Memorandum of Understanding signed for PKN ORLEN’s acquisition of Grupa LOTOS shares from the State Treasury
Report no. 24/2020 2020-08-18

Grupa LOTOS S.A. (the “Company”) announces that on August 18th 2020, the State Treasury, PKN Orlen S.A. (“PKN Orlen”) and the Company signed a memorandum of understanding for the proposed transaction in which PKN Orlen would acquire Company shares representing at least 53% of its share capital and voting rights at its general meeting from the State Treasury (the „Transaction”) (the “MoU”). The Transaction would result in the acquisition by PKN ORLEN, directly or indirectly, of equity control of the Company.

The MoU follows the letter of intent signed between PKN Orlen and the State Treasury, as announced by PKN Orlen in Current Report No. 26/2018, and the conditional approval by the European Commission of the acquisition of control of the Company by PKN Orlen (the “Approval Decision”). The Transaction is conditional upon implementation of the remedies specified in the Approval Decision (the “Remedies”). The Remedies include structural and behavioural commitments relating to the structure and policies of the undertakings involved in the concentration, i.e. the Company and PKN Orlen. Considering the above and given that the implementation of the Remedies is substantially the responsibility of PKN Orlen, PKN Orlen and the Company will, to the extent permitted by applicable laws, take the necessary organisational measures and cooperate to implement the Remedies, in particular to make it possible to specify how the Remedies are to be implemented and to manage their implementation on an ongoing basis based on mechanisms agreed between PKN ORLEN and the Company.

The State Treasury and PKN Orlen acknowledge their intention to carry out the Transaction and announce that as at the MoU date the scope and structure of the Transaction have not been defined yet.

Furthermore, within the limits permitted by applicable laws, the Company and PKN Orlen have undertaken to cooperate with the State Treasury in the consolidation process, in particular by providing the State Treasury with information necessary for the State Treasury’s analysis of the scope of the Remedies and for defining the scope and structure of the Transaction.

The MoU is not binding on, and does it give rise to any obligations for, the parties with respect to achieving the result of consummating the Transaction, but only defines their joint understanding of the expected structure of the Transaction and further cooperation in its implementation as at the MoU date. The State Treasury and PKN Orlen may enter into separate agreements or arrangements to govern more specifically or differently the Transaction structure and other pertinent matters.

The MoU expires on March 31st 2022.

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