Kruk S.A. — Share Issue/Capital Change 2016

Dec 15, 2016

Current Report No. 120/2016

Date of the report: December 15th 2016

Subject: Subscription and offering of Series G shares and execution bythe Company of agreement with advisors on private placement of newSeries G shares

Legal basis: Art. 56.1.2 of the Public Offering Act – Current andperiodic information

Text of the report:

Further to Current Report No. 113/2016 of November 29th 2016, whichcontained information on resolutions passed on November 29th 2016 by theExtraordinary General Meeting of Kruk S.A. (Company), includingResolution No. 4 concerning the issue of Series G ordinary bearer shares(Issue Resolution), the Company's Management Board announces that adecision has been made to open the subscription and offering of no fewerthan 1 and no more than 1,000,000 Series G ordinary bearer shares, witha par value of PLN 1 per share, (Series G Shares) through privateplacement within the meaning of Art. 431.2.1 of the Commercial CompaniesCode of September 15th 2000 (Offering).

The Offering, which will be commence immediately upon publication ofthis current report, will be conducted through accelerated bookbuildingamong Eligible Investors designated by the Management Board, inaccordance with the Issue Resolution. All Series G Shares will beoffered at the same issue price, which will be set by the ManagementBoard based on results of the bookbuilding process, so as to ensuremaximum proceeds from the issue of Series G Shares and a minimumdiscount, if any, to the market price,

Under the Issue Resolution, the Eligible Investors who are shareholdersin the Company shareholders as at the record date for participation inthe Extraordinary General Meeting that will pass the resolution onincreasing the share capital through the issue of Series G Shares(Record Date for the Right of First Refusal) (Eligible Investors Holdingthe Right of First Refusal) and who meet the criteria for participatingin the offering of Series G Shares, as specified in the resolution, willhave the right of first refusal to subscribe for Series G Shares. Inaccordance with the proposed terms, an Eligible Investor Holding theRight of First Refusal will have the right of first refusal to subscribefor such number of Series G Shares as will be the product of: (a) theratio of the number of Company shares held by such Eligible InvestorHolding the Right of First Refusal on the Record Date for the Right ofFirst Refusal to the number of all Company shares existing on the RecordDate for the Right of First Refusal, and (b) the final number of offeredSeries G Shares determined by the Management Board, subject to roundingin accordance with the rules set out in the resolution. The ability toexercise the right of first refusal will depend on fulfilment of theconditions specified in the Issue Resolution.

The Company will apply for the admission and introduction of Series GShares and, if the regulatory requirements for such submission andintroduction are met, of allotment certificates to Series G Shares(Allotment Certificates) to trading on the regulated market operated bythe Warsaw Stock Exchange (WSE) (Admission). For the purposes of theOffering and the Admission, the Company is not required to publish aprospectus or information memorandum, and it will not engage in anypromotional activities in relation to the Offering or Series G Shares.

The Company's Management Board further reports that, as one of the stepstaken to give effect to the Issue Resolution, on December 15th 2016 theCompany entered into a share placement agreement (Placement Agreement)with WOOD & Company Financial Services, a.s. Spółka Akcyjna Oddział wPolsce of Warsaw, and Powszechna Kasa Oszczędności Bank Polski SpółkaAkcyjna Oddział- Dom Maklerski PKO Banku Polskiego of Warsaw (Advisors).Each of the Advisors will act in the Offering as Joint GlobalCoordinator and Joint Bookrunner. Pursuant to the Placement Agreement,the Advisors undertook to provide services for the purposes of placingSeries G Shares on the terms stipulated in the agreement, including inparticular to exercise due care in soliciting potential investors andensuring that such investors subscribe and pay for the shares. However,the Advisors are in no way obliged to guarantee success of the issue ofSeries G Shares. The Placement Agreement includes standard obligationsof the Advisors, typically found in similar agreements concluded as partof transactions similar to the offering of Series G Shares, includingconditions relating to the occurrence of force majeure events and of amaterial adverse change in the Company's standing. The PlacementAgreement also includes representations and warranties relating to theCompany, its Group and operations thereof, whose scope and nature istypical for representations and warranties made by securities issuers inagreements of this type concluded as part of transactions similar to theoffering of Series G Shares. The Placement Agreement is governed by thePolish law. Under the Placement Agreement, the Advisors and otherpersons specified in the Placement Agreement will be indemnified againstcertain claims, liabilities or costs which might be sought against orraised by the Advisors or such other persons in connection with thePlacement Agreement. In connection with the Placement Agreement, theCompany has assumed a lock-up obligation with respect to the Companyshares which will remain in force for a period of 180 days from the dateof the Placement Agreement.

This current report was prepared in compliance with the provisions ofArt. 17.1 of MAR; it is for information purposes only and does notconstitute, whether directly or indirectly, an offer to buy or subscribefor, or the making available of information to promote the purchase orsubscription for, or an inducement of the purchase or subscription for,any securities in Kruk S.A. of Warsaw. This material or any part hereofis not intended for distribution, whether directly or indirectly, in orto the United States or any other jurisdiction where public distributionof the information contained in this material may be limited orprohibited by law. The securities described in this material have notbeen and will not be registered under the U.S. Securities Act of 1933,as amended, and may not be offered or sold within the United Statesexcept pursuant to an exemption from, or in a transaction not subjectto, the registration requirements of the U.S. Securities Act.