Investment agreement on directional principles of cooperation in construction of Ostrołęka C Power Plant

PKN ORLEN S.A. (“PKN ORLEN”) informs that on 22 December 2020 it has signed with PGNiG S.A. (“PGNiG”) and ENERGA S.A. (“ENERGA”), (“Parties”) an investment agreement on directional principles of cooperation in construction of gas power plant in Ostrołęka C Power Plant (“Investment agreement”), (“Gas Project”). The Parties of the Investment agreement declared to cooperate in realization of the Gas Project by setting up a new company that will acquire selected assets and liabilities necessary to realize the Gas Project, from Elektrownia Ostrołęka Sp. z o.o. headquartered in Ostrołęka („EOC”). Acquisition of the selected assets and liabilities necessary to realize the Gas Project will be possible thanks to the agreement concluded on 22 December 2020 between the EOC shareholders, i.e. between ENERGA and ENEA S.A. and EOC.

In the Investment agreement signed today the Parties concluded that PKN ORLEN and ENERGA will acquire jointly 51% of shares in the share capital of the newly established company and the same percentage of the total number of votes at its shareholders meeting, and PGNiG will acquire the remaining 49% of shares in the share capital of the newly established company and the same percentage of the total number of votes at its shareholders meeting. Breakdown of the number of shares between  ENERGA and PKN ORLEN will be agreed separately by ENERGA and PKN ORLEN during acquiring of the shares. Shares in the newly established company will not be preferred and shareholding rights will be realized according to the principles described in the Polish Commercial Companies Code.

Moreover the Parties of the Investment agreement concluded the structure of the newly established company, including principles of its shares disposal, personal rights of its shareholders regarding appointments and dismissals of members of the management and supervisory boards, principles of voting rights execution on its corporate bodies meetings and other principles of its functioning.

The limit of financial exposure of the Parties in the realization of the Gas Project will be determined proportionally to the share in the share capital of the newly established company.

The Parties assume that all factors enabling establishing of the new company, including approvals of relevant antitrust authorities, will be realized by 30 June 2021. Additionally PGNiG will be able to join the newly established company after conducting due diligence of the Gas Project and obtaining PGNiG corporate bodies approvals.

Additionally PKN ORLEN concluded today with PGNiG an annex to the agreement for gas deliveries to the ORLEN Capital Group by the end of 2027 (with the option of extension by the end of 2028), including the future demand of Ostrołęka C Power Plant for that commodity.

See also: regulatory announcement no 31/2020 as of 19 May 2020, no 33/2020 as of 2 June 2020, and no 50/2020 as of 3 September 2020.