The agreement between PKN ORLEN S.A. and the State Treasury regarding planned merger of PKN ORLEN S.A. with Grupa LOTOS S.A.

PKN ORLEN S.A. (“Company”) informs that on 20 July 2022 there has been signed an agreement between the Company and the State Treasury regarding the planned merger of the Company with Grupa LOTOS S.A. (“Grupa LOTOS”) (“Agreement”).

 

The Agreement sets forth the Company’s declarations of intent not constituting a contractual obligation of the Company regarding: (i) realization of the energy policy of Poland for crude oil and liquid fuels (traditional) and (ii) continuation of employment policy towards employees of Grupa LOTOS capital group, who will become employees of the Company’s capital group after the merger, assuring proper and safe operating of the workplaces belonging to Grupa LOTOS capital group before the merger and also Company’s commitment to continue key investments that are realized by Grupa LOTOS before the merger, indicated in the Agreement.

 

The parties of the Agreement assumes that after the merger of the Company with Grupa LOTOS the key investments of Grupa LOTOS, indicated in the Agreement, will be continued in the minimum scope specified in the Agreement (“Investment Commitments”). The Company declared that immediately after the merger it will verify the conditions for continuation of these investments.

 

The Company declared also that after the merger and subject to the exceptions described in the Agreement it will take steps towards: (i) diversifying of the supplies of natural resources, in particular crude oil and independence of Poland from Russian crude oil deliveries, (ii) strengthening of the Company's position on the production and distribution of liquid fuels (traditional) market while endeavouring to reduce their emissivity, (iii) development of the Company on the petrochemical products market, including searching for and undertaking investments, (iv) research and projects on the use of alternative fuels, as well as electromobility and (v) maintaining the proper operation of Gdańsk refinery.

 

Declaration on the Company’s realization of the energy policy of Poland will be realized in the scope permitted by the generally applicable law and provisions of the Company’s Articles of Association.

 

The Agreement is not legally binding except for selected provisions regulating, among others, execution of the Investment Commitments, including the Company’s liability for breach of these obligations.

 

In case of culpable non-performance or improper performance of legally binding Investment Commitments by the Company and ineffective expiry of the deadlines provided by the parties of the Agreement to develop the recovery plan for non-performance or improper performance of the Investment Commitments, the Company will be obliged to pay contractual penalties to the State Treasury, which are in a precisely defined amount described in the Agreement.

 

Subject to the exceptions set out in the Agreement, it will remain in force for a period of 10 years from the date of its conclusion and will be automatically extended in the circumstances defined in the Agreement, for the period necessary for realization of the Investment Commitments. The Agreement will enter into force in principle on the date of the merger of the Company with Grupa LOTOS, i.e. with the date of entry the merger in the relevant register.

 

See also: regulatory announcement no 26/2018 as of 27 February 2018, no 106/2018 as of 30 November 2018, no 31/2019 as of 3 July 2019, no 34/2019 as of 26 August 2019, no 42/2020 as of 14 July 2020, no 43/2020 as of 14 July 2020, no 45/2021 as of 12 November 2021, no 1/2022 as of 12 January 2022, no 2/2022 as of 12 January 2022, no 23/2022 as of 2 June 2022, no 24/2022 as of 2 June 2022, no 26/2022 as of 20 June 2022, no 27/2022 as of 23 June 2022, no 28/2022 as of 23 June 2022 and no 29/2022 as of 4 July 2022.