Kruk S.A. — Capital/Financing Update 2016

Aug 5, 2016

Current Report No. 84/2016

Date: August 5th 2016

Subject: Resolution of the KRUK S.A. Management Board to issue unsecuredbonds

Legal basis: Art. 17.1 of MAR - Inside information

Text of the report:

The Management Board of KRUK S.A. (the "Issuer", the "Company")announces that on August 5th 2016 it passed a resolution to issueunsecured Series AA3 bonds (the Resolution) (the "Bonds").

The Company intends to use the issue proceeds to finance debt purchasesby the KRUK Group (the "Group"), refinance the Group's debt, or financethe Group's growth through acquisitions.

The Company resolved to issue up to 20 000 unsecured Series AA3 bearerbonds with a nominal value of EUR 1,000 per bond, maturing 36 monthsafter the allotment date.

The Bonds will be offered at the issue price equal to their nominalvalue. They will bear interest at a fixed rate of 3.0% per annum,payable every twelve months. The Bonds will be offered in a privateplacement.

They will be issued by September 30th 2016, in book-entry form. TheIssuer intends to convert the Bonds to book-entry form and then tointroduce them to trading in the alternative trading system on theCatalyst market.

Payments under the Bonds will be made to the bondholders:

- through the CSDP and entities maintaining securities accounts − in thecase of Bonds which have been registered with the CSDP;

- through the Bonds Depositary − in the case of Bonds which have notbeen registered with the CSDP.

The Bonds will be redeemed against payment of an amount equal to theirnominal value. The Bonds will only confer the rights to cash payments.Rights attached to the Bonds will be freely transferable. The Bonds willnot be secured.

The Company Management Board reports that, as at the last day of thequarter immediately preceding the submission of invitations to purchasethe Bonds, i.e. as at June 30th 2016, the Issuer's estimated liabilitiestotalled PLN 1 277m, including liabilities under borrowings and otherdebt instruments of PLN 1194m, and past due liabilities of PLN 0m

Irrespective of the nominal value of debt, in the Terms and Conditionsof the Bonds, the Management Board shall undertake to maintain the KRUKGroup's Debt Ratio at or below 3.0 until the Bonds redemption date.

The Debt Ratio will be tested on the basis of the consolidated financialstatements of the KRUK Group prepared in accordance with the IFRS.

In addition, the Issuer shall undertake that in certain extraordinarycircumstances defined in the Terms and Conditions of the Bonds, forinstance if the Issuer shares are delisted from the Warsaw StockExchange, if the Debt Ratio exceeds 3.0 or if the Issuer files apetition in bankruptcy or is declared bankrupt, it will redeem the Bondsearly on the Bondholder's demand, with the proviso that the Bondholderswill have the right to demand mandatory early redemption of their Bondsat such time as is defined in the Terms and Conditions of the Bonds.