2.4.1 Significant restrictions on the ability to transfer funds to the Group from interests in joint ventures

Polska Grupa Górnicza S.A.

Under Polska Grupa Górnicza S.A.’s (PGG) note programme agreement, dividends may be paid only when all of the following conditions are met:

• A part of notes of individual tranches maturing in the period for which the dividend is to be paid are redeemed before dividend can be distributed;
• The following ratios are maintained within the permitted limits: net debt/EBITDA less replacement capital expenditure (for the last quarter), DSCR (ratio of cash available for debt servicing to mature debt – for the last year) and the Future Cash Flow Ratio (for the last quarter);
• The forecast values of the ratios will not exceed the permitted limits by the note redemption date as a result of the payment;
• The dividend will be paid to the shareholders and to the holders of participation notes in the proportion defined in the terms and conditions of participation notes.

Elektrociepłownia Stalowa Wola S.A. (ECSW)

On March 8th 2018, Elektrociepłownia Stalowa Wola S.A. signed a loan agreement with Bank Gospodarstwa Krajowego (BGK) and PGNiG to refinance debt and finance the construction of the CCGT unit in Stalowa Wola, each lender providing PLN 450 million. The CCGT unit was commissioned on September 30th 2020. The facility is due for repayment by June 14th 2030.

ECSW’s existing loan agreements with BGK and PGNiG and the Subordination Agreement entered into by and between ECSW and PGNiG, PGNiG Termika S.A., Tauron Polska Energia S.A., Tauron Wytwarzanie S.A. and BGK have the effect of preventing ECSW from:

• declaring or paying any compensation, dividend, fee or other distribution (or interest on any unpaid compensation, dividend, fee or other distribution, whether in cash or in kind) in respect of the shares held;
• repaying or distributing any dividend or retained earnings until the loan to BGK and PGNiG S.A. (senior debt) is repaid.