Current Report No. 23/2016

Subject: Information on purchase of bonds issued by ENERGA SA by a subsidiary

Legal basis: Article 56 Section 1 Item 1 of the Act on Offerings - confidential information

The Management Board of ENERGA SA (Energa, Issuer) hereby announces that on 16 June 2016, in connection with completion of the negotiation process conducted by Energa's subsidiary ENERGA-OPERATOR SA (Subsidiary) and selected Bondholders with regard to the terms and conditions of purchase, by the Subsidiary, of series A bonds issued by the Issuer, on the same day a transaction was concluded under which the Subsidiary acquired 55,795 series A bonds issued by Energa with the total par value of PLN 557.95 million (Bonds).

The Bonds were purchased by the Subsidiary at the price of PLN 102.85 as part of a process of optimization of the Issuer's financing structure, on the basis of resolutions adopted by the Issuer's and the Subsidiary's Management Board and Supervisory Board. The purchase of the Bonds was financed with cash and funds from available credit facilities.

Series A Bonds were issued by Energa in 2012 for the total amount of PLN 1,000 million under the Domestic Bond Program with the maturity of 18 October 2019. The terms and conditions of issue of series A domestic bonds are presented in the prospectus available on the Issuer's website. The prospectus has been prepared to enable trading in the bonds in the regulated market - Catalyst.

The purchase of the bonds is associated with optimization of the financing structure and cash management in the ENERGA Group. The above actions have been taken in the context of the dynamic changes in the financial and legal environment of the ENERGA Group.

As at the date of this current report, ENERGA Group's debt amounted to PLN 5.8 billion and was comparable to the debt level at the end of Q1 2016. The Management Board evaluates the Issuer's financial standing as stable and providing grounds for dividend payout and continuation of the investment processes.

At the same time, the Issuer announces that the information on the circumstances of commencing the negotiations on the purchase of the Bonds by the Subsidiary from the existing bondholders, and the related necessity to obtain the required corporate approval, was on 17 May 2016 delayed by the Issuer pursuant to Article 57 Section 1 of the Act on Public Offerings of 29 July 2005 [...] since publication of this information could prejudice the Issuer's legitimate interests.