The signing of a preliminary agreement regarding the acquisition of 100% of the shares in PKPE Holding

The Management Board of PGE Polska Grupa Energetyczna S.A. (“PGE”) discloses that on December 28, 2022, PGE (as the buyer) and Edison Holdings S.à r.l. (the “Seller”) signed a preliminary share sale agreement regarding the shares in PKPE Holding Sp. z o.o. (the “Company”), pursuant to which PGE and the Seller have committed to conclude a promised agreement for the sale of 100% of the shares in the Company (the “Preliminary Agreement”). In performance of the Preliminary Agreement, PGE will directly acquire from the Seller 100% of the shares in the Company, and, indirectly, 100% of the shares in PKP Energetyka S.A., and shares in other subsidiaries owned by the Company.

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 an energy distributor and seller of energy to the traction grid, and additionally provides traction grid maintenance.

The price to be paid by PGE was determined to be approximately PLN 1 913.5 million on the basis of the enterprise value as at March 31, 2022, of approximately PLN 5 944.5 million, and will be settled using a locked-box mechanism. The price will be subject to eventual adjustments, in particular by the amount of outflow from the PKPE Group to the Seller’s group.

The closing of the transaction is planned to take place on April 3, 2023. The payment for the shares will be effectuated on the transaction closing date.

In certain cases concerning, inter alia, the differences between the values of the actual and the projected selected financial data, the parties may withdraw from the Preliminary Agreement.

The closing of the transaction is conditional upon the satisfaction, in particular, of the following conditions:

- obtaining the consent of the Office of Competition and Consumer Protection (UOKiK);

- closing the court dispute concerning the privatisation of PKP Energetyka;

- obtaining the consent of the Minister of State Assets;

- obtaining waivers from the financing institutions.

In the case of the occurrence of the circumstances specified in the Preliminary Agreement, the parties may withdraw from the transaction.

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 will gain access to the distribution grid throughout the whole country.