No. 26/2018  |  27-02-2018

Signing a letter of intent concerning taking capital control over Grupa Lotos S.A. by PKN ORLEN S.A.

The Management Board of PKN ORLEN S.A. (“PKN ORLEN”, “Issuer”) informs that on 27 February 2018 it signed a letter of intent between PKN ORLEN and the State Treasury concerning taking capital control over Grupa Lotos S.A. (“Lotos Group”) by PKN ORLEN, understood as a purchase by PKN ORLEN directly or indirectly minimum 53% stake in Lotos Group share capital (“Transaction”).

By signing the letter of intent, PKN ORLEN and the State Treasury agreed to start, in a good faith, discussions with the intent to conclude the Transaction. The Transaction assumes the purchase of Lotos Group shares from its shareholders by PKN ORLEN, in particular from the State Treasury, in line with the requirements of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of 29 July 2005 (unified text Journal of Laws of 2016, item 1639, as amended), governing the requirement of announcement of a tender offer to acquire or exchange shares.

The Issuer informs that the Transaction model, the schedule and detailed rules of its finalisation require detailed analysis that will be now prepared. Finalisation of the Transaction will be possible, among others, after receiving appropriate corporate approvals and approvals of the competition protection authorities regarding the concentration.

According to the assumptions of both parties of the letter of intent, the Transaction is aimed at creating of a strong, integrated company capable of better competing internationally, resistant to market fluctuations, among others through utilization of operating and costs synergies between PKN ORLEN and Lotos Group.

The Issuer indicates that the letter of intent is not a binding commitment to execution of the Transaction. The Issuer will inform about next steps connected with further Transaction process in separate regulatory announcements.