Spolana a.s. sold shares in NeraPharm

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN"), Central Europe’s largest downstream oil company, announces that on 5 December 2006, it was informed that the Municipal Court in Prague registered the sale of shares of NeraPharm (“Shares”), headquartered in Neratovice. The Shares of Nerapharm were sold by Spolana a.s. - an indirect subsidiary PKN ORLEN - to the Cayman Chemical Company headquartered in Michigan, USA. The sale of the shares was based on the share purchase agreement signed on 27 November 2006 by Spolana a.s. as seller and the Cayman Chemical Company as purchaser.

The Shares sold represent 100% of the initial capital of NeraPharm and 100% of the votes at the General Meeting of Shareholders of NeraPharm. The total par value of the Shares amounts to CZK 200,000 ( approximately PLN 27,200 based on average CZK/PLN exchange rates as of 5 December 2006, as stated by the National Bank of Poland). The book value of the sold Shares in the Spolana a.s. books amounted to CZK 200,000 as of 27 November 2006.

The sale of Shares was one of four corresponding agreements in accordance of which Spolana a.s. has sold the following assets:
- real and movable assets owned by Spolana a.s.
- receivables of NeraPharm owed to Spolana a.s.
- 100% of the shares of NeraPharm. to the Cayman Chemical Company for a total price of CZK 128 million (i.e. approximately PLN 17,408,000, based on average CZK/PLN exchanges rates as of 5 December 2006, as stated by the National Bank of Poland).

The total book value of all the sold assets in the Spolana a.s. books amounted to CZK 78.3 million (i.e. approximately PLN 10,648,800 based on average CZK/PLN exchanges rates as of 5 December 2006, as stated by the National Bank of Poland). The above mentioned amount of CZK 128 million refers to the total transaction value and it includes the price for the sold Shares which amounted to CZK 11.5 million (i.e. approximately PLN 1,564,000 based on average CZK/PLN exchanges rates as of 5 December 2006, as stated by the National Bank of Poland).

PKN ORLEN owns shares equivalent to 13.4% of the initial capital of Spolana a.s. and shares equivalent to 84.49% of the initial capital of ANWIL. ANWIL holds shares equivalent to 81.78% of the initial capital of Spolana a.s.

NeraPharm’s main business activities concern the production of pharmaceuticals and chemicals.
The Cayman Chemical Company’s main business activities concern the production of bio-chemicals.

Except in respect of the relationships referred to above, no other relationship exists between PKN ORLEN and PKN ORLEN’s managing or supervisory personnel, and the seller of the shares.

In accordance with paragraph 2 item 1 point 52 “Regulation of the Minister of Finance dated 19October 2005 on current and periodic information to be published by the issuers of securities” the shares sold constitute “significant assets” due to the fact that they represent 100% of the share capital of NeraPharm.