Body of the report:             

In reference to Current Report No. 12/2016 regarding an update of the assumed schedule for the SEJ Group divestment process, the Management Board of JSW S.A. (“Company”, “JSW”) hereby reports that in connection with the activities carried out as part of the JSW restructuring plan, including the process of divestment of selected assets owned by the JSW Group, on 28 April 2016 an agreement was entered into by and between PGNiG Termika S.A. (“PGNiG Termika”) and JSW’s subsidiary Spółka Energetyczna “Jastrzębie” S.A. (“SEJ”) to sell to PGNiG Termika a 100% stake in the share capital of Przedsiębiorstwo Energetyki Cieplnej S.A. (“PEC Shares”) (“Transaction”).

The total price for the PEC Shares is PLN 190,400,000.00, however an amount of PLN 50,000,000.00 will be paid only after PGNiG Termika receives confirmation of termination of the surety agreements under which PEC granted a surety to secure the claims of the bondholders who subscribed for the bonds issued by SEJ under the bond issue program of 17 October 2013. The funds obtained by SEJ from the sale of the PEC Shares will be used to implement SEJ’s investment program “Power Sector 2016”, in particular to finance the completion of construction of its CFB unit.

The Transaction also regulates the long-term contractual terms and conditions of the purchase of heat by PEC from SEJ and of the purchase of steam coal from JSW.

Moreover, on 28 April 2016 Termika PGNiG submitted to the Company a conditional binding offer to acquire a stake in SEJ. The Company will keep the public up to date in its subsequent reports about any further significant steps in the SEJ divestment process.

Legal basis: Article 56 Section 1 Item 1 of the Act on Offerings – confidential information