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  • No. of the report:25/2016
  • Report date:26.04.2016
  • Report legal ground:Art. 56 section 5 of Act on Public Offering - information amendments

The Management of PGE Polska Grupa Energetyczna S.A. ('PGE', 'the Company') discloses that on April 26, 2016, PGE Górnictwo i Energetyka Konwencjonalna S.A. ('PGE GiEK') - the subsidiary of PGE, signed the agreement on initiation of Polska Grupa Górnicza ('the Agreement').

The agreement has been signed between following counterparties: Kompania Węglowa S.A., Polska Grupa Górnicza sp. z o.o. ('PGG'), PGE GiEK, Węglokoks S.A., Towarzystwo Finansowe Silesia sp. z o.o. ('TFS'), Fundusz Inwestycji Polskich Przedsiębiorstw Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych ('FIPP'), PGNiG TERMIKA S.A., Energa Kogeneracja Sp. z o.o (PGE GiEK, Węglokoks S.A., TFS, FIPP, PGNiG TERMIKA S.A., Energa Kogeneracja Sp. z o.o. - mutually referred as 'Investors'), Alior Bank S.A., Bank BGŻ BNP Paribas S.A., Powszechna Kasa Oszczędności Bank Polski S.A., Bank Zachodni WBK S.A., Bank Gospodarstwa Krajowego S.A. and labor unions acting in Kompania Węglowa S.A. (mutually referred as 'Parties').

The Parties of the Agreement confirmed the validity of establishing of PGG, which will operate on the basis of selected mining assets, to be acquired from Kompania Węglowa S.A. (including 11 hard coal mines, 4 support units and central managing structure).

Investors will take up new shares of PGG amounting to PLN 2,417 million (including PLN 1,800 million to be covered with cash payment).

PGE GiEK, as one of Investors declared recapitalization of PGG with amount of PLN 500 million in cash.

The investment is compliant with the strategy of PGE Group, which includes securing fuel base for conventional generation.

PGG shall function on the basis of the business plan submitted to Parties by PGG, which aims at strict control of coal production costs, achieving defined profitability levels and efficiency improvement. Details will be governed by the investment agreement, which is planned to be signed on April 29, 2016.

Due to lack of full control over the company, PGE does not assume full consolidation of PGG's financial data.

Legal ground: Art. 56 section 5 of the Act on public offering, conditions governing the introduction of financial instruments to organised trading, and public companies (Dziennik Ustaw 2013, item 1382, as amended).

Date Name Position and function
26.04.2016
26.04.2016

PGE - Polska Grupa Energetyczna SA issued this content on 26 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 26 April 2016 12:42:09 UTC

Original Document: http://www.gkpge.pl/en/current-reports/report/25-2016