Position of the Management Board of STALPROFIL S.A. regarding the planned merger of STALPROFIL S.A. and STALPROFIL HANDEL sp. z o.o.

The Management Board of Stalprofil SA in reference to the current report 29/2018 dated 9 October 2018 regarding the decision on the intention to merge STALPROFIL S.A. (the Acquiring Company) with the subsidiary STALPROFIL HANDEL sp. z o.o. with the registered office in Dąbrowa Górnicza (the Acquired Company) informs that he positively assesses the planned merger and recommends to the Company's Shareholders voting during the Extraordinary General Meeting of STALPROFIL S.A., convened for 12 November 2018, for the adoption of a resolution regarding the merger of STALPROFIL S.A. and STALPROFIL HANDEL sp. z o.o.
The Management Board of the Company conducts ongoing activities aimed at adjusting the structure of the STALPROFIL S.A. Capital Group to the dynamically changing market environment. The planned merger of STALPROFIL S.A. and STALPROFIL HANDEL sp. z o.o. is a continuation of restructuring activities of the STALPROFIL S.A. Capital Group, which aim to reduce costs, improve property management efficiency and maximize the synergy effect within the Group.
STALPROFIL HANDEL sp. z o.o. was established in 2015 as a special purpose vehicle, complementing the Group's operations in the field of trading 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.
The Acquired Company fulfilled the business goal set for it, and its function in the Group was taken over by another subsidiary - STF DYSTRYBUCJA sp. z o.o. In connection with the above, the Management Board of STALPROFIL S.A., stating that there is no business justification for continuing to bear the operating costs of STALPROFIL HANDEL sp z o.o., decided to take action to connect it with STALPROFIL S.A.
In opinion of the Management Board, as a result of the merger of STALPROFIL S.A. and STALPROFIL HANDEL sp. z o..o, the costs incurred by the STALPROFIL S.A. Capital Group for trading related to metallurgical products will be reduced without affecting the level of its sales.
The merger will take place in accordance with art. 492 § 1 para. 1 of the Commercial Companies Code, i.e. by transferring all assets of the Acquired Company to the Acquiring Company. Due to the fact that the Acquiring Company is the sole shareholder of the Acquired Company, the 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 above, the Merger Plan will not be audited by a court appointed by a court of law and no reports of the merging companies will be prepared. The Acquiring Company owns 100% shares of the Acquired Company and pursuant to art. 515 § 1 of the CCC, the merger of the companies will take place without increasing the share capital. 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 kept by the court competent for the Acquiring Company. The merger plan with attachments has been made available on the Company's website: www.stalprofil.com.pl and published in the current report 29/2018 dated 9 October 2018.