Kulczyk Investments S.A announces amendment to terms of loan to Kulczyk Oil Ventures Inc.

CALGARY, Dec. 19, 2012 /CNW/ - Kulczyk Investments S.A. ("KI") announces it has agreed with Kulczyk Oil Ventures Inc. ("KOV") to amend the terms of a June 2012 loan agreement (the "Original Agreement") which provides for KI to loan KOV up to US$12,000,000.  Under the Original Agreement the Loan had a maturity date of December 31, 2012.

Under the terms of the amended agreement (the "Amended Agreement"), the term of the Loan was extended by one year to December 31, 2013 (the "Maturity Date") and all amounts owing under the Loan were made automatically convertible into common shares of KOV (the "KOV Shares") upon the completion by KOV of an "IPO" prior to the Maturity Date or, alternatively, convertible, at the option of KI, into KOV Shares at any time during the term of the Loan. The Amended Agreement provides that KOV shall use its commercially reasonable efforts to complete an IPO by no later than the Maturity Date.

For the purposes of the Amended Agreement, an "IPO" is defined as: (a) the initial public offering or the admission to trading of the KOV Shares on the AIM Market of the London Stock Exchange; (b) the acquisition of KOV by an entity listed on a recognized stock exchange for securities of such entity; (c) the acquisition of an entity listed on a recognized stock exchange by KOV for securities of KOV; or (d) any transaction or arrangement which results in KOV being listed, directly or indirectly, on a recognized stock exchange other than the Warsaw Stock Exchange ("WSE"). In the event of an IPO, the Amended Agreement provides for the automatic conversion of the outstanding principal amount under the Loan, together with all accrued and unpaid interest thereon and any other fees or costs payable by KOV to KI in connection with the Loan, if any, (collectively, the "Obligations") into KOV Shares. If KOV Shares are issued by KOV in connection with the IPO, the conversion price will be either the offer price per KOV Share in the IPO or the issue price per KOV Share in the IPO. If no KOV Shares are issued by KOV in connection with the IPO, the conversion price will be either the volume weighted average price ("VWAP") of a KOV Share on the WSE during the five trading days prior to and excluding the date of the IPO or the exchange ratio per KOV Share in the IPO.

If KI chooses to exercise its option to convert any or all of the outstanding Obligations into KOV Shares at any time during the term of the Loan, the conversion price will be the VWAP of a KOV Share on the WSE during the five trading days prior to, and excluding, the date of the conversion election notice.

Under the terms of the Amended Agreement, interest, payable monthly, remains unchanged from the Original Agreement at 15% per annum. The Loan is currently drawn at $10 million and the balance of the Loan is expected to be drawn down by the end of December 2012.

The total number of KOV Shares issuable to KI if the Obligations are converted is uncertain as the amount of the Obligations to be converted and the final conversion price will be determined in the future.

KI presently holds 240,807,193 KOV Shares or approximately 49.99% of the issued and outstanding KOV Shares. In addition, Radwan Investments GmbH ("Radwan") holds 26,628,360 KOV Shares or approximately 5.53% of the issued and outstanding KOV Shares. Radwan may be considered to be a joint actor to KI, as a result of an agreement in place between Radwan and KI dated September 15, 2010, which entitles Radwan to participate in a percentage of KI's investments and provides that Radwan will vote any securities it purchases pursuant to such agreement in accordance with the directions of KI. KI and Radwan collectively hold 267,435,553 KOV Shares or approximately 55.52% of the issued and outstanding KOV Shares. KI is the only party that is obligated to advance funds to KOV pursuant to the Loan. Radwan is not a party to the Original Agreement or the Amended Agreement.

Dr. Jan Kulczyk, beneficially owns or controls, directly or indirectly, 68.33% of the outstanding shares of KI.

As KI is an accredited investors pursuant to National Instrument 45-106 - Prospectus and Registration Exemptions ("NI 45-106"), Section 2.3 of NI 45-106 was relied upon with respect to the entering into of the Original Agreement and the Amended Agreement.

SOURCE: Kulczyk Investments S.A.

Kulczyk Investments S.A 
13-15 Avenue de la Liberte 
L-1931 Luxembourg 
Luxembourg