Response to Questions from PZU “Złota Jesień” Pension Fund
Questions from Shareholder
Issuer’s Responses
Responses to Shareholders’ Questions Submitted on June 28, 2019
The Management Board of Trakcja PRKiI S.A. (the “Company”) provides answers to the following questions submitted by shareholders in accordance with Article 428 § 1 of the Commercial Companies Code during the Extraordinary General Meeting held on June 28, 2019:
- What actions will be involved in the process of offering Series B bearer shares and Series C registered shares, and what actions should an investor take to subscribe for these shares?
Management Board Response:
a) According to the announced draft resolution on increasing the share capital of the Company (the “Issuance Resolution”), the offer of Series B Shares and Series C Shares (collectively, the “New Shares”) will not require approval and publication of a prospectus (the “Offer”). In connection with the planned increase in share capital, the Company has engaged a financial advisor, as reported in Current Report No. 4/2019 dated February 18, 2019. The financial advisor facilitating the Offer is mBank S.A. (the “Offeror”).
b) Based on preliminary arrangements with the Offeror, if the Extraordinary General Meeting adopts the Issuance Resolution, the process of offering New Shares will be as follows:
- Immediately after the adoption of the Issuance Resolution, the demand book will be opened, allowing eligible investors to submit demand declarations through the Offeror, including information about the price and the number of shares the investor is interested in. Investors invited to participate in building the demand book will be those specified in the Issuance Resolution.
- Immediately after the demand book is closed, the issue price of the New Shares, the number of New Shares to be issued, and the preliminary allocation of New Shares to investors will be determined. The Company will then proceed to sign subscription agreements with investors (the “Agreements”). These Agreements will specify the method and timing of payment for New Shares and indicate the brokerage accounts where the New Shares will be recorded. The Management Board emphasizes that one of the conditions for subscribing to New Shares will be the payment of the subscription within the timeframe specified in the Agreement. The Company’s intention is to complete the Offer as quickly as possible, within a few business days after the adoption of the Issuance Resolution.
As the Offer will be conducted through the Offeror, an investment firm subject to detailed legal requirements under the Act of July 29, 2005 on Trading in Financial Instruments and regulations implementing the MIFID II Directive, investors wishing to participate in the Offer will need to enter into a brokerage services agreement with the Offeror. According to arrangements with the Offeror, eligible investors interested in participating in the Offer should contact the Offeror (with appropriate advance notice) to understand the procedure for the Offer, sign the necessary brokerage services agreement (if not already done), and provide required documentation (including completing the KYC procedure with the Offeror, which may take over a week depending on the case).
Additionally, the Management Board informs that the conditions for the Offer may depend on the final wording of the Issuance Resolution and may be subject to change. These conditions will be defined in the placement agreement that the Company intends to enter into with the Offeror after the Issuance Resolution is adopted and before the Offer begins.
- How has the Management Board determined the value of the shares?
Management Board Response:
As of the time of providing this response, the issue price of the New Shares has not yet been determined by the Management Board.
If the Extraordinary General Meeting adopts the Issuance Resolution and the Offer is realized, the issue price of the New Shares will be determined according to the terms specified in the Issuance Resolution, i.e., by the Management Board after obtaining the approval of the Company’s Supervisory Board. In determining the issue price of the New Shares, the Management Board will consider the results of the demand book-building process, during which investors will submit demand declarations through the Offeror, including information about the price and the number of New Shares they are interested in. The Management Board considers this method of determining the issue price of the New Shares to be a market standard and typical for private equity offerings conducted in Poland. Additionally, the Management Board will promptly announce the issue price of the New Shares and the approval of the Supervisory Board in a current report if such a resolution is adopted.
