Current Report No.: 26/2020

Date of preparation: 20.07.2020

Abbreviated name of the Issuer: CIECH S.A.

Subject: Disclosure of delayed inside information on the commencement of negotiations with a prospective investor with regard to the sale of Ciech Żywice Sp. z o.o.

Legal basis: Art. 17.4 of the MAR – notice of delayed disclosure of inside information. 

Report:

With reference to Current Report No. 34/2018 of 5 December 2018, in which the Company informed on the adoption of the CIECH Group’s Strategy for 2019-2021, Current Report No. 8/2019 of 19 March 2019, in which the Company informed on the commencement of a detailed review of options for changes in the corporate and organisational structure and in the structure of assets of the CIECH Group, Current Report No. 42/2019 of 11 October 2019, in which the Company advised on the commencement of the review of strategic options, relevant to the Resins business area, Current Report No. 45/2019 of 31 October 2019, in which the Company informed on the adoption by the Issuer's direct subsidiaries, CIECH Sarzyna S.A. (“CIECH Sarzyna”) and CIECH Żywice sp. z o.o. (“CIECH Żywice”), of a plan of the division of CIECH Sarzyna by transferring the Resins business area to CIECH Żywice, Current Report No. 47/2019 of 25 November 2019 on the adoption of the concept of reorganisation of the CIECH Group, and Current Report No. 1/2020 of 2 January 2020 on the registration of the division of CIECH Sarzyna, the Management Board of CIECH S.A. (the “Company”, “Issuer”) herewith communicates to the public the below information, the publication of which was delayed on 1 April 2020 according to article 17.4 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on Market Abuse, and repealing Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (the “MAR”), on the commencement of negotiations for the sale of CIECH Żywice.

Content of the delayed inside information:

“The Management Board of CIECH S.A. the “Company”, “Issuer”) herewith informs that on 1 April 2020, the Company commenced negotiations with LERG S.A. with its registered office in Pustków-Osiedle (the “Prospective Investor”) on the currently contemplated sale of the Resins business unit (BU Resins), i.e. the company CIECH Żywice sp. z o.o. (“CIECH Żywice”).

The sale of Ciech Żywice, if any, is in line with the CIECH Group's Strategy for 2019-2021.

At the same time, the Management Board of the Company would like to advise that the negotiations described above are at their preliminary stage, thus the probability of defining the final terms of the transaction and the acquisition of CIECH Żywice by the Prospective Investor is not yet certain. What is more, the current uncertain general economic situation on markets, arising from the coronavirus epidemic, may have a significant impact on the course and success of these negotiations.

The Company will provide information on the next stages of the negotiation process between the Prospective Investor and the Company in separate current reports.”

Reasons justifying the delay in disclosing inside information:

The commencement of negotiations with the Prospective Investor is targeted at achieving the Company's strategic goals in the sale of the BU Resins, which is in line with the CIECH Group’s Strategy adopted for 2019-2021. For these reasons, the Company considered the information on the ongoing discussions significant from the investors' point of view and qualifying as inside information. 

At the same time, in the opinion of the Issuer, the delayed publication of information on the commencement of negotiations was in the legitimate interest of the Company since its disclosure may have violated such legitimate interests of the Company. Disclosure of information on conducted negotiations at an early stage may have caused confusion and misunderstanding among investors and other stakeholders of the Company and CIECH Żywice, which in turn could have an adverse impact on the course of negotiations and the probability of completing the transaction, including in particular, the Company's negotiating position.

Given the inability to predict the outcome of the negotiations and their impact on the transaction, in the opinion of the Management Board of the Issuer, the publication of such inside information may have given rise to its incorrect assessment.   

Legal basis: Art. 17.1 and 17.4 of the MAR. 

Signatures of the Company’s representatives:: 

Dawid Jakubowicz – President of the Management Board

Mirosław Skowron  - Member of the Management Board