Kaucuk a.s. has purchased the shares of Butadien Kralupy a.s.

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN") announces that on 9 May 2007 it was informed that the company Butadien Kralupy a.s. (“Butadien Kralupy”), headquartered in Kralupy nad Vltavou (Czech Republic), was registered on 27 April 2007 by the City Court in Prague (Czech Republic).

PKN ORLEN’s indirect subsidiary - KAUCUK, a.s. (“Kaucuk”), headquartered in Kralupy nad Vltavou (Czech Republic) has purchased 300 shares in Butadien Kralupy for a total price of CZK 150 000 000 (i.e. approximately PLN 19 980 000, based on average CZK/PLN exchange rates as of 9 May 2007, as stated by the National Bank of Poland) (“Purchased Shares”).

The Purchased Shares represent 100% of the initial capital of Butadien Kralupy, with a par value CZK 500 000 (i.e. approximately PLN 66 600, based on average CZK/PLN exchange rates as of 9 May 2007, as stated by the National Bank of Poland) for each share, and represents 100% of the votes at the General Meeting of shareholders of Butadien Kralupy.

The Shares were paid for by Kaucuk in the form of a cash contribution. The book value of the Purchased Shares in the Kaucuk books amounted to CZK 150 000 000 (i.e. approximately PLN 19 980 000, based on average CZK/PLN exchange rates as of 9 May 2007, as stated by the National Bank of Poland) as of 9 May 2007.

The main business activity of Butadien Kralupy is the leasing of real estate, apartments and non-residential premises. Butadien Kralupy will be involved in the construction and operation of a new butadiene unit on the basis of an agreement signed by Unipetrol, Dwory, CHEMOPETROL, a.s. and Kaučuk (further information can be found below).
Kaucuk is a chemical company, and a producer of styrene-butadiene and polybutadiene rubbers, polystyrene plastics and synthetic rubber.
The main business activities of Unipetrol include crude oil refining, petrochemical and chemical production, and the sale of fuels.

PKN ORLEN owns 63% of votes at the General Meeting of Unipetrol.
Unipetrol owns 100% of votes at the General Meeting of Kaucuk.

The Supervisory Board of Kaucuk consists of 3 members, 1 of which is a Unipetrol employee, while 2 are Kaučuk employees.
The Unipetrol Supervisory Board consists of 12 members, 7 of which are PKN ORLEN employees. The Kaucuk Management Board/Board of Directors consists of 4 members, of which 2 are Unipetrol employees and 2 are Kaucuk employees.

At the same time on 9 May 2007, Butadien Kralupy and Chemoprojekt, a.s., headquartered in Prague (Czech Republic) executed the Agreement on the Construction of the New Butadiene Unit (the “Agreement“) for a total price of CZK 1,147,364,000 (i.e. approximately PLN 152 828 885, based on average CZK/PLN exchange rates as of 9 May 2007, as stated by the National Bank of Poland) as well as other contractual documentation in connection with the Agreement.

The Agreement was executed in connection with implementation of the sale of 100% shares of Kaučuk, owned by UNIPETROL, a.s. (“Unipetrol“), to FIRMA CHEMICZNA DWORY S.A., with its registered office in Oświęcim (Poland) (“Dwory”) under the share purchase agreement entered into on 30 January 2007 between Unipetrol as seller and Dwory as buyer, and within the meaning of the Agreement on Cooperation in connection with the Construction and Operation of the New Butadiene Unit, executed by and amongst Unipetrol, Dwory, CHEMOPETROL, a.s. and Kaučuk on 30 January 2007 (the “Cooperation Agreement”).

The Cooperation Agreement provides that a 51% stake in Butadien Kralupy shall be transferred from Kaučuk to Unipetrol, so the investment in the Butadien Kralupy shares is of a short-term nature.

As the Purchased Shares represent more that 20% of the Butadien Kralupy initial capital, they are significant assets in accordance with the Regulation of the Polish Minister of Finance dated 19 October 2005, on current and periodic information to be published by issuers of securities (Journal of Laws as of 26 October 2005).

See also: regulatory announcement no 11/2007 dated 30 January 2007.