Closing of the transaction of acquisition of 100% shares in PKPE Holding

With reference to the current report no. 61/2022 of December 28, 2022 and current report no. 12/2023 of March 31, 2023, the Management Board of PGE Polska Grupa Energetyczna S.A. (”PGE”) discloses that after fulfilling the last of the conditions precedent on March 31, 2023, the closing of the transaction of direct acquisition by PGE of 100% shares in PKPE Holding sp. z o.o. (the “Company”) and as a consequence indirect acquisition of 100% shares in PKP Energetyka S.A. and shares in other subsidiaries of the Company took place on April 3, 2023.

PKPE Holding Sp. z o.o. is a holding company controlling a number of entities the activities of which are concentrated around PKP Energetyka S.A. (the “PKPE Group”). The PKPE Group is distributor and seller of electricity to the traction grid, and additionally provides traction grid maintenance.

The price to be paid at the closing for 100% shares in the Company (the „Shares”) was determined to be PLN 1 913.5 million on the basis of the enterprise value as at March 31, 2022, and was settled using a locked-box mechanism assumed in the preliminary Shares purchase agreement of December 28, 2022 and then it was subject to adjustments in accordance with the locked-box mechanism, in particular price was reduced by the amount of PLN 40.2 million constituting the outflow of funds (leakage) from the PKPE Group to the seller’s group.

The final price paid by PGE to the seller on April 3, 2023 amounted to PLN 1 873.3 million.

Consolidated recurring (adjusted for non-recurring items) EBITDA of PKPE Group for 2022 amounted to PLN 774 million, including PLN 536 million for Distribution segment. Revenues for 2022 amounted to PLN 4 341 million and capital expenditures amounted to PLN 747 million, including PLN 681 million in the Distribution segment. Net financial debt of PKPE Group amounted to PLN 4 453 million at December 31, 2022.

Volume of distributed electricity of PKPE Group in 2022 amounted to 4.32 TWh and the volume of electricity sold in 2022 amounted to 2.99 TWh.

The acquisition of PKPE Holding Sp. z o.o. is in line with PGE Group’s strategy. As a result of the transaction, PGE Group gained access to the distribution grid throughout the whole country which Regulatory Asset Base for 2023 amounts to PLN 3 421 million.