PGE Polska Grupa Energetyczna S.A.

M&A Activity • Jan 18, 2017

Information about signing of the investment agreement regarding theinvestment in Polimex-Mostostal S.A. and other agreements within thetransaction

In connection with the current report no 75/2016 dated December 27,2016, the Management Board of PGE Polska Grupa Energetyczna S.A. (the"Company") discloses that on January 18, 2017 the Company has signed thefollowing agreements:

1. Investment agreement with ENEA S.A., Energa S.A., PGNiG TechnologieS.A. (jointly with the Company - the "Investors") and Polimex-MostostalS.A. ("Polimex"), on the ground of which, subject to the conditionsprecedent specified in the agreement, the Investors have committed tomake investment in Polimex. The investment involves acquisition by theInvestors jointly of 150,000,000 series T ordinary bearer shares with anominal value of PLN 2 (say: two zloty) each and the issue priceamounting to PLN 2 PLN (say: two zloty) for one share ("New IssueShares"), issued by Polimex for the increase of the share capital ofPolimex by the amount of up to PLN 300,000,000 (say: three hundredmillion zloty) (the "Investment Agreement"). On the ground of theInvestment Agreement the Company has committed to acquire 37,500,000(say: thirty seven million five hundred thousand) New Issue Shares forthe total issue price of PLN 75,000,000 (say: seventy five millionzloty). In accordance with the Resolution no 4 of the ExtraordinaryGeneral Meeting of Polimex of December 28, 2016, offering to particularInvestors of New Issue Shares, their issue price and their numberoffered to particular Investors is subject to approval by thesupervisory board of Polimex. The Investment Agreement has beenconcluded subject to, inter alia, the following conditions precedent(the "Conditions Precedent"):

(i) Conclusion of binding agreement between Polimex, TowarzystwoFinansowe Silesia sp. z o.o. ("TFS") and financial creditors of Polimex,that governs the rules for restructuring of Polimex financialliabilities and in which financial creditors and TFS agree foracquisition of New Issue Shares by the Investors and taking jointcontrol over Polimex by the Investors;

(ii) Conclusion of an agreement by Agencja Rozwoju Przemysłu S.A.("ARP") and TFS obliging ARP to sell and TFS to buy 146 series Aconvertible bonds issued by Polimex;

(iii) Conclusion of an agreement by SPV Operator sp. z o.o., asubsidiary of ARP ("SPV Operator"), and the Investors obliging SPVOperator to sell to the Investors total of 6,000,001 shares of Polimex,after fulfillment of Conditions Precedent or in case the Investors waivethe Conditions Precedent;

(iv) Adoption by the extraordinary general meeting of Polimex of aresolution regarding the changes in the supervisory board of Polimex andchanging the Statutes of Polimex, and submission by Polimex anapplication to the National Court Register concerning registration of achange to the Statutes.

2. An agreement between the Investors defining the principles ofcooperation and Investors' mutual rights and obligations with regard tothe execution of the investment on the ground of the InvestmentAgreement.

3. An agreement between the Investors and SPV Operator obliging partiesof this agreement, provided that the Conditions Precedent are met, toconclude a transaction concerning disposal of 6,000,001 Polimex' sharesin total by SPV Operator in favour of the Investors, as a part of whichthe Company obligated to buy 1,500,001 shares of Polimex.

4. An agreement between the Investors and TFS whereby TFS has written ata remuneration a call option in favour of the Investors allowing to buyshares of Polimex from TFS, in case the conversion right with regard toPolimex' convertible bonds is exercised by TFS, and TFS has obliged toInvestors not to convert the Series A convertible bonds issued byPolimex without a prior written request of Investors.

In addition, the Company discloses that on January 18, 2017, afterexamining the request about which the Company informed in the currentreport 75/2016 dated December 27, 2016, the President of the Office ofCompetition and Consumer Protection has issued approval ofconcentration, that involves taking joint control over Polimex by theInvestors.