Currenr Report No. 48/2020

Date: 29 May 2020

Subject: Fitch Ratings downgrades Energa SA rating

Legal basis: Article 17 (1) of MAR – inside information

The Management Board of Energa SA ("Company") informs that, on 29 May 2020 Fitch Ratings ("Agency", "Fitch") downgraded the Company’s long-term foreign and local currency Issuer Default Ratings (IDRs) from 'BBB' to 'BBB-' with a Stable Outlook, rating for the bonds issued by the Company's subsidiary Energa Finance AB (publ) to 'BBB-', and rating for Energa SA’s hybrid bonds to 'BB'. At the same time, the Company’s rating was removed from the Rating Watch Negative list, about the placement on which the Company informed in Current Report No. 34/2019 of 10 December 2019.

The main reason for the downgrade as provided by the Agency is the acquisition of the Company - effective from 30 April 2020, PKN ORLEN S.A. (“PKN ORLEN”) acquired 80.01% of shares in the share capital of Energa SA and 85.20% of the total number of votes in the Company. Therefore, in Fitch's opinion, actions resulting in operational and strategic integration with PKN ORLEN will take place, which implies the need to bring the rating in line with the rating of PKN ORLEN ('BBB-'). The Agency emphasizes the fact that Energa SA’s standalone credit profile continues to be assessed at 'bbb', thanks to, among others, the stability of the Distribution Business Line, with low risks, a high share in the Group's EBITDA, and predictability of cash flows. Fitch also welcomes the proposal to halt the Ostrołęka C project in the coal formula and to consider a switch to the gas formula.

The full text of the Agency's report is available on the Fitch Ratings website.