PGNiG: Execution of investment agreement to provide capital to PGG

Further to Current Report No. 25/2017 of March 29th 2017, the Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. (“PGNiG”) announces that on March 31st 2017 PGNiG TERMIKA S.A. (the “Company”) signed an investment agreement (the “Investment Agreement”) setting out the terms of financial investment (the “Investment”) in Polska Grupa Górnicza Sp. z o.o. (“PGG”).
The parties to the Investment Agreement are PGNiG TERMIKA S.A., ENERGA Kogeneracja sp. z o.o., PGE Górnictwo i Energetyka Konwencjonalna S.A., Enea S.A., Węglokoks S.A., Towarzystwo Finansowe Silesia Sp. z o.o., Fundusz Inwestycji Polskich Przedsiębiorstw Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych (jointly the “Investors”), and PGG.
The new Investment Agreement changes and supplements the terms of the existing shareholders’ investment in PGG as laid down in the first investment agreement concluded between the existing shareholders and the company on April 28th 2016.
Under the Investment Agreement, PGG will acquire selected mining assets from Katowicki Holding Węglowy S.A. and will receive, in three tranches, a capital contribution totalling PLN 1bn from the Investors (excluding Węglokoks S.A. and Fundusz Inwestycji Polskich Przedsiębiorstw).
As part of the Investment in PGG, PGNiG TERMIKA S.A. agreed to subscribe for new PGG shares with a total par value of PLN 300m in exchange for a cash contribution of PLN 300m, in three tranches:
a)    as part of the first tranche, in April 2017, the Company will subscribe for new PGG shares for a cash contribution of PLN 150m;
b)    as part of the second tranche, in June 2017, the Company will subscribe for new PGG shares for a cash contribution of PLN 60m;
c)    as part of the third tranche, in January 2018, the Company will subscribe for new PGG shares for a cash contribution of PLN 90m.
Following the transaction, the Company will hold 20.43% of the PGG share capital.
Moreover, the Investment Agreement sets out the rules of operation of PGG and the rules of appointment to its Supervisory Board, according to which each Investor and the State Treasury will have the right to appoint one member of the Supervisory Board, composed of up to eight members.
Concurrently, the Investors signed an annex to the agreement on exercising joint control over PGG (the “Investors Agreement”) in connection with ENEA S.A. joining the Investors Agreement.