. The cost of equity was determined in accordance with the CAPM model, taking into account the market premium. The risk-free rate was determined based on the average yield of 10-year government bonds.
On 1 February 2021 the company was put in liquidation.
The final settlement for the acquisition of the stake in Tomma on the date of obtaining control was made on the basis of the data prepared as at 30 November 2019. No material differences in accounting data transpired between 30 November and 9 December 2019 (date of acquisition). During the goodwill calculation:
The final settlement of the transaction is presented below on the basis of the fair value of the acquired assets and liabilities.
|Value of acquired net assets||Carrying amount||Adjustment to fair value||Fair value|
|Property, plant and equipment||73||3||76|
|Value of acquired net assets||3||52||55|
|Calculated goodwill||Preliminary settlement||Adjustment||Final settlement|
|Net value of identifiable assets||(3)||(52)||(55)|
On 30 November 2020, PZU FIZ Akcji Combo was closed down. This event did not affect the consolidated financial statements.
On 22 October 2020, the following newly established mutual funds were consolidated: inPZU Puls Życia 2025, inPZU Puls Życia 2030, inPZU Puls Życia 2040, inPZU Puls Życia 2050, inPZU Puls Życia 2060.
In 2020 the following business combinations were registered in the PZU Group:
On 19 November 2020 Pekao Powszechne Towarzystwo Emerytalne SA in liquidation was deleted from the National Court Register.
On 30 December 2020 CPF Management was dissolved.
The transactions did not affect the consolidated financial statements.