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Grupa LOTOS S.A. to take up new shares in LOTOS Asfalt sp. z o.o. in exchange for in-kind contribution in the form of organised part of business
Report no. 40/20212021-11-02

Further to Current Report No. 10/2021, Grupa LOTOS S.A. (“Grupa LOTOS” or the “Company”) announces that in connection with the adopted plan of internal reorganisation measures, in order to optimise the structure of the Company’s group and prepare for the implementation of required remedies (see Current Report No. 21/2020 for more information), on November 2nd, 2021 the Extraordinary Shareholders’ Meeting of LOTOS Asfalt sp. z o.o. (“LOTOS Asfalt”) passed a resolution to increase the share capital of LOTOS Asfalt through the issue of new shares, all of which were taken up by Grupa LOTOS as the sole shareholder of LOTOS Asfalt and in exchange for an in-kind contribution in the form of an organised part of the Company’s business, consisting of tangibles and intangibles related to the refining business in Gdańsk, as specified in Resolution No. 3 of the Extraordinary Shareholders’ Meeting of Grupa LOTOS S.A. of October 14th, 2021 (the “OPB”), with the total value with a total value estimated as on November 2nd, 2021 in the amount of PLN 4,808,500,000.00 (four billion eight hundred and eight million five hundred thousand zlotys). Thus, the Company transferred OPB to LOTOS Asfalt.

The Extraordinary General Meeting of LOTOS Asfalt resolved to increase the share capital of LOTOS Asfalt to PLN 154,500,000.00 (one hundred fifty-four million five hundred thousand zlotys) by creating 24,597 (twenty-four thousand five hundred and ninety-seven) new shares with a par value of PLN 5,000.00 (five hundred thousand zlotys) each share. The excess of the value of the in-kind contribution over the nominal value of the shares taken up will be transferred to the supplementary capital of LOTOS Asfalt.

The process of integrating the refinery assets within LOTOS Asfalt is due to commence on November 2nd, 2021. Ultimately, the company will operate as a processing refinery managed by Grupa LOTOS as the sole shareholder of LOTOS Asfalt. As such, LOTOS Asfalt will not purchase crude oil or sell products on its own behalf and its core business will be processing crude oil and providing fuel production services to Grupa LOTOS based on a cost-plus margin settlement model. Grupa LOTOS will be responsible for the purchase of crude oil and other feedstocks, sale of fuels and other end products, logistics, administrative and corporate matters, as well as for research and development activities.

The Company also announces that in connection with the above transaction LOTOS Asfalt has provided surety for Grupa LOTOS’s liabilities under the credit facility agreement signed to refinance the credit facilities taken out for the 10+ Programme (see Current Report No. 24/2019 for further details). The surety agreement entered into force upon the contribution of the OPB to LOTOS Asfalt. The surety has been provided for up to USD 408m and will expire no later than October 10th, 2027.

The OPB sale transaction will remain neutral with respect to the Group’s consolidated results and will have no effect on the Company’s ability to meet its commercial obligations towards customers.

Legal basis: Article 17(1) of MAR – Inside information.