Current report no.: 12/2018

Date of preparation:  28.05.2018

Abbreviated name of the Issuer: CIECH S.A.

Subject: Acquisition of 75% of the shares of Proplan Plant Protection Company, S.L.

Legal basis: Art. 17. 1 of the MAR – Inside Information

The Management Board of CIECH S.A. (the “Company”) informs that on 28 May 2018 the Company signed a sale and purchase agreement (the “Transaction”) whereby the Company will acquire 18,750 shares representing 75% of share capital of Proplan Plant Protection Company, S.L. (“Proplan”, “Proplan Shares”), a Spanish company with more than 25 years of experience in the plant protection products, specialized in registering, manufacturing and distributing fungicides, herbicides, insecticides, growth regulators. Proplan produces and sells generic products of crop protection. It operates in European Union, mostly in Spain and other continents – mostly in Australia and Africa.  Revenue of Proplan for 2017 amounted to approx. 16 mln EUR at high operating profit margins. Proplan hold portfolio of more than 120 product registrations and material assets of intellectual property.

The Management Board has decided to enter into the Transaction following the development plans of the CIECH Group regarding plant protection chemistry. In the Company’s opinion, the Transaction would provide synergies between CIECH Group and Proplan. The implementation of the Transaction will significantly expand the product portfolio of the CIECH Group’s Crop Protection business and enable its geographic diversification.

Closing of the Transaction by way of acquisition of the Proplan Shares will take place by means of a transfer deed that will be executed between 2 July 2018 and 31 July 2018, subject to the previous fulfillment of certain standard pre-closing undertakings from the sellers. The purchase price for the Proplan Shares will be EUR 33,461,391. An amount equivalent to 10% of the purchase price shall be deferred and paid in equal instalments between 2019 and 2022.

On 28 May 2018 the Company also signed the shareholders’ agreement in relation to the remaining 6,250 shares representing 25% of the share capital of Proplan (the “Additional Proplan Shares”), which shall enter into force upon closing of the Transaction. The shareholders’ agreement includes the call option by the Company and put option by the Proplan shareholder relating to the Additional Proplan Shares. The call and put options can be exercised (i) once certain legal proceedings relating to the Additional Proplan Shares are finished, and depending on the term and the outcome of such proceedings, the Company will acquire all, part or none of those remaining shares, and (ii) once the Company receives evidence that the Additional Proplan Shares are free of liens, encumbrances and third-party rights. The strike price per Additional Proplan Shares  under the put and call options will based on the price agreed for the Proplan Shares in the Transaction.

On 28 May 2018 the Supervisory Board of the Company issued consent to enter into the Transaction and to sign the shareholders’ agreement in relation to the Additional Proplan Shares.

At the same time, the Management Board of the Company hereby informs that pursuant to Art. 17.4 of the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (the “MAR”), on 26 January 2018 it has decided to delay disclosure to the public of information concerning the negotiation process aimed at the purchase of Proplan shares by the Company, determining the transaction structure and the contents of the agreement. The Company’s decision is caused by the fact that immediate disclosure was likely to prejudice the legitimate interests of the Company by the negative impact on the Transaction and the potential misleading information  . Acting based on Art. 17.4 of the MAR, the Company will provide the Polish Financial Supervisory Authority information on delay of any disclosure to the public of inside information together with written explanations.

Signatures of individuals representing the Company:

Artur Osuchowski – Member of the Management Board
Artur Król – Member of the Management Board