PGNiG's shares buy-back

This invitation to submit offers (this “Invitation”) does not constitute a tender offer for shares referred to in Article 72 and subsequent articles of the Act on Public Offering. Specifically, this Invitation is not subject to Articles 77 and 79 of the Act on Public Offering or the Regulation on Forms of Tender Offers. This Invitation does not constitute an offer within the meaning of Article 66 of the Civil Code. This Invitation also does not constitute an offer to buy or the solicitation of an offer to sell any securities, specifically, in any jurisdiction in which such offer or solicitation is unlawful or would impose any unfulfilled obligation regarding registration, publication or approval or registration. This Invitation is not to be construed as investment consultancy or an investment, legal or tax advice. With regard to any matters related to this Invitation shareholders should consult their own investment, legal and tax advisors. Shareholders responding to this Invitation will bear all legal, financial and tax consequences of any investment decisions they have taken.

INVITATION TO SUBMIT OFFERS FOR THE SALE OF THE SHARES IN POLSKIE GÓRNICTWO NAFTOWE I GAZOWNICTWO S.A.
(a joint-stock company with its registered office in Warsaw and address at ul. Marcina Kasprzaka 25,
registered in the Register of Business Entities of the National Court Register
under number 0000059492
)

This Invitation to submit offers for the sale of the shares in Polskie Górnictwo Naftowe i Gazownictwo S.A. with its registered office in Warsaw, postal address ul. Marcina Kasprzaka 25, Warsaw, (the “Company”) was published on 4 November 2016 in connection with the Buy-back of the Treasury Shares on the terms as provided in the Management Board Resolution.

1.Purchased Shares

This Invitation applies to up to 37,105,802 (thirty-seven million, one hundred and five thousand, eight hundred and two) dematerialised ordinary bearer shares with a nominal value of PLN 1.00 each, issued by the Company and registered by the NDS under ISIN code PLPGNIG00014, which represent no more than 0.63% of the share capital of the Company and entitle the holders thereof to exercise no more than 0.63% of the total number of votes at the general meeting of the Company (the “Purchased Shares”, each a “Purchased Share”).

Each Purchased Share entitles the holder thereof to exercise one vote at the general meeting of the Company. The Purchased Shares are traded on the regulated market operated by the WSE.

2.Purchase Price

The proposed purchase price of the Purchased Shares is PLN 5.00 (five and 00/100) per Purchased Share (the “Purchase Price”).

3.Brokerage firm which will facilitate the conducting and settlement of the Buy-back of the Treasury Shares

The brokerage firm which will facilitate the conduct and settlement of the Buy-back of the Treasury Shares is:

Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna
Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie
ul.
Puławska 15, 02-515 Warsaw
tel. +48 22 521 80 10 and + 48 22 521 80 12, fax +48 22 521 79 46

dm@pkobp.pl, www.dm.pkobp.pl
(the “Brokerage House”)

4.Timetable for the Buy-back of the Treasury Shares

Date of the publication of the Invitation:

4 November 2016

Commencement date of the period for accepting Sale Offers:

7 November 2016

Closing date of the period for accepting Sale Offers:

8 November 2016, 4 pm Warsaw time

Expected date of the execution of the transaction involving the purchase of the Purchased Shares in off-market block transactions:

10 November 2016

Expected date of the transfer of the Purchased Shares in an off-market transaction and of the settlement of the transactions involving the purchase of the Purchased Shares in block transactions:

14 November 2016

 

The Company reserves the right to withdraw from the Buy-back of the Treasury Shares or the Further Buy-back of the Treasury Shares at any time, including after the commencement of the period for the acceptance of the Sale Offers, and to change any future scheduled dates relating to the Buy- back of the Treasury Shares. In the event that the Buy- back of the Treasury Shares or the Further Buy-back of the Treasury Shares is cancelled or that the dates regarding the Buy- back of the Treasury Shares are changed, the relevant information will be made available to the public in the form of a current report and published on the websites of the Company (www.pgnig.pl) and the Brokerage House (www.dm.pkobp.pl).

5.Entities entitled to sell Purchased Shares

Entities entitled to submit Sale Offers in response to this Invitation are all of the Shareholders, i.e. the entities who have Shares registered in their securities accounts and in the securities accounts (omnibus accounts) kept for them, at the moment of accepting the Sale Offers.

The shares offered in response to the Invitation must be free from any Encumbrances.

6.Procedure of submission of Sale Offers

The Shareholders are recommended, prior to the submission of Sale Offers, to review the procedures and regulations of the Depository Banks and investment firms keeping the securities accounts in which the shares are registered, governing the issuance of depository certificates and the establishment and release of blockades on shares, specifically the dates applied by a given investment firm or Depository Bank, as well as the fees charged by the investment firms or Depository Banks for the aforementioned actions.

Sale Offers may be submitted by specific Shareholders acting individually or by groups of Shareholders. A group of Shareholders will be Shareholders whose depository certificates confirming the number of Shares owned thereby are attached to the Sale Offer or the Sale Offers (depending on whether one or several Shareholders in a specific group decide to sell Shares) at the time of the submission thereof thereby (each a “Group of Shareholders”). In a single Group of Shareholders shares may be transferred by one, several or all Shareholders who are members of the group. Submission of Sale Offers by several Shareholders selling Shares within the scope of a single Group of Shareholders must occur simultaneously and in the same Customer Service Point, provided that Sale Offers may be submitted through a proxy in accordance with section 7 below. One Shareholder may belong to a single Group of Shareholders only.

Shareholders may submit Sale Offers at the Customer Service Points listed in Schedule No. 1 to this Invitation, in the period for accepting Sale Offers (i.e. from 7 November to 4 pm (Warsaw time) on 8 November 2016), on business days (except for Saturdays), during the office hours of the Customer Service Points listed in Schedule No. 1.

Shareholders who intend to submit Sale Offers at Customer Service Points need to take the following actions:

  1. submit at the given Customer Service Point a filled out and signed Sale Offer substantially in the form of Schedule No. 2 hereto, in two copies, one for the Shareholder submitting the Sale Offer and one for the Brokerage House;
  2. submit at the given Customer Service Point the original depository certificate(s) issued by the entity keeping the securities account for the Shareholder or the Shareholders who are part of the Group of Shareholders, confirming
    1. that the Shares have been blocked until the date of settlement of the Buy-back of the Treasury Shares (inclusive) (it is expected that the settlement will occur no later than on 14 November 2016) and
    2. that an irrevocable order of sale has been submitted in response to the Buy-back of the Treasury Shares (applicable exclusively to the depository certificates for the Treasury Shares submitted for sale).

Additionally, each Shareholder submitting a Sale Offer needs to present:

  1. an identity document or passport (for individuals);
  2. an excerpt from the relevant register relating to the Shareholder (for Residents other than individuals); or
  3. an excerpt from the relevant register relating to the Shareholder or any other official document containing the basic details of the Shareholder, including their legal status, manner of representation and the names of the persons authorised to represent the Shareholder (Non-Residents other than individuals). If the provisions of applicable law or of an international convention to which the Republic of Poland is a party do not stipulate otherwise, the aforementioned excerpt must be apostilled or certified by a Polish representative office or consular office and translated by a sworn translator into the Polish language.

If a Sale Offer is submitted by an attorney-in-fact, the Shareholder should consult section 7 below regarding representation by an attorney-in-fact.

In order to standardise the documents required to submit Sale Offers, a set of relevant document forms will be made available at each of the Customer Service Points listed in Schedule No. 1 to this Invitation.

If the number of shares in the Company indicated in the Sale Offer does not fully correspond to the number of shares specified in the attached depository certificate or is greater than the number of the blocked Shares, such Sale Offer will be considered invalid. During the period of accepting Sale Offers each Shareholder may submit one Sale Offer only.

Sale Offers are irrevocable and may not contain any reservations or conditions. Sale Offers bind the Shareholder until the settlement of the Buy-back of the Treasury Shares (it is expected that the settlement will occur no later than on 14 November 2016) or until the date of its cancellation. Each Shareholder shall bear any consequences, including the invalidity of the Sale Offer, resulting from the incorrect or incomplete filling out of a Sale Offer form or depository certificate.

Sale Offers may not be submitted by mail or in electronic form.

7.Representation by an attorney-in-fact

The entities entitled to sell the Shares under the Buy-back of Treasury Shares, referred to in section 5 above, may be represented by a duly authorised attorney-in-fact when submitting Sale Offers. Each person acting as an attorney-in-fact is required to present to an employee of the Customer Service Point accepting the Sale Offer, a power of attorney in accordance with the requirements described in this section.

A power of attorney must be prepared in writing, with the signature thereon certified by an employee of the Brokerage House, an employee of the entity which has issued the depository certificate for the given principal, or a notary. A power of attorney may also be prepared in the form of a notarial deed.

A power of attorney granted abroad must be apostilled or otherwise certified by a Polish representative office or consular office and translated by a sworn translator into the Polish language.

A power of attorney must contain the following details of the attorney-in-fact and the principal:

  1. For individuals (Resident or Non-Residents) (i) full name, (ii) address, (iii) identity document number and PESEL number or the passport number; and (iv) in the case of a Non-Resident – his or her nationality.
  2. For Residents other than individuals: (i) business name, registered office and postal address; (ii) name of the registry court; (iii) KRS number; and (iv) REGON number.
  3. For Non-Residents other than individuals: (i) full name, registered seat and postal address; (ii) name of the relevant register or other official document; and (iii) number of the relevant registry or other official document.

Additionally, a power of attorney must set forth the scope of authorisation.

In addition to the power of attorney, the person acting as an attorney-in-fact must present the following documents:

  1. an identity document or passport (individuals);
  2. an excerpt from the relevant register relating to the attorney-in-fact (Residents other than individuals); or
  3. an excerpt from the relevant register relating to the attorney-in-fact or any other official document containing the basic details of the attorney-in-fact, including their legal status, manner of representation and the names of the persons authorised to represent the attorney-in-fact (Non-Residents other than individuals) – if the provisions of the applicable laws or of an international convention to which the Republic of Poland is a party do not stipulate otherwise, the aforementioned excerpt must be apostilled or certified by a Polish representative office or consular office and translated by a sworn translator into the Polish language;
  4. an excerpt from the relevant register relating to the Shareholder (Residents other than individuals); or
  5. an excerpt from the relevant register relating to the Shareholder or any other official document containing the basic details of the Shareholder, including their legal status, manner of representation and the names of the persons authorised to represent the Shareholder (Non-Residents other than individuals). If the provisions of the applicable laws or of an international convention to which the Republic of Poland is a party do not stipulate otherwise, the aforementioned excerpt must be apostilled or certified by a Polish representative office or consular office and translated by a sworn translator into the Polish language.

A Depository Bank acting on behalf of its customers must submit, together with the relevant Sale Offer form, a representation in the form attached as Schedule No. 3 to this Invitation.

Each person acting in his or her capacity as an attorney-in-fact may represent any number of Shareholders.

The excerpt from the relevant register relating to the Shareholder or any other official document containing the basic details of the Shareholder, including their legal status, manner of representation and the names of the persons authorised to represent the Shareholder and the power of attorney (or copies thereof) will be retained by the Brokerage House.

8.Withdrawal from the Buy-back of the Treasury Shares or the Further Buy-back of the Treasury Shares

The Company reserves the right to cancel or withdraw from the Buy-back of the Treasury Shares or the Further Buy-back of the Treasury Shares at any time, including before and after the commencement of the period of accepting Sale Offers.

If the Buy-back of the Treasury Shares or the Further Buy-back of the Treasury Shares is cancelled, relevant information will be published by way of a current report of the Company and published on the Company’s website (www.pgnig.pl) and on the website of the Brokerage House (www.dm.pkobp.pl).

If the Buy-back of the Treasury Shares or the Further Buy-back of the Treasury Shares is cancelled or withdrawn, neither the Company nor the Brokerage House will be responsible for reimbursing the shareholders, their attorneys-in-fact or statutory representatives for any costs incurred thereby in connection with the submission of Sale Offers or any actions necessary to submit Sale Offers, or for the payment of any damages.

9.Purchase of Shares from the Shareholders and the rules of reduction

The Company will accept Sale Offers submitted in the period for accepting Sale Offers in accordance with the rules described below.

Following the completion of the Buy-back of the Treasury Shares, the Company will hold no more than 37,105,802 (thirty-seven million, one hundred and five thousand, eight hundred and two) Shares representing no more than 0.63% of the share capital of the Company and 0.63% of all the Shares.

No fractions of Shares will be purchased within the scope of the Buy-back of the Treasury Shares or the Further Buy-back of the Treasury Shares.

If the total number of Shares covered by all the Sale Offers duly submitted by the Shareholders (acting individually or within a Group of Shareholders) in the period of accepting Sale Offers is greater than the number of the Purchased Shares, the Company will reduce the number of the shares covered by the Sale Offers based on the following rules:

  1. The share of each Shareholder or a Group of Shareholders, respectively, in the total number of Shares held by all the Shareholders or Groups of Shareholders participating in the Buy-back of the Treasury Shares will be determined (the number of the Shares will be confirmed by the submitted depository certificates and blocked within the scope of the Sale Offers).
  2. As a result of any such reduction, the Company will acquire from each Shareholder or Shareholders in a single Group of Shareholders such total number of Shares which will not be greater than:

(i)the total number of Shares designated in the Sale Offer(s) and blocked;

and, at the same time

(ii)the number determined in accordance with the following formula:

LAmax = LAN * (LAOA / LAO)

LAmax means the maximum number of Shares acquired by the Company from a specific Shareholder or Shareholders who are members of a specific Group of Shareholders, provided that, if such number is not an integer, it will be rounded down to the nearest integer. In the case of a Group of Shareholders where Sale Offers were submitted by more than one Shareholder, the number of Shares acquired by the Company from the specific Shareholders who are members of a group will be divided pro rata to the number of Shares submitted thereby for sale. If, as a result of such pro rata reductions there remain any Shares which are not allotted to specific Shareholders who are part of one group, those will be allotted to the Shareholder who offered the largest number of Shares for sale within such Group of Shareholders.

LAN means the total number of the Purchased Shares.

LAOA means the total number of Shares belonging to a given Shareholder or a Group of Shareholders as stated in the depository certificates attached to the Sale Offers and blocked.

LAO means the total number of Shares held by all of the Shareholders and Groups of Shareholders participating in the Buy-back of the Treasury Shares as evidenced by all the depository certificates attached to all the duly submitted Offers of Sale and blocked.

The Company will accept only Sale Offers submitted in accordance with the terms and conditions of the Buy-back of the Treasury Shares as determined in this Invitation. Specifically, no Sale Offers with incorrect or incomplete forms of the Sale Offers or offers to which no depository certificate has been attached or the attached depository certificate is incorrect, will be accepted. Furthermore, no Sale Offers received prior to the opening or after the closing of acceptance of Sale Offers, or any illegible Sale Offers, will be accepted.

The transfer of Shares between Shareholders who submit correct Sale Offers and the Company will be performed by way of block transactions or outside organised trading and settled within the depository and settlement system of the NDS. The Brokerage House will be the intermediary for the purposes of the settlement.

10.Payment of the Purchase Price

All of the Purchased Shares in the number determined in accordance with the rules determined in section 9 above will be paid for by the Company. The product of the final number of the Purchased Shares purchased from particular Shareholders participating in the Buy-back of the Treasury Shares and the Purchase Price will be transferred in accordance with the regulations applicable to the depository and settlement system of the NDS.

For the purposes of the settlement of the Buy-back of the Treasury Shares, the Company has established collateral having a value of at least the product of the Purchase Price and the number of the Purchased Shares, by blocking cash in an investment account maintained by the Brokerage House.

11.Redemption of the Shares

Following the settlement of the Buy-back of the Treasury Shares and the registration of the Purchased Shares in the securities account of the Company, the management board of the Company will convene an extraordinary general meeting to adopt relevant resolutions regarding the redemption of the Shares acquired within the scope of Buy-back of the Treasury Shares and the decrease of the Company’s share capital.

12.Legal nature of this Invitation

This Invitation does not constitute a tender offer to subscribe for the sale or exchange of shares referred to in Article 72 and subsequent articles of the Act on Public Offering. Specifically, Article 77 and 79 of the Act on Public Offering and the Regulation on Forms of Invitations do not apply to this Invitation. Additionally, this Invitation does not constitute an offer within the meaning of Article 66 of the Civil Code.

This document does not require the approval of or notification to the Polish Financial Supervision Authority or to any other authority.

This document does not constitute an offer to buy or the solicitation of an offer to sell any securities, specifically, in any jurisdiction in which such offer or solicitation is unlawful or would impose any unfulfilled obligation regarding registration, publication or approval or registration.

This document is not to be construed as investment consultancy or an investment, legal or tax advice. With regard to any matters related to this Invitation each investor should consult its own investment, legal and tax advisors.

This Invitation was published by the Company by way of a current report. The Invitation is also available on the Company’s website (www.pgnig.pl) and the Brokerage House’s website (www.dm.pkobp.pl).

Any additional information on the procedure of accepting Sale Offers in response to this Invitation may be obtained in person at the Customer Service Points or by telephone on number [●], or at the offices of the Brokerage House at tel. +48 22 521 80 10 and +48 22 521 80 12.

13.Taxation

The sale of Shares to the Company for the purpose of their redemption may result in tax consequences for the Shareholders. For those reasons all the Shareholders, prior to the adoption of the investment decision, need to seek the advice of tax advisors.

14.Definitions and abbreviations used in the Invitation

Shares

mean dematerialised ordinary bearer shares in the Company, with a nominal value of PLN 1.00 each, marked by the NDS with ISIN code PLPGNIG00014.

Purchased Shares

means no more than 37,105,802 (thirty-seven million, one hundred and five thousand, eight hundred and two)  Shares.

Shareholder

means any shareholder of the Company.

Depository Bank

means a bank keeping securities accounts within the meaning of Article 119 of the Act on Trading in Financial Instruments.

Purchase Price

means the price of the purchase of the Purchased Shares, i.e. PLN 5.00 (five and 00/100) per Purchased Share.

 

 

Brokerage House

means Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie, ul. Puławska 15, 02-515 Warsaw.

WSE

means the Warsaw Stock Exchange (Giełda Papierów Wartościowych w Warszawie S.A.).

Group of Shareholders

means the Shareholders whose depository certificates confirming the number of the Shares owned thereby will be attached to the Sale Offer(s) (if several Shareholders in a Group of Shareholders decide to sell the Shares) at the time of the submission thereof.

NDS

means the National Depository for Securities (Krajowy Depozyt Papierów Wartościowych S.A.).

Civil Code

means the Act of 23 April 1964, the civil code (consolidated text: Journal of Laws of 2016, item 380, as amended).

Non-Resident

means persons, entities and organisational units within the meaning of Article 2 section 1 Item 2 of the Foreign Exchange Law.

Encumbrances

means an ordinary pledge, fiscal pledge, registered pledge or financial pledge, the attachment in the execution proceedings, an option, pre-emption rights or any other priority right or any other right, encumbrance or restriction in favour of third parties, either in rem or in personam (also based on the articles of association).

Sale Offer for the Shares, Sale Offer

means Sale Offer for the shares submitted by the Shareholders in response to the Invitation.

Invitation

this invitation to submit offers for the sale of shares in the Company, addressed to all of the Shareholders.

Customer Service Point

means a Customer Service Point of the Brokerage House.

Foreign Exchange Law

means the Act of 27 July 2002, the foreign exchange law (consolidated text: Journal of Laws of 2012, item 826, as amended).

Residents

means persons, entities and organisational units within the meaning of Article 1(1) of the Foreign Exchange Law.

Regulation on Forms of Tender Offers

means the regulation of Minister of Finance dated 19 October 2005 regarding forms of tender offers to subscribe for the sale or exchange of shares in a public company, the detailed procedure of announcing such tender offers, and the terms and conditions of acquiring shares as a result of such tender offers (Journal of Laws of 2005, item 1729, as amended).

Buy-back of Treasury Shares

means the Buy-back of the Purchased Shares for the purposes of the redemption thereof pursuant to this Invitation and the Management Board Resolution.

Company

means Polskie Górnictwo Naftowe i Gazownictwo S.A. with its registered office in Warsaw, ul. Marcina Kasprzaka 25.

 

 

Management Board Resolution

means resolution No. 614/2016 of the management board of the Company of 4 November 2016 regarding the buy-back of treasury shares and the determination of the detailed terms and procedure of the buy-back of treasury shares

Act on Trading in Financial Instruments

means the Act of 29 July 2005 on trading in financial instruments (consolidated text: Journal of Laws of 2014, item 94, as amended).

Act on Public Offering

means the Act of 29 July 2005 on public offering, the conditions for the introduction of financial instruments to organised trading, and on public companies (consolidated text: Journal of Laws of 2013, item 1382, as amended).

Full text of the Invitation