Ciech S.A.

Related Party Transaction • Oct 27, 2022

The Management Board of CIECH S.A. (the "Issuer" or"CIECH") herewith informs that on October 27, 2022, a Term Sheet (the"Term Sheet") was executed among the Issuer, CIECH Soda Polska S.A. (the"Subsidiary") and InowrocławskieKopalnie Soli "SOLINO_quot; Spółka Akcyjna ("Solino") including thedefinition of key terms and conditions of cooperation in the sale andsupply of brine to the Subsidiary and the sale of salt and water toSolino. The execution of the Term Sheet is yet another step to ensuringstable sources of brine supplies to the Subsidiary's production plantsin the long term, given that the current contracts can be terminated atthe end of 2025, the new terms of cooperation provide for the conclusionof a supply agreement for brine by 2035 with a volume comparable to thecurrent supply volume.

The Term Sheet defines the conditions of cooperationforming the basis for further negotiations aimed at agreeing futurecontracts regulating the cooperation of the parties in theabove-described scope, in particular, the prices of brine, water andsalt as well as the volumes of brine and salt, and brine qualityparameters.

The Parties also agreed on the scope and rules ofincurring the investment costs necessary for the implementation bySolino for the delivery of full brine volumes by Solino, including theSubsidiary's participation in the investment Solino at the level of 2/3of CAPEX expenses, which the Issuer estimates at about 232 million PLNspread evenly over time in the perspective until the end of 2026.

The Term Sheet assumes, among other things, theconclusion of:

a._#160;_#160;_#160;_#160;_#160;_#160;a contract specifying the conditionsfor the sale of raw brine to the Subsidiary by Solino and the conditionsfor the sale of water to Solino by the Subsidiary;

b._#160;_#160;_#160;_#160;_#160;_#160;a contract specifying the conditionsfor the sale of salt to Solino by the Issuer;

c._#160;_#160;_#160;_#160;_#160;_#160;an agreement to terminate the currentlyeffective contracts governing the supply of brine and water and the saleof salt;

d._#160;_#160;_#160;_#160;_#160;_#160;an agreement regulating the settlementsof the parties under the agreement on the construction of a pipelineconnecting the manoeuvring tank in Inowrocław-Mątwy with the ProductionPlant Ciech in Janikowo, concluded between Solino, the Issuer and theSubsidiary on October 10, 2018.

The Term Sheet does not establish any cooperationbetween the Parties yet, however, it continues to be the basis forfurther negotiations, taking into account the basic assumptionsindicated therein, without specifying the date of the conclusion of thecontract.

On the part of the Issuer and the Subsidiary, theconclusion of the aforementioned contracts and agreements will beconditional, among others, on obtaining the required corporateapprovals.

The transaction on the conditions agreed in the TermSheet will positively affect the financial situation of the Issuer'sgroup, of which the Issuer will advise in the report concerning theconclusion of negotiated contracts.

As a result of the analysis, the Issuer decided itwas reasonable to classify the aforementioned information as insideinformation within the meaning of Article 17.1 of the MAR, subject topublication in the form of this report.

Legal basis: Article 17.1 of the Regulation of theEuropean Parliament and of the Council (EU) No. 596/2014 of 16 April2014 on Market Abuse (the Market Abuse Regulation) and repealingDirective 2003/6/EC of the European Parliament and of the Council andCommission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC).