PETROTEC AG / Key word(s): Legal Matter/Restructure of Company
09.11.2012 00:21

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG.
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Ad hoc

Petrotec AG: Tax authorities assess approx. EUR 900,000 in tax payments against Petrotec AG

Borken, Nov. 8th, 2012 - Based on the results of a tax audit, the local tax authorities of the German state of Northrhine-Westphalia (NRW) have assessed income tax payments for fiscal year 2010 against Petrotec AG amounting to approximately EUR 900,000. The tax assessment is based on the authorities' opinion that the proceeds from a certain restructuring transaction (described in more detail further below) do not meet the requirements of a so-called restructuring profit (Sanierungsgewinn) pursuant to the decree of the German Ministry of Finance (BMF) of March 27, 2003 (so-called bail-out decree, Sanierungserlass). The company does not share this opinion and, subject to further evaluation, plans to appeal the decision and, if required, to pursue all legal remedies to reclassify the transaction.

In the first quarter of 2010, Vital Fettrecycling GmbH, a wholly owned subsidiary and part of the tax group of Petrotec AG, closed a debt waiver transaction with IKB Deutsche Industriebank AG. The agreement stipulated that IKB Deutsche Industriebank AG would waive a repayment for loans granted to Vital Fettrecycling GmbH in 2007 totaling EUR 18.9 million in exchange for a one-time payment of EUR 2.2 million. To finance this transaction, IC Green Energy Ltd., the main shareholder of Petrotec AG, granted Vital Fettrecycling GmbH a loan of EUR 2.2 million. As a result of this transaction, IKB Deutsche Industriebank AG effectively waived EUR 16.7 million of its claims against Vital Fettrecycling GmbH and, accordingly, Vital Fettrecycling GmbH had to account for extraordinary cancellation of debt income. Consequently the 2010 result included an extraordinary one-time income of EUR 16.7 million from the charge off of the loans.
In this respect, the income taxes assessed for fiscal year 2010 amounting to appr. EUR 900,000 (taking into account the inclusion of the extraordinary cancellation of debt income) by the tax office of Borken and the municipalities of Borken, Ratingen, Emden and Südlohn had been suspended in accordance with §361 of the German Tax Code. The authorities re-evaluated this matter now due to the outcome of the tax audit and notified Petrotec AG that they will not accept the application of the bail-out decree and will hence put the tax assessment back in effect.
The company is of the opinion that the cancellation of debt income qualifies as a restructuring profit pursuant to the bail-out decree dated March 27, 2003 and is hence subject to corporate income and trade tax exemption (and at the same time not subject to the minimum tax provisions).
This is, because Petrotec had gone through a restructuring phase from 2008 till 2011 during which it has reduced its staff and restructured the balance sheet with several capital increase transactions and additional loans provided by the major shareholder to support urgent working capital requirements. Without implementing the restructuring plan and receiving the support of its major shareholder, IC Green Energy Ltd, the company would not have been in the position to survive in the tough biodiesel market conditions. The debt waiver transaction with IKB Deutsche Industriebank AG was an integral part of these restructuring measures.
About Petrotec AG

Petrotec AG, Germany, is the largest European producer of waste-derived biodiesel, mainly based on used cooking oil. The Company owns an overall nominal biodiesel production capacity of 185,000 tons per year at two locations in Germany. Petrotec runs a vertically integrated business model including own collection of used cooking oil from more than 15,000 collection points, treatment and refining of the raw material up to the technologically demanding production of waste-based biodiesel. The Company sells its biodiesel to large mineral oil companies in northwest Europe. The usage of waste based biodiesel is incentivized by major EU countries with a double counting scheme as part of the mandatory blending quotas. Petrotec's EcoPremium biodiesel provides significant environmental and climate advantages with the highest CO2 emission reduction of 83% (compared with fossil diesel) amongst all biofuels approved by the EU Renewable Energy Directive (2009/28/EC). Since its IPO in 2006, Petrotec cleaned 600,000 tons of waste and saved over 1.6 million tons of CO2 emissions. Petrotec is a public listed company (ISIN DE000PET111) in the regulated market of Frankfurt Stock Exchange, in the Prime Standard segment, complying with high international transparency standards. It has a capital stock of 24,543,741 Euro, equaling 24,543,741 shares. Main shareholder is IC Green Energy Ltd., Israel, with a stake of 69 percent, freefloat is approx. 18 percent. In the business year 2011 (Jan. 1st to Dec. 31st) Petrotec reached sales of EUR 173 mio. and generated an EBIT of EUR 5.3 mio. and a net profit of EUR 3.0 mio. The Company employs about 100 employees.

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Language:     English
Company:      PETROTEC AG
              Fürst-zu- Salm-Salm-Str. 18
              46325 Borken-Burlo
              Germany
Phone:        +49 (0)2862 9100 19
Fax:          +49 (0)2862 9100 99
E-mail:       info@petrotec.de
Internet:     www.petrotec.de
ISIN:         DE000PET1111
WKN:          PET111
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart  
End of Announcement DGAP News-Service  

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