THE PURCHASE OF SHARES IN GOSPODARSTWO ROLNE PONARY SP. Z O.O.

The Board of Directors of Przedsiębiorstwo Przemysłu Spożywczego “PEPEES” S.A. (“the Company”) hereby informs that, on 27 April 2017, the Company entered into a conditional sales agreement with a natural person, who is a shareholder of the Company, under which the Company will acquire a 34.9167% stake (“Stake”) in Gospodarstwo Rolne Ponary sp. z o.o. (“Ponary”). The Stake will be purchased if the Agricultural Property Agency does not exercise its right of pre-emption concerning the Stake provided for in Article 3a. Clause 1 of the Act of 11 April 2003 on Developing the Agricultural System.
At the same time, the Company entered into agreements to secure its right to acquire all other shares in Ponary. The Company intends to exercise this right and acquire the remaining shares of Ponary gradually when it has free funds available. The acquisition of the remaining shares of Ponary will each time depend on the failure of the Agricultural Property Agency to exercise its right of pre-emption.
The purchase price for all shares is PLN 11,700,000. It has been determined on an arm’s length based on the valuations of three independent appraisers. The Company will finance the acquisition of shares in Ponary entirely with own funds.
Ponary is the owner of agricultural land located in the district of Miłakowo with the total area of ​​425,6547 ha (“Real Property”). The Company is a party to the Real Property lease agreements; their conclusion and amendments are notified in current reports Nos. 10/2014, 22/2014 and 5/2015. The rent paid for the lease of the Real Property has been included in the price of the shares of Ponary.
The acquisition of Ponary will make it possible to continue agricultural investments without the risk of losing them upon the expiry of the lease agreement. The conclusion of the agreement to acquire shares of Ponary will ensure the implementation of the Company’s strategy in terms of the availability of the raw material through the Company’s own cultivation of starch potato.
Signatures of the Company’s representatives

President of the Board of Directors Wojciech Faszczewski 27-04-2017
Member of the Board of Directors Tomasz Rogala 27-04-2017