An increase in the Issuer’s interest in CHP Energia sp. z o.o.

The Board of Directors of Przedsiębiorstwo Przemysłu Spożywczego “PEPEES” S.A. (“the Company”, “the Issuer”) hereby notifies that, on 24 October 2016, the Extraordinary General Meeting of Shareholders of CHP Energia sp. z o.o. (“CHP Energia”) decided to increase the share capital of this company by issuing 6,000 new shares which were subscribed for by the Issuer. The said shares were subscribed for at PLN 850 per share, i.e. for the total amount of PLN 5.1 million.
As a result of the shares subscription, the Issuer’s share in the share capital of/total number of votes in CHP Energia will increase from the present 24.91 % to 67.43 % and, hence, CHP Energia will become the Issuer’s subsidiary. The Issuer would like to note that an increase in share capital by issuing new shares must be registered by a competent registry court. 
The Issuer hereby clarifies that the biogas plant run by CHP Energia uses agricultural raw materials in its production and, as a result, owing to the inclusion of this asset in the Issuer’s Group, the production process for basic products in the Group’s offer will be expanded with another link of the production chain. This is related to a need to dispose of by-products (potato pulp) created in the aforementioned production process. Notwithstanding the foregoing, the increased interest in CHP Energia is also associated with the expected development of this entity’s core business related to the production of electricity and heat.

Signatures of the Company’s representatives

President of the Board of Directors Wojciech Faszczewski 2016-10-24