27/2019 - Answers to the questions of shareholders of the Company granted in the mode of art. 428 § 5 of the Code of Commercial Companies

The Management Board of Trakcja PRKiI S.A. (‘Company’) provides answers to the following questions of the Company's shareholders submitted in accordance with art. 428 § 1 of the Code of Commercial Companies during the debates of the Extraordinary General Meeting of the Company on June 28, 2019:

1. What activities will involve the process of offering B series ordinary bearer shares of the Company (‘Series B Shares’) and ordinary C series shares of the Company (‘Series C Shares’) and what actions should the investor undertake to subscribe for the above shares?

Reply of the Company's Management Board:

1.  In accordance with the announced draft resolution regarding the increase of the Company's share capital (‘Issue Resolution’), the offer of Series B Shares and Series C Shares (collectively ‘New Shares’) will not require the approval and publication of the prospectus (the ‘Offer’). In connection with the planned share capital increase, the Company employed a financial adviser, which was announced by the Company in current report No. 4/2019 dated February 18, 2019. The financial advisor of the Company acting as an offering intermediary is mBank S.A. (‘Offering’).

2. According to preliminary findings made with the Offeror, if the Extraordinary General Meeting adopts the Issue Resolution, the process of offering New Shares will be as follows:

a) Immediately following the adoption of the Issue Resolution by the Extraordinary General Meeting, the book of demand will be created, to which eligible investors will submit, via the Offeror, demand declarations containing, inter alia, information on the price and number of shares that the investor is interested in. The investors who have been indicated in the text of the Issue Resolution will be invited to participate in building the book of demand.

b) Immediately after completing the book building, determining the issue price of the New Shares, the number of New Shares issued and the initial allocation of New Shares to investors, the Issuer will sign contracts with the investors to take up the New Shares (‘Agreements’). These agreements will specify, among others the manner and date of payment for the New Shares and will indicate the brokerage accounts on which the New Shares are to be posted. The Management Board points out that one of the conditions for subscription for New Shares will be payment for the subscription in the period provided for in the Agreement. The intention of the Company is to implement the Offer as quickly as possible, ie within a few working days of the adoption of the Issue Resolution.

Due to the fact that the Offer will be conducted through the Offeror as an investment company that is subject to detailed legal requirements set out in the Act of 29 July 2005 on trading in financial instruments and legal acts implementing the provisions of the MIFID II Directive, it will be necessary for an investor intending to participate in the Offer an appropriate agreement for the provision of brokerage services with the Offeror. In accordance with the arrangements made with the Offeror, eligible investors interested in participating in the Offer should contact (in advance) the Offeror in order to get acquainted with the tender procedure, sign an appropriate agreement for the provision of brokerage services (if they have not already concluded such a contract) and providing the necessary documentation (including the passage of the KYC procedure with the Offeror, which may take up to a week, depending on the case).

At the same time, the Management Board informs that the terms and conditions of the Offering may depend on the final wording of the Issue Resolution and are therefore subject to change and will be specified in the placement agreement that the Issuer intends to conclude with the Offeror after the Extraordinary General Meeting adopts the Issue Resolution and before the beginning of the Offer.

2. How did the Management establish the value of the shares?

Reply of the Company's Management Board:

At the moment of providing this answer, the issue price of the New Shares was not determined by the Management Board.

If the Extraordinary Shareholders Meeting adopts an Issue Resolution and the Offering, the issue price of the New Shares will be determined on the terms specified in the Issue Resolution, ie by the Management Board, after prior approval of the Company's Supervisory Board. The Management Board, when determining the issue price of New Shares, will have regard to the course and outcome of the book building process, under which investors will submit, via the Offeror, demand declarations containing, among others, information regarding the price and the number of New Shares to which the investor is interested. In the opinion of the Management Board, the above method of determining the issue price of New Shares is a market standard and is typical for private offers of shares carried out in Poland. In addition, the Management Board informs that if a resolution is adopted to determine the issue price of New Shares, as well as obtaining the approval of the Company's Supervisory Board, it will immediately disclose relevant information in the form of a current report to the public.

Legal basis:

§ 19 para. 1 point 12 of the Regulation of the Minister of Finance dated March 29, 2018 regarding current and periodic information published by issuers of securities and conditions for recognizing as equivalent information required by the laws of a non-member state.