The Council of Ministers approved the motion, submitted by the Minister of Treasury, to accept, pursuant to Article 33 (3) of the Act of 30 August 1996 on Commercialisation and Privatisation, a procedure different than that set out in Article 33 (1) of the Act, for the sale of up to 53 per cent of shares of Tauron Polska Energia Spółka Akcyjna with registered office in Katowice owned by the State Treasury and for the sale of up to 15 per cent of shares of Tauron Polska Energia SA under a stabilization option included in the above offer, to UniCredit CAIB Poland SA or UBS Limited (global coordinators indicated in the offer).

The Ministry of Treasury is preparing for the sale of 25 per cent of the company’s shares, in accordance with the prospectus of Tauron Polska Energia Spółka Akcyjna. The decision on the potential increase in the pool of shares to be offered will be taken within the next few days on the basis of market analyses and taking into account the current level of interest from potential investors.

The offer of the sale of up to 15 per cent of shares of the Tauron under the offer of the sale of up to 53 per cent of its shares in the company’s share capital to UniCredit CAIB Poland SA or UBS Limited, as proposed by the Ministry of Treasury, is dictated by the specific requirements of international financial markets. The purpose of the project is to stabilize the company’s share price at the Stock Exchange, i.e. the so-called stabilization option. It is a common and accepted practice adopted immediately after the offering, particularly in the case of transactions characterized by high market value.

In order to carry out the stabilization transactions, shares accounting for 10-15 per cent of the whole package will be covered by the option of returning them to the seller under the offering. A conditional sales agreement should provide that, if the Stabilization Manager acquires some shares as a result of stabilization transactions, these shares would be transferred back to the State Treasury.

In accordance with the “Programme for the Power Industry” adopted by the Council of Ministers on 28 March 2006, the privatisation of the power industry companies will enable the government to keep control over strategic energy resources, among others, through controlling companies such as Tauron. According to the “Polish Energy Policy until 2030”, as adopted by the government on 10 November 2009, the State Treasury shall hold a stake of shares so as to maintain its corporate governance over the company. The Tauron privatisation method was determined in the “Privatization Plan for the years 2008-2011”, as adopted by the Council of Ministers on 22 April 2008 and in its updated version: “Key Companies to be Privatised in the years 2009-2011”, as adopted by the Council of Ministers on 11 August 2009.