Notification pursuant to 4.20.1 of the Document for the offered securities of the issue of convertible corporate bonds with ISIN BG2100023170 issued by MONBAT AD

According to the terms and conditions of the issue of convertible corporate bonds with ISIN BG2100023170 issued by Monbat AD, the principal amount of the issue is to be repaid in three installments at the end of the 5th, 6th and 7th years, and the amounts of the repayment installments being 20%, 30% and 50% of the nominal amount, respectively. On 20.01.2023 Monbat AD is obliged to repay the first principal instalment of EUR 5 603 000.

The quarterly reports pursuant to Article 100b (8) of the Public Offering of Securities Act (POSA) on compliance with the terms of the bond loan indicate that a substantial part of the proceeds from the bond issue were used to acquire shares in the capital of the entity Monbat Holding Germany GmbH, in the balance sheet of which the lithium-ion division of the Monbat Group is consolidated. On 28.05.2022 Monbat AD announces its intention to sell the shares in the capital of Monbat Holding GmbH to Britishvolt, a pioneer in the battery industry whose activities focus on the development of next-generation lithium-ion battery technologies and related research and solutions. The value of the transaction for the shares of Monbat Holding GmbH is EUR 36 million and includes two components - a cash payment and the acquisition of ordinary shares from a subsequent capital increase of Britishvolt. The expected cash portion to be received by Monbat AD from the transaction significantly exceeds the amount of the obligation for the first principal payment of the convertible bond issue. For this reason, the intention of the management of Monbat AD was to use the cash from the Britishvolt transaction to service this payment.

Due to circumstances outside the control of Monbat AD, the transaction with Britishvolt was not finalized within the planned timeframe. The management of Monbat AD has promptly undertaken a plan to alternatively secure funds for the payment. The expectation was that by the maturity date the necessary funds would be available. Unfortunately, the short time for reaction reflects on the ability of Monbat AD to make the principal payment due on 20 January 2023 in a timely manner.

The principal payment is among the parameters that may be changed by a decision of the general meeting of bondholders in accordance with the procedure detailed in the Securities Offering Document. It provides for an obligation of Monbat AD as the issuer to request a General Meeting of Bondholders to consider this issue. The management of Monbat AD considers that the delay in the receipt of the proceeds needed to cover the first principal payment will be shorter than the time required convening and holding a general meeting of bondholders.

Taking into account the above circumstances, the management of Monbat AD informs the public, investors, the regulated market - BSE AD and the FSC that the repayment installment of the convertible bond issue will be paid not later than 31.01.2023. The interest due as of 20.01.2023 will be paid in due time according to the repayment plan.