Capital investments completed

PZU and PFR have entered into a contract with UniCredit S.p.A. for the purchase of 32.8% of shares of Bank Pekao S.A. for the total amount of PLN 10.6 billion. The purchase price per share amounts to PLN 123. This is one of the largest transactions in the banking sector in Europe in recent years. The acquisition of Pekao shares is in line with the PZU strategy ending in 2020 that outlines the establishment of a banking group with assets of at least PLN 140 billion and reaching PLN 50 billion of assets under management for third parties. PZU and PFR will cooperate to ensure effective implementation of the development strategy of Pekao, keeping the bank's current low risk profile, reliable profitability level and stable long-term policy regarding payment of dividend from profit.

"By means of this transaction, PZU has become the largest financial group in Central and Eastern Europe and a leader in insurance, banking sector and asset management. I am sure that this strong financial institution in Warsaw will significantly affect the financial stability and perspectives for responsible development of the Polish economy. This institution will have unique opportunities to build value for our shareholders, clients and employees thanks to its strength and scale," says Michał Krupiński, President of PZU.

"One of the challenges the Polish economy faces is the lack of a reliable base of domestic investors, which is also reflected in the banking sector. Therefore, PFR is interested in acting as a long-term financial partner for strategic investors and in providing support for various initiatives the purpose of which is to promote and improve the domestic financial market. Pekao is a distinct institution whose market position enables further use of the significant growth potential of the Polish economy and the banking sector. When cooperating with PZU, we will become a stable investor for Pekao, to the advantage of employees, clients and value for the shareholders of this bank," says Paweł Borys, President of PFR.

The transaction structure provides for indirect purchase of 20% of Pekao shares by PZU to close the transaction, for a total amount of PLN 6.5 billion. At the same time, PFR will purchase 12.8% of Pekao shares directly from UniCredit for a total amount of PLN 4.1 billion. As per the assumptions, Bank Pekao may acquire from UniCredit the shares in Pioneer TFI, Pioneer PTE and Xelion, becoming therefore the sole owner of key subsidiaries.

The agreed purchase price of PLN 123 per share means a total remuneration of PLN 10.6 billion for the stake being purchased by PZU and PFR covering 32.8% of Pekao shares, and represents a ratio of price to carrying amount of approximately 1.3x based on the carrying amount of Pekao at the date of the planned closing of the transaction and a price-to-profit ratio of 13.1x on the basis of profit forecast for 2018. The purchase price is lower by 2.4% compared to the sale price of the stake of 10% shares in Pekao by UniCredit in July 2016 and lower by 3.3% than the average price of Pekao on the WSE over the last six months.

PZU and PFR have concluded a long-term shareholder agreement that stipulates the principles of cooperation between PZU and PFR with regard to investments in Pekao. PZU forecasts that after closing the transaction, it will be able to include Pekao in its consolidated financial statements.

Through this transaction, the PZU Group may achieve one of the goals specified in its strategy for 2020, which is to establish a Polish banking group with total target assets of PLN 140 billion. According to PZU the Polish banking sector is considered to be very attractive with regard to growth potential, the driver of which is the low level of debt in the form of loans and stable economic growth as well as stable profitability at a moderate level of risk. It is expected that Pekao and PZU will benefit from cooperation in terms of distribution of insurance products and asset management, which will lead to an increase in revenues  for PZU and Pekao in this area.

The goal of PFR, as a long-term strategic financial partner, is to support PZU in the strategy of establishing a strong Polish banking group of high growth potential.
PFR assumes that the transaction will help acquire an attractive level of return on investment. It will be funded from own funds and funds obtained in financial markets. Pekao is a leading Polish bank operating in the corporate banking, SME and retail banking sectors and asset management. The company has very good financial results on a regular basis. In the financial year of 2015, Pekao had a 13.0% share in the mortgage loan market and an 18.0% share in the corporate loan market, the company's CAGR was 11.0% with regard to basic retail loans and 7.1% in the field of basic loans for enterprises in the period from the financial year of 2014 to Q3 of 2016. Pekao demonstrates strict cost control, good asset quality with a gross NPL of 6.4% (in Q3 2016) and risk costs of 43 basis points [1], which has led to a high RoTE above 10% despite operating with a CET1 at 18.1%, the highest in the entire sector. Pekao and UniCredit will sign a strategic cooperation agreement focusing in particular on Polish companies operating abroad and international customers investing in Poland. They expect the transaction to bring a number of financial benefits to PZU, including an immediate significant increase in profit, leading to a 10-11% increase in profit per share between 2017-2018. Additional income will positively affect PZU's medium-term ROE and will contribute to ROE planned by PZU to be at 18%. It is expected that the high capital proportionality ratio and the high ROE of Pekao will contribute to keep the current Pekao dividend payment policy in the amount of almost 100% of the achieved profit. The PZU Solvency II capital coverage ratio will be in line with "PZU Capital and Dividend Policy for 2016-2020". PZU's leverage ratio is expected to be below 35%, as per the strategic goal.
PFR expects to achieve a return on investment in Pekao above 10% on an annual basis and assumes an investment horizon to be at least 3 to 5 years.

Consultants:
PZU financial advisor for the transaction - Deutsche Bank
Advisor for PFR valuation - JP Morgan
PZU Law Firm - Clifford Chance
PFR Legal Advisor - GIDE Loyrette Nouel
Due diligence advisor - Ernst & Young

[1] Annually, in accordance with data provided by Pekao in the presentation of results for Q3 2016.

On 28 April 2017, an investment agreement was concluded between H.CEGIELSKI-POZNAŃ S.A., a shareholder of the company represented by the Ministry of Development, and Polski Fundusz Rozwoju.

"Through the participation of Polski Fundusz Rozwoju in the facilities of Cegielski, we are opening a new chapter in the 170-year history of this Poznań company. I strongly believe that in the medium term, the company will add the next chapters to its history independently, generating added value for the Polish economy in the area of the widely understood industry of the future," said Mateusz Morawiecki, Deputy Prime Minister, Minister of Development and Finance. "When I was in Poznań six months ago, I said that with well developed and implemented repair and investment projects, there is a hope for a better future for companies such as Cegielski. During the last 27 years, the historic jewels of the Polish economy have been sold or liquidated. We want to give a chance to those facilities which have specialized personnel, determination and potential, not only for survival, but also for a second life and development," the Deputy Prime Minister added. 

Polski Fundusz Rozwoju will invest PLN 40 million in H.CEGIELSKI-POZNAŃ S.A. in Poznań, in the form of bonds convertible into shares. This investment is included in the PFR strategy – investment in prospective companies in the industrial sector, focusing on development based on innovative projects.

"Our investment aims to help HCP develop new products and acquire strategic partners. The company's new strategy ensures attractive development opportunities, such as the production of drives for electric vehicles. The implementation of the strategy for the years 2017-2021 adopted by the new management board of Cegielski and the supplementary projects proposed by PFR, will help within the next few years to significantly increase the company's revenues and restore its sustainable profitability,” says Paweł Borys, President of Polski Fundusz Rozwoju.

"Through PFR's investment the Management Board of H.CEGIELSKI-POZNAŃ S.A. will be able to introduce investment plan assumptions and adapt the machinery to manufacture new products, for example modern electric drives or products for the energy sector.

"Cegielski's potential does not only mean its unique machinery and many years of experience. It primarily concerns the latest technologies and products as well as innovative solutions for many industries. The vision of rebuilding Cegielski's importance is no longer a plan, but a reality. As in the past, Cegielski has started to set the pace for the global competition. We are implementing the world's best electric drive with a five-phase induction motor into series production. It will be used in the transport industry. As part of cooperation with URSUS S.A., we will design and introduce into series production a specialized vehicle, powered by our engine. We are developing a series of products and services for the renewable energy industry, such as wind turbine converters and gear service. We have experience in all of these industries. Innovations will guarantee competitiveness and development of the company in the areas that are strategic for the Polish economy," says Wojciech Więcławek, President of the Management Board of H.CEGIELSKI-POZNAŃ S.A.

The purpose of the plan developed by the Management Board of H. Cegielski is to restore the Company's stable profitability and leead it onto a development path for the coming years.

The consortium of entities investing in Ferrum are made up of Polski Fund Rozwoju S.A. via  Fundusz Inwestycji Polskich Przedsiębiorstw FIZAN, the FIZAN Mezzanine fund managed by Credit Value Investments Sp. z o.o. and an investment fund managed by Mr. Marek Warzecha. Investors have taken actions aiming to focus all Ferrum's long-term financial debt of approximately PLN 95 million to refinance and convert it to new issue shares. At the same time, in order to guarantee the operational stability of the company, investors additionally granted the company a PLN 30 million loan for working capital.

"Ferrum is a company with great potential, which provides pipes of high quality for strategic investments in Polish infrastructure, i.e. in particular transmission and distribution of gas, and which delivers world-class welded structures for sectors such as energy and metallurgy. The investment meets the assumptions of the strategy of the Polski Fundusz Rozwoju, which assumes investments in the development of Polish enterprises and improvement of their competitiveness in the domestic and foreign market. The investment meets the Responsible Development Strategy," says Marcin Piasecki, Vice President of the Management Board for Investment of PFR.

"We are thrilled that we may participate in a transaction covering long-term debt refinancing, implemented using the opportunities of the new restructuring law, as well as funding of the company's further development. We believe that Ferrum faces a completely new market perspective, which may be fully used by the company by means of the financing obtained," says Marcin Leja, Managing Director of CVI.

Ferrum is the only domestic manufacturer offering spirally welded, longitudinally welded and welded pipes up to 406mm in diameter. Furthermore, the company owns a line for external and internal insulation as well as cement insulation. As the only domestic entity, Ferrum is capable of manufacturing pipes for the needs of gas and petroleum gas transmission companies. There are 460 employees employed at the Ferrum group in total. In 2016, the Ferrum Group generated PLN 309 million of sales revenue and PLN 19.5 million of EBITDA.

 "Ferrum is a company of great potential. Due to the conversion of debt to equity, the company will be able to take a financial 'breath'. Both with regard to the technological and operational aspect, the company is ready to significantly increase turnover and generate profits at a level higher than during its best years. Moreover, by means of the launch of the new line in the first quarter of next year, the company will be able to offer much better prices than the competition from Germany or Greece, which will be of particular importance, e.g. with regard to the investment program being implemented by Gaz-System until 2025. I am thrilled that PFR and CVI recognize this potential as well, therefore we decided together on this investment and we are treating it as a long-term one. I have been specializing in enterprise restructuring for years, Ponar-Wadowice S.A. may be a good example. I am sure that Ferrum with a healthy financial structure will become one of the largest enterprises of this type in this part of Europe," says Marek Warzecha, representing MW Asset Management Sp. z o.o.

The Management Board of Ferrum plans to present a proposal to investors that have purchased the financial receivables of the company to conclude a deal for the approval of the arrangement . In total, approximately PLN 95 million of debt will be subject  to conversion into equity. Receivables will be converted at a price of PLN 4.5 per share, i.e. finally to approximately 21.1 million  new shares, constituting approximately 46.3 percent of the increased share capital of the company. The conversion depends on the court approval of the proposed arrangement with investors.

The agreement also stipulates that the investors may purchase 1.39 million  of Ferrum S.A.'s own shares at the price of 4.1 PLN per item. Funds raised from the sale of own shares will be used for repayment of commercial debts.

"Through a debt-for-equity swap and working capital funding, we will help us finally settle the issue related to long-term financial debt and optimize sources of working capital. The recovery of financial credibility by Ferrum S.A. is particularly important, it will significantly reduce the cost of input for production. Due to the financial and substantive support that investors have provided to the company, we will be able to directly perform large long-term contracts. This will help us focus on operational and commercial activities at the same time," says Krzysztof Kasprzycki, President of Ferrum S.A.

"According to our plan, in the long term perspective, Ferrum will obtain bank financing on market conditions. Due to the high demand for the pipes offered by the company, we need, in particular, access to bank guarantees and working capital financing. At the same time, PFR's purchase of a spiral-welded pipe production line unique in Central and Eastern Europe will help us almost double our production capacity and expand our product range with pipes with a wall thickness of over 16.2mm. This means that we will be ready to meet the demand for virtually the entire range of spirally welded pipes. We are particularly interested in participation in tenders for the supply of pipes organized by gas pipeline operators in Poland and neighboring countries," adds Krzysztof Kasprzycki.

At the same time, in May this year, a fund managed by Polski Fundusz Rozwoju purchased and established the means of  use and acquisition by Ferrum of the spiral-welded pipe production line. Line assembly and commissioning was assigned to Zakład Konstrukcji Spawanych Ferrum S.A., a company entirely controlled by Ferrum. According to the adopted schedule, the new line should be commissioned by the end of March next year.

"Ferrum takes the new production line to a completely different level of competitiveness. We are convinced that due to it, and ther factors, current and future shareholders will be the beneficiaries of the company's development," says Marcin Piasecki, Vice President of the Management Board for Investment of PFR.

"Through the purchase of the line we will be able to diversify products, and increase our share in the planned investments in the gas and heating sector. Ferrum's production capacity will almost double to approximately 90,000 tonnes, which will make us one of the leading pipe manufacturers in Europe," emphasizes President Kasprzycki.

Ferrum S.A. is a national leader in the production of utilities transmission pipes. It specializes in the production of pre-insulated welded steel pipes and hollow sections. The company provides products for the gas (particularly for the construction of transmission and distribution pipelines), heating, water and sewage (for transmission of sewage, potable and saline water) and industrial markets.

Polski Fundusz Rozwoju is a financial group offering instruments for the development of enterprises, local governments and private individuals, investing in sustainable social and economic development. It operates based on a professional team and the best international standards. The mission of PFR, as a Polish development financial institution, is to implement programs supporting the increase of the long-term investment and economic potential of Poland as well as equal opportunities and protection of the natural environment. More information: www.pfr.pl.

Credit Value Investments sp.z o.o. is an independent fund management company, implementing private debt and private equity investments, managing assets with a total value of over PLN 5 billion. CVI is the largest provider of alternative debt financing for small and medium-sized companies in the CEE region. In its history, CVI has provided funds to over 600 entities, including nearly 400 cases using the private debt formula.

Marek Warzecha – Investor. President of the Management Board of Ponar Wadowice S.A., Ponar Lubań Sp. z o.o., Vice-Chairman of the Supervisory Board of Cormay S.A. Formerly, President of the Management Board of Ponar Silesia S.A., Member of the Management Board of  Fazos S.A., Chairman of the Supervisory Board of Voxel S.A., Famak S.A.

Polski Fundusz Rozwoju will take up 2,400,000 new issue shares in total in the increased share capital of WB Electronics, which is the parent company of the WB capital group. Under the investment amounting to PLN 128 million, the Fund managed by PFR will take up new issue shares that will secure a 24% share in the capital of WB Electronics. The creators and founders of WB Electronics, Piotr Wojciechowski and Adam Bartosiewicz, will remain the majority shareholders. The funds from the new issue will serve investments in modern products and technologies as well as development in international markets.

"The defense industry plays a special role in the so-called Morawiecki Plan, while the PFR investment will help improve the Polish defense industry by means of development of innovative technologies to the benefit of the entire economy. We also want to support the WB Group in foreign expansion and we  look forward to good cooperation of the company with Polska Grupa Zbrojeniowa with regard to the implementation of key modernization programs of the Polish army and in order to integrate the domestic product offer and awarding contracts in foreign markets," says Paweł Borys, President of the Management Board of the Polski Fundusz Rozwoju.

Under the Strategy for Responsible Development, the Żwirko i Wigura program is also being implemented. The purpose of the program is to develop the unmanned aerial vehicle (so-called drones) sector. Flytronic of the WB Group is the Polish leader in the production of unmanned aerial systems.

WB Group is the largest private company operating in the armament sector in Poland and serves as an integrator of complex command and communication systems for special purpose military and civil markets.

"We are thrilled to have a stable and reliable investor, which is PFR. Thanks to the funds acquired, we will expand our product portfolio by developing our innovative technologies, which will help us offer unique solutions on a global scale and strengthen our position in the international armament market. WB Group is already present in several dozen markets, including the USA, the Middle East, South America, North Africa, and South-East Asia. Since 2016. it also has a subsidiary in Malaysia," says Piotr Wojciechowski, President of WB Group.

FONET (a digital communication and command system facilitating battlefield management ) and TOPAZ (fire control and battlefield management systems for artillery) are the most important products of the WB Group. The company offers modular solutions with regard to the above described systems, focusing on the area of communication (audio, digital, wired and wireless communication), information processing (vehicle and portable computers, routers) and software dedicated to the above mentioned devices. WB Group is also the author of an unmanned aerial reconnaissance system of mini FlyEye class, which was first in this category implemented into service in the Polish Army. Currently, the WB Group employs over 800 persons, including more than half of engineers of research and development departments.

In 2016, the WB Group generated PLN 354.8 million in sales revenue and PLN 53.1 million in EBITDA. In November 2017, the company acquired PLN 80 million from a private placement of bonds for institutional investors, as part of an issue refinancing the previous issue of debt securities.

"We believe that the company has great potential and that cooperation with the PFR Group is a completely new stage in its development. Referring to the previous achievements, WB Group has fully proved that it is able to effectively use the potential of Polish engineering know-how and introduce solutions that successfully compete with products of global armament concerns. I am convinced that this investment will bring benefits both for WB Electronics and the entire Polish armament industry," says Marcin Piasecki, Vice President of the Management Board for Investment of PFR.

"We want to introduce completely new standards and lead the wave of innovation, therefore WB Group companies are participating in research and development projects, where an example of such a project is the development of the mobile Guarana radio station, in which Radmor act as the leader of the consortium, and WB Electronics is a member of the consortium implementing the "Tytan" program of solder's individual equipment and armament," says Adam Bartosiewicz, Vice President of WB Group.

The Group of Polski Fundusz Rozwoju is a group of financial institutions offering instruments for the development of enterprises, local governments and private individuals, investing in sustainable social and economic development. It operates on the basis of a professional team and the best international standards. The mission of PFR is to implement programs supporting the increase of Poland's long-term investment and economic potential and to equalize opportunities and protect the natural environment.

WB Group is currently one of the largest Polish companies in the defence sector and it offers technologically advanced solutions for the military and civil markets. The companies of the WB Group specialize in designing and manufacturing innovative command and fire control systems, unmanned systems, industrial automation and radio communications and data transmission. The WB Group is successful on the global market thanks to its idea to offer only the best products, original solutions which set new standards in the world. WB Group consists of 5 entities; in addition to WB Electronics, the capital group includes the subsidiaries Radmor S.A., Flytronic Sp. z o.o., MindMade Sp. z o.o. and Zakład Automatyki i Urządzeń Pomiarowych AREX Sp. z o.o.

The biotechnology sector is one of the key sectors for the development of the Polish economy, specified in the Strategy for Responsible Development.

 "The number of biotech ventures is constantly growing worldwide. It is obvious that biotechnology plays an increasingly important role in the economy. It is a difficult area to invest in, as it is associated with greater risk. Therefore, such initiatives as today's  are even more valuable," says Jadwiga Emilewicz, Minister of Entrepreneurship and Technology.

The PFR Group, through its flagship Biotechnology Development Program, and the Ministry of Entrepreneurship and Technology have been supporting the building of the ecosystem of this sector for many months. Works are being carried out to create a comprehensive program for the development of biotechnology. The program is to cover a number of activities, such as new regulations facilitating clinical trials, tax incentives, and internships for students in companies. Now, in response to the needs of the dynamically growing industry, the PFR Group, through PFR Life Science sp. z o.o., has also decided to involve its capital in selected biotechnology companies, in particular those seeking funding for clinical trials. The investment in Selvita is the first investment of PFR Life Science, whose activities focus on investments in the biotechnology sector.

 "The Polish capital market is learning about the biotechnology industry. That is why we were thrilled to be informed of participation of PFR Life Science in the public offering of Selvita shares, which, as a dedicated and long-term investor, is a valuable partner to us. PFR Life Science's participation in the public offering of the shares was one of the key factors that helped us successfully place it. The fund's declaration during the demand book building process was a pillar that ensured process stability despite the turbulence global indices experienced during the ongoing subscriptions for shares," said Paweł Przewięźlikowski, co-founder, the largest shareholder and President of Selvita S.A.

The purpose of the issue of shares was to raise funds necessary to implement Selvita's strategy for 2017-2021, which assumes, in particular, increased investment in the development of the innovation segment and oncology projects developed within it. The key business objective is to develop the SEL120 project to stage II of clinical trials and to conclude a partnering contract. The total financial contributions associated with the investment plans for 2017-2021 will reach PLN 390 million.  The planned expenditure on R&D related areas will amount to approximately PLN 290 million by 2021, which means that the funds obtained from investors will cover roughly half of this amount (the remaining amount will be financed mainly from already obtained grants and own funds). The remaining investment expenditure related to the construction of the Innovative Medicines Development Centre (a comprehensive set of laboratories for the development of original medicines) and the development of the company's service and bioinformation segments, will be funded exclusively from grants and own funds (no financing from the issue).

 "Polski Fundusz Rozwoju has listened to the industry, which has repeatedly stressed that Poland lacks dedicated sources of financing which would allow for leading biotechnology companies to implement ambitious development plans that could result in the creation of Polish innovative medicines and technologies in the future," says Paweł Borys, President of PFR.

"Apart from direct investments in larger companies in the sector, we will also support the sector's development through the activities of PFR Ventures, which will contribute to increased availability of capital for innovative companies at earlier stages of development," added Paweł Borys.

Through PFR Life Science, the Group of Polski Fundusz Rozwoju plans to invest a total of up to PLN 300 million in selected biotech companies, assuming an average investment volume of PLN 30 to 50 million. Investment activities in this sector are supported by industry experts who help assess the innovativeness and attractiveness of development plans of selected companies.

The Group of Polski Fundusz Rozwoju and Selvita plan to cooperate in the area of promoting the industry and supporting innovative biotechnology companies at earlier stages of their development by means of, i.a., creating an expert group offering access to substantive knowledge and experience in raising capital to younger companies.

PFR Life Science sp. z o.o. will be the direct investor in Selvita S.A. Fundusz Inwestycji Polskich Przedsiębiorstw Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych is its sole shareholder, co-financed by Polski Fundusz Rozwoju S.A., managed by PFR Towarzystwo Funduszy Inwestycyjnych S.A.

Selvita S.A. is a Polish biotechnology company, one of the largest in Europe, operating in the field of discovery and development of drugs used in oncology. It also provides laboratory R&D services for pharmaceutical, biotechn and chemical companies from around the world. Through its subsidiary, Ardigen, it develops advanced bioinformation solutions. Selvita was established in 2007. It currently employs more than 430 persons, approximately 1/3 of whom have a PhD. The company's seat and laboratories are located in Kraków; the second laboratory branch is in Poznań. Selvita has offices in the largest biotechnology centers in the world, in the Boston and San Francisco areas in the United States and in Cambridge, United Kingdom. In 2011, Selvita made its debut on the NewConnect market. Since 2014, it has been listed on the WSE main market. In March 2017, it was included in the sWIG80 index. More information: www.selvita.com

The Group of Polski Fundusz Rozwoju is a financial group consisting of Polski Fundusz Rozwoju S.A., PFR Towarzystwo Funduszy Inwestycyjnych S.A., and PFR Ventures sp. z o.o., among others, offering instruments for the development of enterprises, local governments and individuals, investing in sustainable social and economic development. It operates on the basis of a professional team and the best international standards. The mission of PFR, as a Polish development financial institution, is to implement programs that support the improvement of Poland's long-term investment and economic potential and to equalize opportunities and protect the natural environment. More information: www.pfr.pl.

PFR Life Science sp. z o.o. is a portfolio company of the Fund,  whose part of investment portfolio is managed by PFR aiming at investments in biotech companies, in particular those operating in the area of creating innovative drugs.

"The railway industry plays a particular role in the so-called Morawiecki Plan. The PFR investment in PESA Bydgoszcz is an important step in the development of this sector. We are convinced that this investment will bring social and economic benefits to Poland," says Paweł Borys, President of the Management Board of Polski Fundusz Rozwoju. "Our strategic goal is to further consolidate the railway sector, both in Poland and abroad, in order to build a significant group in the global industrial market, and then acquire a private partner," he added.

In 2017, PFR was invited by PESA and its shareholders to a transaction process involving the acquisition and increase of shares in PESA. The company's shareholders selected PFR's offer, and then in March 2018 a preliminary agreement to purchase its shares was concluded. The transaction was approved by the Office of Competition and Consumer Protection (“OCCP”).

"We have been cooperating with PESA for 2 years now, creating a joint company offering to lease stock, therefore we are convinced that the company's industrial and managerial potential gives the prospect of its long-term development in Poland and international markets. Our plan is to improve PESA as a leader in the domestic market and further develop its exports. In the competitive process, we have won over foreign industrial bidders which, like us, have recognised the value and potential of PESA. This also confirms that PFR is perceived as a reliable and desirable investment partner," says Marcin Piasecki, Vice President for Investment of PFR.

The investment in PESA Bydgoszcz is associated with a change in the company's market strategy. PESA plans to optimize production by raising management and quality control standards and produce longer series. It will selectively choose new contracts. The new strategy assumes the intensification of the development in foreign markets, such as Italy, Germany, Czech Republic or Romania, among others. It is also plans to diversify its product offer in the field of rolling stock, trams and maintenance.

"PESA is a company with over 160 years of tradition. The last 20 years have been devoted to the transformation of the company from ZNTK to a modern rail vehicle manufacturer. Due to the efforts and skills of the company's employees, we have managed to secure a strong position in the domestic market and successfully compete in the European market. PESA now needs a new opening with a financially strong investor, able to ensure the company's further development. This is an important day and I am convinced that both we, the existing shareholders, and employees may calmly look forward to the future," says Zygfryd Żurawski, President of Pesa Holding, shareholder representative.

"The last months have been devoted to the restructurization of the company, efforts to attract investors and provide funding. During such a difficult process, the most important thing is to prove that it is worth investing in the company, that employees are able to mobilize themselves and confirm their ability to change, execute contracts, improve quality and achieve better financial results. Despite the difficult financial situation, we were able to perform the contracts. Among others, we managed to obtain approval for DB vehicles, and the first links are already carrying passengers on the German network. I am convinced that PESA is a good investment," says Krzysztof Sędzikowski, President of the Management Board of PESA Bydgoszcz S.A.

[1] Fundusz Inwestycji Polskich Przedsiębiorstw Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych

***

PESA Bydgoszcz SA is the largest Polish manufacturer of almost all types of rail vehicles, including electric and diesel trains, locomotives and trams. They have several common features, such as innovation, modern design, ease of operation and high comfort of travel, modularity and unification of various components facilitating operation, and what is more, safety as a priority in both the design and manufacture of rolling stock. Rolling stock from PESA Bydgoszcz is operated in Poland and other countries such as Italy, Germany, Russia, Czech Republic, Hungary, Romania, Ukraine, Lithuania, Belarus and Kazakhstan. PESA employs over 4000 employees. More information: www.pesa.pl.

The Group of Polski Fundusz Rozwoju is a financial group consisting of Polski Fundusz Rozwoju S.A., PFR Towarzystwo Funduszy Inwestycyjnych S.A., and PFR Ventures sp. z o.o. among others, offering instruments for the development of enterprises, local governments and individuals, investing in sustainable social and economic development. It operates on the basis of a professional team and the best international standards. The mission of PFR, as a Polish development financial institution, is to implement programs that support the improvement of Poland's long-term investment and economic potential and to equalize opportunities and protect the natural environment. More information: www.pfr.pl.