09.10.2018

Decision on the intention to merge STALPROFIL S.A. and STALPROFIL HANDEL sp. z o.o.

The Management Board of STALPROFIL S.A. with its registered office in Dąbrowa Górnicza on 9 October 2018 adopted a resolution regarding the intention to merge the following companies: STALPROFIL S.A. with its registered office in Dąbrowa Górnicza (the Acquiring Company) and STALPROFIL HANDEL sp. z o.o. with its registered office in Dąbrowa Górnicza (the Acquired Company) .
Both merging companies on 9 October 2018 agreed the Merger Plan, which constitutes an attachment to this report. The Merger Plan will be made available on the Company's website at: www.stalprofil.com.pl starting from 9 October 2018, continuously until the day of completion of the Extraordinary General Meeting of STALPROFIL S.A. and the Extraordinary Shareholders Meeting of STALPROFIL HANDEL sp. z o.o., adopting resolutions regarding the merger.

Characteristics of the business entities to be merged:

The Acquiring Company:
The basic business of STALPROFIL S.A. is wholesale trade of metallurgical products from non-alloy steel. Sales of steel products, both domestic and foreign, the Company runs from two commercial warehouses located in Katowice and Dąbrowa Górnicza. In addition, the STALPROFIL S.A. branch in Zabrze is a contractor of works related to the construction of gas networks, including mainly gas pipelines, connections for gas consumers and reduction and measurement stations. The branch also performs construction and assembly works in the scope of execution of heating, water supply and sewage networks.
STALPROFIL S.A. acts as the parent company for four subsidiaries, through which it diversifies its core business. The STALPROFIL S.A. Capital Group operates in the steel trade and processing segment as well as in the infrastructure segment of gas transmission networks.

The Acquired Company:
STALPROFIL HANDEL sp. z o.o. commenced its commercial activity in 2015 and its core business is "the sale of metals and metal ores" (PKD 46.72Z), in mainly wholesale of metallurgical products made of non-alloy steel. STALPROFIL HANDEL sp. z o.o. was established as a special purpose vehicle, complementing the Group's operations in the field of trade in metallurgical products, and its aim was to intensify the Group's sales on the steel market. STALPROFIL HANDEL sp. z o.o. performed its activities mainly in cooperation with the parent company, STALPROFIL S.A., on the basis of its broad commercial offer.

Merging method:
The merger will take place pursuant to art. 492 §1 point 1 of the Commercial Companies Code, i.e. by transferring all assets of the Acquired Company to the Acquiring Company. The Acquiring Company has all the shares and is the sole shareholder of the Acquired Company.

In connection with the above:
- merger of the Companies will be carried out in a simplified manner in accordance with art. 516 §6 of the Commercial Companies Code, in connection with the takeover by the Acquiring Company of its sole proprietorship - the Acquired Company,
- no reports of the Management Boards of the merging Companies referred to in art. 501 KSH will be made,
- the Merger Plan will not be reviewed by an expert appointed by the Registry Court referred to in art. 502 of the Commercial Companies Code and an expert opinion referred to in art. 503 KSH will not be made,
- the merger will be carried out without increasing the share capital pursuant to art. 515 § 1of the CCC,
- the information referred to in art. 499 §1 items 2-4 of the Commercial Companies Code is ommited, pursuant to art. 516 §6 sentence 2 of the CCC, according to which the abovementioned provisions are ommited, and the merger will take place without exchanging shares of STALPROFIL HANDEL sp. z o.o. for shares of STALPROFIL S.A.,
- providing the Merger Plan and documents referred to in art. 505 Commercial Companies Code on the websites of the Companies shall take place at least one month before the date of commencement of the Extraordinary General Meeting of the Acquiring Company and the Extraordinary General Meeting of Shareholders of the Acquired Company,
- the merger does not require notification of the intention of concentration to the President of the Office of Competition and Consumer Protection (Article 14 item 5 of the Act of 16 February 2007 on competition and consumer protection, Dz.U.2018.798)

The resolutions on the merger of the Companies will be adopted by the General Meeting of the Acquiring Company and the General Meeting of Shareholders of the Acquired Company, pursuant to art. 506 KSH in conj. with art. 516 §1 second sentence of the Commercial Companies Code. The transfer of the assets of the Acquired Company to the Acquiring Company will take place on the day the merger is entered into the Register of Entrepreneurs.

Justification and purpose of the decision on the intention to merge:
The merger of STALPROFIL S.A. and STALPROFIL HANDEL sp. z o.o. is a continuation of the restructuring activities of the STALPROFIL S.A. Capital Group, which aim to reduce costs, improve the efficiency of asset management, and maximize the synergy effect within the Group. Since the acquired company realized the business goal set for it and its function in the Group was taken over by another subsidiary - STF DYSTRYBUCJA sp. z o.o., there is no business justification for continuing to incur the costs of its operation.
The purpose of the merger of STALPROFIL S.A. with its registered office in Dąbrowa Górnicza and STALPROFIL HANDEL sp. z o.o. based in Dąbrowa Górnicza is to reduce the costs related to trade in metallurgical products by the STALPROFIL S.A. Capital Group.