Negotiations with Daesang Corporation — publication of delayed inside information / signing the lett

The Board of Directors of Pepees S.A. (hereinafter “Pepees” or the “Company”) hereby publishes information the public disclose of which has been delayed pursuant to Article 17(4) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (“MAR”), i.e. informs that the Company has been negotiating potential cooperation with a Korean corporation, Daesang Corporation (“Deasang”), including the cooperation as regards the production of potato starch modifiers. On 5 November 2019, the Company sent to Deasang a draft letter of intent regarding the conducting of bona fide talks concerning the cooperation in the area of the production of potato starch modifiers and other starch derivatives, including the conducting of necessary research and the making of appropriate investments.
Deasang is the largest Korean food producer. Founded in 1956, from the onset of its over 60-years’ history, it has conducted innovative biotechnology projects, thanks to which it has built a diversified portfolio of products dedicated to various food producers and end consumers. Daesang operates in the following segments: General Food, Starch and Sweetener, Healthy Food, Coffee and Bio. It is a leading manufacturer of starch modifiers, including corn starch. In addition to Korea, Daesang operates its factories in Indonesia and Vietnam and sales representatives in Europe, the United States, China and on other Asian markets. Daesang is a public company listed on the Seoul Stock Exchange.
The aim of the cooperation with Daesang is to achieve strategic goals of the Company, expand target markets and the product offer, including modifiers, which is a part of the strategy of the Pepees Group for 2019-2024. For these reasons, the Company considered the information on the ongoing negotiations as material from investors’ point of view and qualifying as inside information.
At the same time, in the opinion of Pepees, it was in the Company’s legitimate interest to delay the publication of the information about the commencement of the negotiations, as its disclosure could have violated its legitimate interests. Both the Company and Daesang are listed companies. Disclosing any information on early-stage negotiations before the intentions of the parties were officially confirmed and the purpose of the negotiations was clarified by signing an appropriate letter of intent could have caused confusion and misunderstanding among investors and other stakeholders of the Company, which could have adversely affected the course of the negotiations.
On 25 February 2020, the Company and Daesang signed a Letter of Intent in which they undertook to continue negotiations in good faith regarding the cooperation in the area of the production of potato starch modifiers and other starch derivatives, and to develop and agree on the appropriate documentation. The scope of the negotiations will also cover the scope of necessary research and investments. Upon signing the Letter of Intent, the parties will proceed to implement it.

SIGNATURES OF THE COMPANY’S REPRESENTATIVES
Date Name and surname Position/Function Signature
2020-02-25 Wojciech Faszczewski President of the Board of Directors
2020-02-25 Tomasz Rogala Member of the Board of Directors