1.4 Accounting for new acquisitions of subsidiaries
Accounting for the Collfield Investments acquisition
On June 21, 2022, PGE EO S.A. purchased from Vanadium Holdco Limited 100% of the shares in Collfield Investments sp. z o.o., which holds 100% of the shares in three special purpose vehicles (Future Energy sp. z o.o., Radzyn Clean Energy Poland sp. z o.o., Elwiatr Pruszyński sp. z o.o.) operating three wind farms with a total capacity of 84.2 MW.
In accordance with the requirements of IFRS 3 Business combinations, an analysis was made as to whether the assets and liabilities acquired meet the definition of a business and the transaction should be accounted for under IFRS 3 as a business combination, or whether the assets acquired do not constitute a business and the transaction should be accounted for as an asset acquisition.
After a concentration test, the Group concluded that the transaction constituted an asset acquisition and was recognised as such in these consolidated financial statements.
The transaction value was PLN 939 million. The amount of PLN 344 million was used to pay for the shares, and PLN 595 million concerned a subrogation of liabilities. The assets acquired are fixed assets consisting mainly of wind turbines and technical infrastructure including foundations, roads and yards, as well as power derivation components – MV and HV cables and a substation.
Accounting for the Mithra acquisitions
On February 4, 2022 PGE EO S.A. purchased 100% of shares in Mithra A sp. z o.o., Mithra B sp. z o.o., Mithra L sp. z o.o. and Mithra V sp. z o.o., which own 7 PV projects with a total capacity of 26 MW, for the total price of PLN 18.7 million. The purchase of shares in the individual companies took place under separate agreements, but their structure and transaction formula were analogous.
On December 9, 2022, PGE EO S.A. entered into agreements to purchase 100% of the shares in Mithra D sp. z o.o., Mithra F sp. z o.o., Mithra G sp. z o.o., Mithra H sp. z o.o., Mithra I sp. z o.o, Mithra K sp. z o.o., Mithra M sp. z o.o., Mithra N sp. z o.o., Mithra O sp. z o.o., Mithra P sp. z o.o., with 28 photovoltaic projects with a total capacity of 59 MW. The transaction value was PLN 21.1 million.
The purchase of shares in the individual companies took place under separate agreements, but their structure and transaction formula were analogous.
In accordance with the requirements of IFRS 3 Business combinations, an analysis was made as to whether the assets and liabilities acquired meet the definition of a business and the transaction should be accounted for under IFRS 3 as a business combination, or whether the assets acquired do not constitute a business and the transaction should be accounted for as an asset acquisition.
After a concentration test, the Group concluded that the transaction constituted an asset acquisition and was recognised as such in these consolidated financial statements.
For all of the above transactions, the assets acquired are the documentation of photovoltaic farm projects: technical conditions for connection, design maps, environmental reports, land lease agreements, administrative fees, etc. Individual items vary from company to company depending on the progress of the projects.