CR no 1/2017 on 18.01.2017 06:55PM. Information about signing of the investment agreement regarding the investment in Polimex-Mostostal S.A. and other agreements within the transaction.

• No. of the report:1/2017
• Report date:18.01.2017 06:55PM CEST
• Report legal ground:Art. 17 ust. 1 MAR - informacje poufne.

In connection with the current report no 75/2016 dated December 27, 2016, the Management Board of PGE Polska Grupa Energetyczna S.A. (the 'Company') discloses that on January 18, 2017 the Company has signed the following agreements:

1. Investment agreement with ENEA S.A., Energa S.A., PGNiG Technologie S.A. (jointly with the Company - the 'Investors') and Polimex-Mostostal S.A. ('Polimex'), on the ground of which, subject to the conditions precedent specified in the agreement, the Investors have committed to make investment in Polimex. The investment involves acquisition by the Investors jointly of 150,000,000 series T ordinary bearer shares with a nominal value of PLN 2 (say: two zloty) each and the issue price amounting to PLN 2 PLN (say: two zloty) for one share ('New Issue Shares'), issued by Polimex for the increase of the share capital of Polimex by the amount of up to PLN 300,000,000 (say: three hundred million zloty) (the 'Investment Agreement'). On the ground of the Investment Agreement the Company has committed to acquire 37,500,000 (say: thirty seven million five hundred thousand) New Issue Shares for the total issue price of PLN 75,000,000 (say: seventy five million zloty). In accordance with the Resolution no 4 of the Extraordinary General Meeting of Polimex of December 28, 2016, offering to particular Investors of New Issue Shares, their issue price and their number offered to particular Investors is subject to approval by the supervisory board of Polimex. The Investment Agreement has been concluded subject to, inter alia, the following conditions precedent (the 'Conditions Precedent'):

(i) Conclusion of binding agreement between Polimex, Towarzystwo Finansowe Silesia sp. z o.o. ('TFS') and financial creditors of Polimex, that governs the rules for restructuring of Polimex financial liabilities and in which financial creditors and TFS agree for acquisition of New Issue Shares by the Investors and taking joint control over Polimex by the Investors;

(ii) Conclusion of an agreement by Agencja Rozwoju Przemysłu S.A. ('ARP') and TFS obliging ARP to sell and TFS to buy 146 series A convertible bonds issued by Polimex;

(iii) Conclusion of an agreement by SPV Operator sp. z o.o., a subsidiary of ARP ('SPV Operator'), and the Investors obliging SPV Operator to sell to the Investors total of 6,000,001 shares of Polimex, after fulfillment of Conditions Precedent or in case the Investors waive the Conditions Precedent;

(iv) Adoption by the extraordinary general meeting of Polimex of a resolution regarding the changes in the supervisory board of Polimex and changing the Statutes of Polimex, and submission by Polimex an application to the National Court Register concerning registration of a change to the Statutes.

2. An agreement between the Investors defining the principles of cooperation and Investors' mutual rights and obligations with regard to the execution of the investment on the ground of the Investment Agreement.

3. An agreement between the Investors and SPV Operator obliging parties of this agreement, provided that the Conditions Precedent are met, to conclude a transaction concerning disposal of 6,000,001 Polimex' shares in total by SPV Operator in favour of the Investors, as a part of which the Company obligated to buy 1,500,001 shares of Polimex.

4. An agreement between the Investors and TFS whereby TFS has written at a remuneration a call option in favour of the Investors allowing to buy shares of Polimex from TFS, in case the conversion right with regard to Polimex' convertible bonds is exercised by TFS, and TFS has obliged to Investors not to convert the Series A convertible bonds issued by Polimex without a prior written request of Investors.

In addition, the Company discloses that on January 18, 2017, after examining the request about which the Company informed in the current report 75/2016 dated December 27, 2016, the President of the Office of Competition and Consumer Protection has issued approval of concentration, that involves taking joint control over Polimex by the Investors.