Energa : Current Report No. 5/2017

Current Report No.:5/2017

Date of preparation: 18 January 2017

Subject: Information on the execution of an investment agreement concerning the investment in Polimex-Mostostal S.A. and other agreements forming part of that transaction.

Legal basis:

Article 17 Section 1 of the Regulation No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC ('MAR')

Body of the report:

In reference to Current Report no. 54/2016 of 27 December 2016, the Management Board of ENERGA SA ('Company') hereby reports that on 18 January 2017 the Company signed the following agreements:

1. Investment Agreement with ENEA S.A., PGE S.A., PGNiG Technologie S.A. (along with the Company jointly referred to as 'Investors') and Polimex-Mostostal S.A. ('Polimex') in which, subject to the conditions precedent set forth in that agreement, the Investors undertook to make an investment in Polimex. The investment consists of the Investors subscribing to a total up to 150,000,000 series T common bearer shares with a par value of PLN 2 (two Polish zloty) each, for the issue price of PLN 2 (two Polish zloty) each ('New Issue Shares') issued by Polimex as part of the Polimex's share capital increase up to PLN 300,000,000 (three hundred million Polish zloty) ('Investment Agreement'). Pursuant to the Investment Agreement, the Company undertook to subscribe to 37,500,000 (thirty seven million five hundred thousand) New Issue Shares for the total issue price of PLN 75,000,000 (seventy five million Polish zloty). Pursuant to Resolution no. 4 adopted by the Extraordinary General Meeting of Polimex on 28 December 2016, the offer of New Issue Shares to individual Investors, their issue price and their number offered to the individual investors is subject to approval by the supervisory board of Polimex. The Investment Agreement was concluded subject to the following conditions precedent ('Conditions Precedent'):

• a binding memorandum of agreement is signed between Polimex, Towarzystwo Finansowe Silesia sp. z o.o. ('TFS') and Polimex's financial creditors, that regulates the rules of restructuring Polimex's financial liabilities and in which the financial creditors and TFS agree for the Investors to subscribe to the New Issue Shares and for the Investors to acquire joint control over Polimex;
• Agencja Rozwoju Przemysłu S.A. ('ARP') and TFS sign an agreement obligating ARP to sell and TFS to purchase 146 series A convertible bonds issued by Polimex;
• SPV Operator sp. z o.o., a subsidiary of ARP ('SPV Operator') and the Investors sign an agreement obligating SPV Operator to sell to the Investors a total of 6,000,001 shares in Polimex after the Conditions Precedent are satisfied or waived by the Investors;
• the extraordinary shareholder meeting of Polimex adopts a resolution introducing changes in Polimex's supervisory board and amending Polimex's Articles of Association and Polimex files an application with the National Court Register to register the amendment to the Articles of Association.

1. Agreement between the Investors setting out the rules of cooperation and the mutual rights and duties of the Investors during the execution of the investment project contemplated in the Investment Agreement.
2. Agreement between the Investors and SPV Operator obligating the parties to the agreement, on the condition that the Conditions Precedent are satisfied, to conduct the transaction of selling a total of 6,000,001 Polimex shares by SPV Operator to the Investors, in which the Company undertook to purchase 1,500,000 Polimex shares;
3. Agreement between the Investors and TFS, under which TFS granted the Investors, against remuneration, an option to purchase Polimex shares from TFS if the TFS exercises its right to convert the convertible bonds issued by Polimex and undertook before the Investors not to convert its series A convertible bonds issued by Polimex without a prior written demand from the Investors.

Additionally, the Company reports that on 18 January 2017, having examined the application reported by the Company in its current report no. 54/2016 of 27 December 2016, the President of the Office of Competition and Consumer Protection issued his approval for the concentration involving acquisition of joint control over Polimex by the Investors.