46/2019 – Disclosure of delayed confidential information regarding the commencement of negotiations with ARP

Based on Article. 17 clause 1 and 4 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Regulation on market abuse) and repealing Directive 2003/6/WE of the European Parliament and of the Council and Commission Directive 2003/124/WE, 2003/125/WE and 2004/72/WE (‘MAR’), the Management Board of Trakcja PRKiI SA (the ‘Company’ or ‘Issuer’) (the ‘Management Board’) hereby presents the delayed on March 14, 2019 confidential information regarding the commencement of negotiations by the Company with Agencja Rozwoju Przemysłu SA (‘ARP’) regarding the potential for ARP to participate in the increase in the Company’s share capital under consideration by the Company (‘Confidential Information’). The disclosure of delayed Confidential Information results from ARP’s confirmation on 27 September 2019 of the possibility of capital involvement in the Company, by the Company will inform immediately in the next current report.

Content of delayed Confidential Information:

‘With reference to the current report of Trakcja PRKiI SA (‘Company’) No. 4/2019 – the Management Board of the Company informs that on March 14, 2019, the Company began negotiations with representatives of Agencja Rozwoju Przemysłu SA (‘ARP‘) regarding the potential participation by the ARP in the increase in the Company’s share capital being considered by the Company. At this stage, no binding decisions regarding the take-up of the Company’s shares by the ARP or increase in the Company’s share capital have been made.

The intention of the Company, which it informed about in report No. 4/2019, is to acquire a new investor interested in participating in the increase of the Company’s share capital, which will allow for obtaining new financing for the Company and will enable its further development in the future.’

Reasons justifying the delay in public disclosure of Confidential Information:

In the opinion of the Management Board, the delay in providing this Confidential Information at the time of making the decision on delay met the conditions set out in MAR and in the guidelines of the European Securities and Markets Authority (ESMA) regarding the delay in disclosing confidential information of 20 October 2016 (‘ESMA Guidelines’).

In the opinion of the Issuer, the immediate disclosure of information regarding the commencement of negotiations with the ARP could violate the legitimate interests of the Issuer and threaten ongoing negotiations and adversely affect their outcome, and consequently lead to a violation of the Company’s interests.

The above may, in particular, have resulted in preventing the negotiations being continued and even making it impossible to increase the Company’s share capital on the expected terms in the future. In the opinion of the Management Board, the above conditions meet the criteria for the possibility of violating the legitimate interest of the issuer specified in the ESMA Guidelines.

In the opinion of the Management Board, there were no indications that the delay in disclosing Confidential Information could mislead the public, in particular due to the fact that the commencement of negotiations by the Company is consistent with the Company’s investment directions adopted by the Company, as well as due to the lack of earlier public announcements of the Company regarding the possibility of conducting negotiations with the ARP. In view of the above, in the opinion of the Management Board, there was no reason to believe that the delay in disclosing Confidential Information to the public contrasts with the market expectations based on the communication conducted so far by the Company.

In addition, the Issuer has introduced into internal use the ‘Confidential Information Circulation Regulations at Trakcja PRKiI S.A.’, which specifies the rules for the circulation and handling of confidential information in accordance with:

1. MAR provisions;
2. Commission Implementing Regulation (EU) 2016/347 of 10 March 2016 laying down implementing technical standards in respect of a specific format of lists of persons having access to confidential information and its updating in accordance with Regulation (EU) No. 596/of the European Parliament and of the Council 2014;
3. The Act of 29 July 2005 on public offerings and conditions governing the introduction of financial instruments to organized trading, and on public companies (Uniform text, Journal of Laws 2013, item 1382).

In the Company’s opinion, the above-mentioned document ensures confidentiality of delayed information. Confidentiality of information is also constantly monitored by the Company.

According to the content of art. 17 clause 4 MAR, immediately after publishing this report, the Company will inform the Polish Financial Supervision Authority about the delay in disclosing Confidential Information together with an indication of whether the conditions for such delay have been met.

Legal basis: Article 17 para. 1 and item 4 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Regulation on market abuse) and repealing Directive 2003/6/WE of the European Parliament and of the Council and Commission Directive 2003/124/WE, 2003/125 / EC and 2004/72/WE – confidential information.ektywy Komisji 2003/124/WE, 2003/125/WE i 2004/72/WE – informacja poufna.