Enea S.A. — M&A Activity 2017

Mar 3, 2017

Current Report No.: 8/2017

Date of preparation: 3.03.2017

Short name of issuer: Enea S.A.

Subject: Stipulation of the initial price for 100% of shares in ENGIEEnergia Polska S.A.

Legal basis: Article 17 item 1 of MAR - confidential information

The Management Board of Enea S.A. ("Company"), in relation to thecurrent report of 23 December 2016 No. 46/2016 ("Report") relating tothe conclusion of a conditional agreement for the sale of 100% of sharesin ENGIE Energia Polska S.A. ("EEP") ("Agreement") informs thatyesterday ENGIE International Holdings B.V. ("Seller") provided it withthe calculation of the initial selling price for 100% shares in EEPamounting to PLN 1,264,159,355 ("Initial Selling Price").

Pursuant to the received EEP's initial balance sheet as at 31 December2016, taking into account the partial cash repayment in February 2017 ofEEP's debt (in the amount of PLN 113 million) and conversion of thewhole remaining debt of EEP to equity, the selling price for 100% ofshares in EEP corresponds to the enterprise value (EV) on the level ofPLN 995 million as at 31 December 2016.

According to the received EEP's initial financial data in the Polishaccounting standards EEP's EBITDA in 2016 amounted to PLN 359 millionand operating profit to PLN 269 million. The above mentioned financialresults include revenue from allocated free CO2 emission allowances inthe amount of PLN 73 million, which during next years will beconsiderably decreased.

The Initial Selling Price was determined in accordance with the terms ofthe Agreement, as stated in the Report, i.e. in relation to theenterprise value of ENGIE Energia Polska S.A. stipulated on the level ofPLN 1,073,140,672.00, taking in particular into account the values as at31 December 2016, including:

•the level of net debt, i.e. the balance of cash (demonstrated by theSeller on the level of PLN 382 million) and debt (demonstrated by theSeller on the level of PLN 1,337 million),

•the conversion performed in February 2017 of the above mentioned debtto equity in the amount of PLN 1,223 million and utilisation of cash inthe amount of PLN 113 million for the repayment of the remaining part ofthe debt (the surplus of cash over the part used for debt repaymentremained in EEP),

•the level of working capital excluding cash (demonstrated by the Selleron the level of PLN 58 million).

The Initial Selling Price will be subject to verification by the Companyand to potential adjustments in the period occurring directly aftertaking the control over EEP, under the terms specified in the Agreement,compliant with the market standards applying to such transactions.