Execution of a conditional share purchase agreement

Polish Energy Partners S.A. (“PEP”) hereby informs that on July 30, 2009, PEP and Elektrownia Połaniec Spółka Akcyjna – Grupa GDF Suez Energia Polska (“GDF Suez”) executed: (i) the conditional share purchase agreement (“Share Purchase Agreement”) for the sale of 90 shares (30% of the company’s share capital) of Beta Sp. z o.o. (“Beta”) and (ii) a support agreement (“Support Agreement”).

The Share Purchase Agreement will become effective upon the fulfilment of the following conditions (conditions precedent): registration by the District Court of amendments to the Articles of Association of Beta in the manner specified in the Share Purchase Agreement, the granting of consent for the sale of Beta shares by the Supervisory Board of PEP (the meeting of the Supervisory Board of PEP is to be held on August 10, 2009), and the granting of consent for the acquisition of Beta shares by the General Shareholders Meeting of GDF Suez.  The Support Agreement will become effective on the day on which GDF Suez purchases 90 Beta shares from PEP.

On account of the Share Purchase Agreement and the Support Agreement, GDF Suez will pay to PEP the total of PLN 4,700 k net, to be paid in the following manner:

– PLN 1,167,000 – payable immediately following the fulfilment of the above-mentioned conditions precedent;
– PLN 200,000 – payable on September 30, 2009;
– PLN 125,000 – payable on April 30, 2010;
– PLN 3,133,000 – payable on the day on which Jarogniew/Mołtowo wind farm commences its operations;
– PLN 75,000 – payable on April 30, 2011.

The transaction will have the following impact on the consolidated financial statement of PEP:

Revenues on sales – PLN 0.4 million
EBITDA – PLN 0.4 million
Adjusted EBITDA – PLN 4.3 million
Financial revenues – PLN 4.3 million
Net income – PLN 3.8 million

The transaction will be recognized in Q3 2009.

Additionally, in connection with the transaction completion, PEP will get the immediate repayment of shareholder’s loans granted to Beta in the total amount of approx. PLN 2.1 million (excluding interest). The funds will be allocated for the investments in renewable energy projects.

The transfer of the minority share in Beta forms a part of PEP strategy that combines the maintenance of the sole shareholder’s status in a part of developed wind farms and the securing maximum share premium on the sale of shares in selected wind farms. The Management Board of PEP makes market analyses on a daily basis in order to:
a. Warrant that the aforementioned relation is the most favourable for the Company shareholders in both the short term and long term perspective; and
b. Warrant the most effective manner of engaging financial, human and organizational resources of PEP in implemented projects.

In connection with the foregoing, the decision to transfer Beta shares was taken to warrant quicker income for the Company shareholders and allow the Company to increase the engagement of resources in the implementation of projects that are wholly-owned by PEP.

The total value of the Share Purchase Agreement and Support Agreement does not exceed 10% of PEP’s equity.