No. 65/2022 | 30-09-2022 | 16:52
Conclusion of total return swap transaction on PKN ORLEN shares with PKO BP S.A.
PKN ORLEN S.A. (“PKN ORLEN”, „Company”) informs that on 30 September 2022 the Company concluded with Powszechna Kasa Oszczędności Bank Polski S.A. (“PKO BP”) a total return swap transaction on 14.161.080 ordinary bearer shares of PKN ORLEN (“Shares”), the Shares which have been previously acquired by PKO BP from the Polish State Treasury (“TRS”) (“TRS Transaction”).
According to TRS PKN ORLEN (a) will be obliged to pay in favor of PKO BP an amount equal to the difference between average price weighted by the volume of sales that will be obtained by PKO BP as a result of disposal of the Shares that constitute the base instrument to the third parties (“Average Weighted Sales Price”) and acquisition price paid by PKO BP to the Polish State Treasury for the Shares (“Initial Price”) (if the Average Weighted Sales Price will be lower than the Initial Price); or (b) will be entitled to receive from PKO BP an amount equal to the difference between the Average Weighted Sales Price and the Initial Price (if the Average Weighted Sales Price will be higher than the Initial Price).
The TRS Transaction is in force for a period of one month where the parties remain free to agree an extension of that period. Moreover PKO BP is entitled to terminate it earlier in case of disposal of all Shares by PKO BP. In such a case PKN ORLEN could be obliged to pay in favor of PKO BP a break fee for the earlier transaction closing. The break fee will be due if the Average Weighted Sales Price will be higher than the Initial Price and will amount to 2/3 of the difference between the Average Weighted Sales Price and the Initial Price. If the Average Weighted Sales Price will be lower than Initial Price, the break fee will not be due.
The TRS Transaction is concluded under the terms that include provisions of the Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (“CRR Regulation”). To secure the reliabilities of PKO BP that could come from the TRS Transaction PKN ORLEN will deposit cash in favor of PKO BP subject to interest at market conditions.
Conclusion of the TRS Transaction is connected with the planned merger of the Company and Polskie Górnictwo Naftowe i Gazownictwo S.A. (“PGNiG”, “Merger”), with reference to which, according to the information possessed by the Company, it will be necessary for the Polish State Treasury to dispose the part of owned PKN ORLEN shares. According to the information possessed by the Company, the Polish State Treasury disposed the Shares to PKO BP, which – due to concentration limits preventing PKO BP from economic risk connected with the Company’s shares quotations fluctuations – have to secure the exposure to the Shares through conclusion of the TRS Transaction under terms fulfilling the conditions of the CRR Regulation. PKN ORLEN Management Board decided to conclude the TRS Transaction under the abovementioned terms to enable the transaction of acquiring of the Shares by PKO BP and consequently to process the Merger, ie. to vote by the Polish State Treasury for the resolution regarding the Merger.
See also: regulatory announcement no 44/2020 as of 14 July 2020, no 45/2020 as of 14 July 2020, no 46/2020 as of 23 July 2020, no 20/2021 as of 10 May 2021, no 21/2021 as of 12 May 2021, no 22/2021 as of 12 May 2021, no 11/2022 as of 16 March 2022, no 37/2022 as of 29 July 2022, no 46/2022 as of 12 August 2022, no 51/2022 as of 25 August 2022, no 52/2022 as of 25 August 2022, no 53/2022 as of 26 August 2022, no 56/2022 as of 12 September 2022, 59/2022 as of 27 September 2022, 60/2022 as of 27 September 2022 and 61/2022 as of 28 September 2022.