Conclusion of a placement agreement, consent to conclude transactions with related entities and commencement of a book-building process as part of a private subscription offer for newly issued series D shares and series E shares and the sale of the existing shares of Archicom S.A.

THIS MATERIAL AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO RESTRICTIONS AND ARE NOT INTENDED FOR PUBLICATION, ANNOUNCEMENT, POSTING, DISTRIBUTION OR TRANSMISSION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN ANY PART, INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, SOUTH AFRICA, JAPAN OR OTHER COUNTRIES WHERE PUBLICATION, ANNOUNCEMENT, POSTING, DISTRIBUTION OR TRANSMISSION WOULD BE UNLAWFUL. THIS MATERIAL IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION. PLEASE READ THE LEGAL RESERVATIONS AT THE END OF THIS MATERIAL

Content of the report:

The Management Board of Echo Investment Spółka Akcyjna, with its registered office in Kielce, at al. Solidarności 36, 25-323 Kielce, entered in the Register of Business Entities kept by the District Court in Kielce, X Commercial Division of the National Court Register, under KRS number 0000007025, REGON (Business ID. No.) 290463755, NIP (Taxpayer ID. No.) 6570230912, with the share capital of PLN 20,634,529.10 (paid in full) ("Echo"), hereby informs about the conclusion of a shares placement agreement ("Placement Agreement") by Echo on 25 September 2023 with Archicom S.A. with its registered office in Wrocław ("Company"), a subsidiary in which Echo directly and indirectly holds 90,51% of the total number  of votes at the Company's general meeting, DKR Echo Investment sp. z o.o. with its registered office in Kielce ("Selling Shareholder"), the subsidiary in which Echo holds all the votes at the shareholders' meeting, and Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna - Oddział Biuro Maklerskie w Warszawie ("Manager") - in connection with (i) an offer and sale by the Selling Shareholder of up to 6,107,432 Company ordinary bearer shares ("Sale Shares"), representing 12.59% of the Company's share capital and 11.16 % of the total number of votes at the Company's general meeting of shareholders before the issue by the Company of series D shares and series E shares, and (ii) an offer of up to 3,892,568 Company newly issued series D ordinary bearer shares ("Series D Shares") and/or up to 6,107,432 Company newly issued series E ordinary registered shares ("Series E Shares") (Series D Shares and Series E Shares jointly as the "New Issue Shares"), addressed in both cases to investors acquired by the Manager (except for Series E Shares offered only to Echo or Echo's subsidiaries)through a private subscription, and the admission and introduction of rights to Series D Shares (if applicable) and Series D Shares to trading on the regulated market operated by the Warsaw Stock Exchange S.A. ("WSE") ("Offer").

As part of the Offer, Eligible Investors (as defined below) may acquire no more than 10,000,000 Company shares, namely, no more than 3,892,568 Series D Shares and no more than 6,107,432 Sale Shares, and no more than 6,107,432 Series E Shares will be offered only to Echo or Echo's subsidiaries designated by Echo's management board.

In accordance with the principles detailed in the Placement Agreement, Echo or Echo's subsidiaries designated by Echo's management board intend to acquire Series E Shares in a number equal to the number of Sale Shares sold for an amount corresponding to the value of funds obtained by the Selling Shareholder from the sale of the Sale Shares.

The Offer for the New Issue Shares is conducted under the terms and conditions specified in Resolution No. 3/IX/2023 of the Company's Extraordinary General Meeting of 25 September 2023 on increasing the Company's share capital by issuing series D ordinary bearer shares and series E ordinary registered shares in private subscription, depriving the existing shareholders of the entire pre-emptive right to all Series D Shares and Series E Shares, amending the Company's Statute, applying for admission and introduction of Series D Shares or rights to Series D Shares and Series E Shares to trading on the regulated market operated by the Warsaw Stock Exchange and dematerialization of series D shares or rights to series D shares and series E shares ("Issue Resolution") on the terms specified in the resolution of the Company's Management Board No. 61/25/IX/2023 of 25 September 2023 on establishing the rules for the subscription of Series D Shares and Series E Shares.

The Company will apply for the introduction of rights to Series D Shares (if applicable) and Series D Shares to trading on the regulated market operated by the WSE on the basis of an exemption from the requirement to publish a prospectus, which allows for applying for admission to trading on the WSE regulated market, of up to 20% of the Company shares equal to the Company shares already admitted to trading on the same regulated market within a 12-month period, namely, in accordance with Article 1.5. (a) of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published in connection with a public offer of securities or the admission of them to trading on a regulated market and repealing Directive 2003/71/EC ("Prospectus Regulation").

The book-building process for Series D Shares and the Sale Shares will begin immediately after the publication of the current report of the Company and this current report of Echo relating to the commencement of the book-building process as part of a private subscription offer of newly issued series D shares and series E shares and the sale of the existing shares of the Company and will be carried out as an accelerated book-building process, in accordance with the principles described in these current reports. Pursuant to the Issue Resolution, Series E Shares will be offered to Echo or Echo's subsidiaries designated by Echo's management board by way of a private subscription as defined in Article 431 § 2.1 of the Act of 15 September 2000 – The Commercial Companies Code.

In order to participate in the book-building process, each investor must conclude an appropriate agreement with the Manager (unless it is already a party to such an agreement), regarding the order acceptance and transfer service.

Pursuant to the Issue Resolution and the Placement Agreement, the New Issue Shares are issued with the exclusion of the subscription rights of the Company's existing shareholders. The New Issue Shares and the Sale Shares will be offered through a private subscription addressed exclusively to selected investors (after receiving an invitation from the Manager) who meet the following criteria: (i) they are qualified investors as defined in Article 2. e) of the Prospectus Regulation referred to in Article 1. 4. a) of the Prospectus Regulation, or (ii) they are investors who purchase securities with a total value of at least EUR 100,000 (one hundred thousand euro) per investor, referred to in Article 1.4. d) of the Prospectus Regulation (“Eligible Investors”).

Simultaneously, the Issue Resolution provides for the possibility for the shareholders who meet the priority conditions specified in the Issue Resolution, to allocate Series D Shares in accordance with the principles specified in the Issue Resolution. This mechanism makes it possible to prevent the dilution of the shareholdings of Eligible Investors participating in the book-building process who held a share exceeding 0.2% of the total number of shares in the Company's share capital at the end of 9 September 2023, namely, at the end of the date of the registration of participation in the Extraordinary General Meeting of the Company at which the Issue Resolution was adopted (the ownership status is determined individually for each shareholder, and for shareholders who are investment funds and pension funds, it may be determined jointly for all funds managed by the same investment fund company or pension company).

The issue price of the Series D Shares will be determined by the Company's Management Board (with the consent of the Supervisory Board of the Company) after consultations with the Manager based on the results of the accelerated book-building process.

Pursuant to the Issue Resolution, the issue price of Series E Shares will be equal to the issue price of Series D Shares. Pursuant to the Placement Agreement, the sales price of the Sold Shares will be equal to the issue price of the New Issue Shares.

After the book-building process has been completed, the Company's Management Board will, upon agreement with the Selling Shareholder, Echo and the Manager, select Eligible Investors to whom the Company will submit offers to subscribe for the New Issue Shares and purchase the Sale Shares (the Preliminary Allocation List) and determine the final number of New Issue Shares intended to be offered to each such investor, specifying Series D Shares and Series E Shares, which may only be offered to Echo or its subsidiaries designated by Echo's management board) and the Sale Shares intended for sale to individual Eligible Investors, and Eligible Investors (and, with respect to Series E Shares, Echo or its subsidiaries designated by Echo's management board) will be required to pay the issue price of the New Issue Shares subscribed for by them and the sale price for the Sale Shares allocated to them.

The agreements for the subscription for the New Issue Shares are expected to be concluded by Eligible Investors (or, in relation to Series E Shares, by Echo or its subsidiaries designated by Echo's management board) and paid to the account operated by the Manager on 4 October 2023 or around this date (detailed information on concluding agreements for the subscription for the New Issue Shares will be included in the invitation to conclude such an agreement). The funds from the issue will be released to the Company after the registration of the increase in the Company's share capital by issuing the New Issue Shares by the register court with the relevant jurisdiction. Pursuant to the Placement Agreement, it is expected that the sale of the Sale Shares will be carried out no later than the next business day after the Company publishes, in the form of a current report, information about the established issue price of the New Issue Shares and the sale price of the Sale Shares, as part of market transactions or in another manner as indicated by the Manager.

Pursuant to the Placement Agreement, the Manager has agreed to provide services to the Company, Echo and the Selling Shareholder for the purpose of placing the New Issue Shares and selling the Sale Shares on the terms specified in the Placement Agreement, in particular the Manager has agreed to arrange the book-building process for series D Shares and the Sale Shares and to attract investors who will subscribe for the New Issue Shares (except Series E Shares which will be offered only to Echo or its subsidiaries designated by Echo's management board) or purchase the Sale Shares.

The Placement Agreement does not constitute an obligation of the Manager to purchase or sell any financial instruments nor is it a guarantee of preparing or implementing the introduction of the Company's financial instruments to an organized trading system, carrying out the Offer or placing the New Issue Shares, selling the Sale Shares or any other financial instruments of the Company. The Placement Agreement contains standard conditions precedent for the Manager's obligations contained in agreements of this type concluded in transactions similar to the Offer, including conditions related to the occurrence of a material unfavourable change in the situation of the Company, Echo or the Selling Shareholder, as well as setting out the conditions for its termination typical for agreements of this kind. Pursuant to the Placement Agreement, the Manager is entitled to terminate it in cases specified therein, in particular when any of the warranties or representations of the Company, Echo and the Selling Shareholder, respectively, made in the Placement Agreement, turn out to be inconsistent with the actual state of affairs or legal position, or when the situation on the financial markets changes significantly, adversely affecting the possibility of carrying out the Offer. The Placement Agreement also contains representations and warranties regarding the Company, Echo and the Selling Shareholder to the extent that such representations and warranties are usually made in particular by issuers of securities in agreements of this type concluded in transactions similar to the Offer. Subject to the terms set out in the Placement Agreement, the Manager and other persons specified in the Placement Agreement will be released from liability and obligation to provide service in respect of specific claims, liabilities or costs that may be claimed from or incurred by the Manager or other persons designated in connection with the Placement Agreement (the so-called indemnification clause).

The Company, the Selling Shareholder and Echo have agreed not to issue, sell or offer the Company shares without the consent of the Manager within 180 days from the date of registration of rights to Series D Shares (if applicable) or Series D Shares (depending on whichever of these dates occurs earlier) in the securities accounts of Eligible Investors (or the holder of rights to Series D Shares, if applicable), except for the exclusions contained in the Placement Agreement in relation to each of these entities.

​Simultaneously, the Management Board informs that the Supervisory Board of Echo, acting in the interest of Echo and respecting the investment prospects for the shareholders who are not related entities, including the minority shareholders, consented to concluding a material transaction as defined in Article 90h. 1.1 of the Act of 29 July 2005 on public offering and conditions for introducing financial instruments to organized trading and on public companies ("Act on Public Offering") with related entities as defined in Article 90h. 1.2 of the Act on the Public Offering, namely, the Company and the Selling Shareholder, in the form of concluding the Placement Agreement and a price annex to the Placement Agreement in connection with the Offer. In the opinion of the Management Board, the Placing Agreement was concluded on market terms and is justified by Echo's interest in respecting the investment prospects of shareholders who are not related entities, including minority shareholders.

Legal reservations:

This current report has been prepared in accordance with the requirements of Article 17.1 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 Directive 2003/6/EC of the European Parliament and of the Council and Commission Directive 2003/ 124/EC, 2003/125/EC and 2004/72/EC and Article 56.1.2 of the Act of 29 July 2005 on public offering and conditions for introducing financial instruments to organized trading and on public companies. 

This current report is for information purposes only and constitutes the fulfilment of the disclosure  requirement imposed on Echo Investment S.A. with its registered office in Kielce ("Echo") as a public company whose shares are admitted and introduced to trading on the regulated market operated by the Warsaw Stock Exchange and (i) it is not made available to promote, directly or indirectly, the purchase or acquisition of the securities of Echo or its subsidiaries, including Archicom S.A. ("Company") or to solicit, directly or indirectly, the purchase or acquisition thereof, and (ii) it does not constitute advertising or promotional material prepared or published by Echo for the purposes of promoting the securities of Echo or its subsidiaries, including the Company, the subscription, purchase or offer thereof, or to solicit investors, directly or indirectly, to purchase or subscribe for such securities.

This current report is not an advertisement as defined in Article 22 of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and repealing Directive 2003/71/EC.

This current report and the information contained herein are not intended for publication, announcement, posting or dissemination, directly or indirectly, in or into the United States of America, Australia, Canada, Japan, South Africa or any other country where public dissemination of the information contained herein may be restricted or prohibited by law. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States of America except in transactions not subject to, or pursuant to an exception to, the registration requirements of the Securities Act. This current report is not an invitation to guarantee, underwrite, subscribe for, or otherwise acquire or dispose of any securities in any jurisdiction.

This current report and the terms described herein may not constitute the basis for action by persons other than Eligible Investors (as defined in this current report) or be used by such persons. Any investments or investment activities covered by this current report and the conditions described herein apply only to Eligible Investors. Apart from any duties and obligations that may be imposed on the Manager under applicable regulations, Powszechna Kasa Oszczedności Bank Polski Spółka Akcyjna – Oddział w Warszawie ("Manager"), its related entities and representatives do not and will not bear any liability and will not make representations or warranties, express or implied, as to the accuracy or completeness of this current report.

In particular, the Manager will not be liable to anyone other than Echo, the Company and DKR Echo Investment sp. z o.o. ("Selling Shareholder") in the context of providing protection to its clients, nor will the Manager provide advice on the offer or sale of shares covered by this current report ("Offered Shares") or on other matters referred to herein, to entities other than Echo, the Company and the Selling Shareholder.

The distribution of information about the offer or sale of the Offered Shares, including this current report, may be restricted by law in certain jurisdictions. Echo, the Company, the Selling Shareholder, the Manager or their related entities have not taken any action that could or is intended to enable the offering or sale of the Offered Shares in any jurisdiction, or to result in the possession or dissemination of any offer or advertising material regarding the Offered Shares, including this current report, in any jurisdiction where action is required for this purpose.

This current report does not identify or suggest, and is not intended to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Offered Shares. Any investment decision to subscribe for or purchase the Offered Shares as part of the offer or the sale of such shares, must be made solely on the basis of publicly available information that has not been independently verified by the Managers.

This current report does not constitute a recommendation regarding the investor's decision on the offer or sale of the Offered Shares. Each investor or potential investor should conduct his or her own research, analysis and evaluation of publicly available information, including that described in this current report.