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35/2015 The decision to merge the Company with KCI S.A



The Management Board of Gremi Media S.A. announces that on October 1, 2015 the Company decided to merge Gremi Media S.A. with its registered office in Warsaw at 51 Prosta street, 00-838 Warsaw, entered into the National Court Register maintained by the District Court of the Capital City of Warsaw in Warsaw, XII Commercial Department of the National Court Register, under KRS number 0000038155 (the Acquired Company) and KCI S.A. with its registered office in Cracow, at 53 Wrocławska street, 30-011 Cracow, entered into the National Court Register by the District Court for Kraków-Śródmieście in Cracow, XI Commercial Department of the National Court Register, under KRS number 0000112631 (as the Acquirer).

I. Type of the planned merger
The merger will be through the acquisition by the Acquiring Company of Gremi Media S.A. in the manner specified in art. 492 § 1 point 1) of the Commercial Companies Code i.e. by transferring all assets of the Acquired Company to the Acquirer and simultaneous increase in the share capital of the Acquirer through the issue of shares, which the Acquirer will grant to the shareholders of the Acquired Company.

II. Basic characteristics of the entities participating in the merger
The core business of Gremi Media S.A. are services tangible and intangible, and in particular activities related to the management of funds; managing financial markets; activities of holding companies; other activities auxiliary to financial services; other consultancy in the field of business and management; other monetary intermediation services, not elsewhere classified; other financial service activities, not elsewhere classified; other forms of lending.

The core business of KCI S.A. is among others: construction projects related to construction of buildings; buying and selling real estate properties for its own account; rental and management of own or leased properties; real estate agency; management of real estate; activities of central companies (head offices) and holdings, excluding financial holdings; activities of financial holdings.

III. Rationale and long-term objectives of the merger:
The rationale for the merger is the restructuring of the Capital Group KCI S.A., of which Gremi Media S.A. is a part, ensures concentration of its business operations while reducing its costs, as well as providing current shareholders of Gremi Media S.A. with the possibility to obtain shares of the merged business entity with a strong market position which will be KCI S.A.

Business activity of KCI S.A. is focused mainly on two areas, i.e. on the real estate segment that as a result of a number of consolidation processes is currently focused in the Acquiring Company and on the media segment. The media segment is formed by the subsidiary of KCI S.A. i.e. Gremi Media S.A. and Presspublica Sp. z o.o. together with its subsidiaries. The original concept of the development of KCI S.A. Capital Group assumed creation of a strong media group on the basis of Gremi Media S.A., which received in kind transfer of shares in the company Presspublica sp. z o.o. In view of the fact that the creation of legal risks relating to resolutions 30 and 31 of the Annual General Meeting of Gremi Media S.A. of July 6, 2015 (collectively, the "Resolutions") - on the basis of which there was an issue of the acquired by the Acquiring Company shares of Gremi Media S.A. Series I - in connection with the procedural actions taken by the two shareholders of Gremi Media S.A., and in the light of delaying the process of registration of the increase of the share capital of Gremi Media S.A. implemented on the basis of the Resolutions, the Management Board of KCI S.A. decided to withdraw from the investment in Gremi Media S.A. and intends to take actions to repeal Resolutions and reverse the process associated with attaining them, as reported today in the current report of KCI S.A. no 109/2015. For this purpose, KCI S.A. on October 1, 2015 introduced to the agenda of the Extraordinary General Meeting of Gremi Media S.A. convened on October 22, 2015 a point concerning the adoption of resolutions on the repeal of Resolutions, and declares support during the General Meeting for the appropriate draft resolution in that case. At the same time Gremi Media S.A. - which is currently the parent company to Presspublica sp. z o.o. - decided on October 1, 2015 to transform Presspublica sp. z o.o. from a limited liability company into a joint stock company and the completion of a process leading to the admission of the shares of so created company to trade on a regulated market operated by the Warsaw Stock Exchange in Warsaw (collectively the "IPO"), which was reported by Gremi Media S.A. in the current report no. 34/2015 dated October 2, 2015.

In this situation, ultimately the Capital Group KCI S.A. would include two listed companies, i.e. Gremi Media S.A. and Presspublica operating in the media segment. Thus, there will be no business reason for existence within the Capital Group KCI S.A. of two entities with the same profile. At the same time Gremi Media S.A. would be primarily the holding company not independent in the media activities. Accordingly, the purpose of the merger of KCI S.A. and Gremi Media S.A. is to consolidate and reduce the number of entities in the Capital Group KCI S.A., bringing to the creation of the economic operator providing consolidation of assets (including a majority stake in Presspublica in one entity, i.e. KCI S.A.), reduction of operating costs of discussed Group, better allocation of funds and a more rational financial flows between entities of the group, i.e. KCI S.A. and Gremi Media S.A. With the completion of the consolidation existing shareholders of Gremi Media S.A. will become shareholders of the company with a strong market position which is KCI S.A., operating not only in the media industry but also in real estate. The merger of two public companies into a single economic entity would also reduce the additional costs incurred by such companies that arise from legal provisions, in particular those relating to the periodic disclosure obligations.

The detailed terms of the merger will be determined by the work and analyzes undertaken in the course of discussions conducted by the Management Board of the Acquiring Company and the Acquired Company to agree the merger plan, which will be reported by the Issuer in accordance with the requirements of the law via further current reports.


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