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Current Report No.: 8/2017

Title: Stipulation of the initial price for 100% of shares in ENGIE Energia Polska S.A.
Date: 2017.03.03
Report no.:  Current Report No.: 8/2017

Current Report No.: 8/2017

Date of preparation: 3.03.2017

Short name of issuer: Enea S.A.

Subject: Stipulation of the initial price for 100% of shares in ENGIE Energia Polska S.A.

Legal basis: Article 17 item 1 of MAR - confidential information

The Management Board of Enea S.A. ("Company"), in relation to the current report of 23 December 2016 No. 46/2016 ("Report") relating to the conclusion of a conditional agreement for the sale of 100% of shares in ENGIE Energia Polska S.A. ("EEP") ("Agreement") informs that yesterday ENGIE International Holdings B.V. ("Seller") provided it with the calculation of the initial selling price for 100% shares in EEP amounting to PLN 1,264,159,355 ("Initial Selling Price").

Pursuant to the received EEP's initial balance sheet as at 31 December 2016, taking into account the partial cash repayment in February 2017 of EEP's debt (in the amount of PLN 113 million) and conversion of the whole remaining debt of EEP to equity, the selling price for 100% of shares in EEP corresponds to the enterprise value (EV) on the level of PLN 995 million as at 31 December 2016.

According to the received EEP's initial financial data in the Polish accounting standards EEP's EBITDA in 2016 amounted to PLN 359 million and operating profit to PLN 269 million. The above mentioned financial results include revenue from allocated free CO2 emission allowances in the amount of PLN 73 million, which during next years will be considerably decreased.

The Initial Selling Price was determined in accordance with the terms of the Agreement, as stated in the Report, i.e. in relation to the enterprise value of ENGIE Energia Polska S.A. stipulated on the level of PLN 1,073,140,672.00, taking in particular into account the values as at 31 December 2016, including:

• the level of net debt, i.e. the balance of cash (demonstrated by the Seller on the level of PLN 382 million) and debt (demonstrated by the Seller on the level of PLN 1,337 million),

• the conversion performed in February 2017 of the above mentioned debt to equity in the amount of PLN 1,223 million and utilisation of cash in the amount of PLN 113 million for the repayment of the remaining part of the debt (the surplus of cash over the part used for debt repayment remained in EEP),

• the level of working capital excluding cash (demonstrated by the Seller on the level of PLN 58 million).

The Initial Selling Price will be subject to verification by the Company and to potential adjustments in the period occurring directly after taking the control over EEP, under the terms specified in the Agreement, compliant with the market standards applying to such transactions.

Having in mind the diverse and international nature of Enea SA's shareholding, and also the provisions of the Best Practices of WSE Listed Companies, Enea SA guarantees the availability of its website also in English. In case of any interpretation doubts and discrepancies between the Polish and English versions, the Polish version shall prevail.