Current Report No. 26/2019

Date: 29 August 2019

Subject: Creation of a provision by a subsidiary

Legal basis: Article 17(1) of the MAR – Confidential information.

The Management Board of ENERGA SA hereby informs that on 29 August 2019 it learned that a subsidiary – Energa-Obrót SA – has created a provision in the amount of PLN 31.2 million. The provision was created in connection with the final judgment of the Court of Appeal in Gdańsk dismissing the action of Energa-Obrót SA in one of the cases referred to in current report no. 37/2017 of 11 September 2017.

The provision was created in order to secure financial resources for possible future payment of any contractual penalties resulting from framework contracts for the sale of property rights resulting from renewable energy certificates. As of today, the provision created fully secures claims against Energa-Obrót SA in case of their possible future payment.

The estimated impact on the EBITDA of the ENERGA Group for the first half of 2019 is PLN 31.2 million.

The creation of the provision is not tantamount to a change in the position presented by Energa-Obrót SA regarding the invalidity of the contracts referred to in current report No. 37/2017 of 11 September 2017. Energa-Obrót SA has the right to file a cassation appeal against the above-mentioned final judgment.

So far, Energa-Obrót SA has concluded five settlements with the defendant wind farms, and is conducting court disputes and negotiations with other entities, which may result in further settlements, i.e. ultimately an amicable conclusion of the disputes.