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Current Report No.: 10/2017

Title: Acquisition of 100% of shares in ENGIE Energia Polska S.A.
Date: 2017.14.03
Report no.:  Current Report No.: 10/2017

Current Report No.: 10/2017

Date of preparation: 14.03.2017

Short name of issuer: Enea S.A.

Subject: Acquisition of 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") informs that on 14 March 2017 the issuer acquired 100% of shares in ENGIE Energia Polska S.A. ("EEP"), i.e. 7,135,000 shares of the nominal value of PLN 100 each, entitling to a total of 7,135,000 votes at a General Meeting of ENGIE Energia Polska S.A., for the initial price of PLN 1,264,159,355, of which the Company informed in the current report No. 8/2017 of 3 March 2017. The initial price will be revised by the Company and potentially adjusted, subject to the terms specified in the conditional agreement on sale of 100% of shares in EEP concluded with ENGIE International Holdings B.V. dated 23 December 2016 ("Agreement"), pursuant to the market standards applying to this type of transactions.

The information relating to the Agreement and the above mentioned transaction were published by the Company in current reports No. 46/2016, 7/2017 and 8/2017.

The shares were acquired in the majority from the Company's own funds, including the funds obtained as part of the first public issue, and also issue of bonds conducted within the programme guaranteed by Bank Gospodarstwa Krajowego S.A.

Taking over the control over EEP is in line with Enea Capital Group's Development Strategy until 2030. The investment will contribute to the integration of cost- and operation-efficient Kozienice - Bogdanka - Połaniec area of mining and generation based on its own resource. Połaniec Power Plant, being a part of EEP, is one of the most efficient electricity generators in Poland which has implemented a ca. PLN 1.5 billion worth of an intensive modernisation programme during recent years (according to the group data of ENGIE, IFRS). The process extended the power plant's operation by over 20 years, increasing the efficiency of energy generation and adjusting the generating equipment to the environmental standards in force, including to the requirements of IED Directive. Połaniec Power Plant is also equipped with one of the largest biomass units in the world with the capacity of over 200 MW generating green energy. The transaction will positively affect the share of Enea Capital Group in the wholesale market of energy - extension of the revenue base and becoming independent from the wholesale market liquidity. The investment will also contribute to the growth in Group's revenue and EBITDA.

According to EEP's preliminary estimates, compliant with the Polish accounting principles, revenue from sale of the company for 2016 amounted to PLN 2,472 million (including PLN 73 million from sales of CO2 emission allowances). EBITDA adjusted with a potential asset impairment write-offs amounted to PLN 359 million in 2016. EEP's working capital as at 31 December 2016 (defined as current assets adjusted with PLN 113 million debt repaid to ENGIE, minus short-term liabilities excluding loans) amounted to ca. PLN 600 million.

The total gross capacity installed in EEP amounts to ca. 1.9 GWe, which allowed for the generation of ca. 10.2 TWh electricity in 2016. Połaniec Power Plant fired ca. 3.9 Mt of coal and ca. 1.7 Mt of biomass.

For comparison, the capacity installed in Enea Capital Group as at the end of 2016 is 3.3 GWe, and according to the preliminary results sales of electricity and gaseous fuel to retail users amounted to 18.0 TWh with the total generation of 13.6 TWh.

According the Company's best knowledge, there are no relations between the Company, its managers or supervisors, and the seller - ENGIE International Holdings B.V., and its managers.

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.