Agreement concerning the plan of merger of Grupa LOTOS S.A. with PKN Orlen S.A. and determination of the exchange rate of the shares in Grupa LOTOS S.A. into the shares in PKN Orlen S.A.
Report no. 10/2022 2022-06-02

In reference to the current reports No. 21/2020, 10/2021, 15/2021, 16/2021, 40/2021, 41/2021 and 1/2022 Grupa LOTOS S.A. (the “Company”) informs that, on June 2nd 2022, the Company and PKN ORLEN S.A. (“PKN ORLEN”) have reached a written agreement concerning the merger plan (the “Merger Plan”). The merger will be based on Article 492 § 1(1) of the Commercial Companies Code by transfer of the entire assets of the Company (the target) to PKN Orlen (the surviving entity) in exchange for the shares which will be assigned to the Company shareholders by PKN Orlen (the “Merger”).

In connection with the Merger PKN ORLEN will conduct a public offering of shares issued within the scope of the Merger process (the “Merger Shares”) and addressed to the Company shareholders. Such public offering is subject to exclusion from the obligation of drafting a prospectus on condition of drafting and publishing an exemption document made in compliance with the Commission Delegated Regulation (EU) 2021/528 of 16 December 2020 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the minimum information content of the document to be published for a prospectus exemption in connection with a takeover by means of an exchange offer, a merger or a division, in conjunction with Article 1(4)(g), Article 1(5)(f) and Article 1(6) of the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (the “Regulation 2017/1129”) (the “Exemption Document”). The Exemption Document will not be subject to verification or approval by the relevant authority in accordance with Article 20 of the Regulation 2017/1129, and specifically it will not be subject to the approval of the Polish Financial Supervision Authority.

Based on the Merger Plan, the Company shareholders, in exchange for their shares in the Company, will be issued the Merger Shares in connection with the Merger at the ratio of: 1.075 (shares in PKN ORLEN) : 1 (shares in the Company) (the “Share Exchange Ratio”). The above needs to be understood as meaning that in exchange for 1 (one) share in the Company the Company shareholders will receive 1.075 shares in PKN ORLEN (Merger Shares), provided that the number of the allotted shares will be a natural number and in exchange for any unallotted fractions of the Merger Shares resulting from the application of the Share Exchange Ratio the Company shareholders will receive additional payments on the terms as determined in the Merger Plan.

The Merger Plan and other documents published by the Company in connection with the Merger are available on the investor relations webpage of the Company in the Merger with PKN Orlen bookmark on the  https://inwestor.lotos.pl/en webpage.

Legal basis: Article 17(1) and Article 17(4) of the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC