What are the most important milestones for the next 6-12 months, after which shareholders will be able to assess that the development of Polska Grupa Hutnicza S.A. is proceeding according to plan?
The Company’s Management Board indicates key stages of PGH’s development in two plan layers:
a) transactional, regarding the implementation of the investment agreement dated August 17, 2026
b) operational-contractual, regarding the implementation of the production program for components for 250 kg aircraft bombs – equivalent to the Mk-82 bomb – and 155 mm caliber components.
A. Transactional Layer Stage
B. Operational-Contractual Layer Stage
The Issuer’s Management Board indicates that the implementation of some of the above elements is not dependent on the Company, but it will exercise due diligence to implement each of the individual stages.
How does the Management Board view PGH’s ultimate role in the broader strategy of building the Polish Military Group around Niewiadów and cooperating with Virtus S.A. (Virtus)?
NPGM and Zakłady Sprzętu Precyzyjnego “Niewiadów” sp. z o.o. (“Niewiadów”) are building a verticalized ammunition production ecosystem: 155 mm and 40 mm caliber production capabilities, anti-personnel mine production, and a research and development center with a testing ground. Niewiadów orders components, integrates the final product (elaboration, completion), and is responsible for sales to end-users.
The Issuer’s Management Board intends for Huta Małapanew and Andoria, within the Company’s capital group, to become qualified suppliers of casting components – 250 kg aircraft bomb bodies (Mk-82 equivalent) and 155 mm caliber components – with exclusive supply to Niewiadów within the scope of the program.
Virtus is primarily responsible for organizing financing for the Issuer and refinancing the debt of Huta Małapanew and Andoria, as well as providing support in restructuring their financial situation, including acquiring external dual-use orders.
What does the Management Board currently consider to be the greatest risk to the implementation of the presented development plan for Polska Grupa Hutnicza?
The PGH Management Board considers the most important risk factor to be the dependence of closing the consolidation process of 100% shares of Andoria and Huta Małapanew in the Company (Share Exchange) on events beyond the Issuer’s control, including:
The materialization of this risk would mean a delay in the transaction schedule, and in an extreme case, the failure to consolidate Andoria and Huta Małapanew within the Issuer’s capital group under the agreed terms.
The second area of risk is business-related. The implementation of the serial production process still requires, among other things, binding executive agreements, confirmation of order volumes by end-users, the results of qualification and certification work for the 250 kg bomb body (Mk82 equivalent) conducted with ITWL under the NPGM-ITWL framework agreement of July 27, 2026, and MSWiA licenses for Andoria and Huta Mała Panew for the production of 155 mm caliber components. For this reason, the PGH Management Board adopts a phased approach: funds from the issuance finance the working capital and preparatory work of both plants, and investments in serial production will commence after the above conditions are confirmed.
The above assessment reflects the state of knowledge of the Company’s Management Board as of the date of this report and may change. The Management Board will inform shareholders of significant changes in this regard in accordance with applicable regulations.
According to available information, the share consolidation, as a result of which the par value of one share will increase from PLN 0.10 to PLN 1.00, is to be carried out on July 20, 2026. At the same time, the resolutions of the Extraordinary General Meeting provide for a reduction of the share capital by decreasing the par value of shares from PLN 1.00 to PLN 0.10.
In connection with the above, we would be grateful for information regarding:
– whether the reduction of the share capital has already been registered by the National Court Register (KRS),
– what is the planned or actual effective date of the reduction of the par value of shares from PLN 1.00 to PLN 0.10,
– whether the Company plans to publish a separate announcement regarding the effectiveness of this change.
As of the date of this answer, the reduction of the Company’s share capital has not been registered in the National Court Register. Due to the requirements and procedures related to share consolidation, imposed by the National Depository for Securities S.A., the Company will submit an application for registration of the share capital reduction to the registration court next week.
In accordance with § 5 of Resolution No. 3 dated January 28, 2026, of the Company’s Extraordinary General Meeting regarding the reduction of the Company’s share capital and amendment of the Company’s Articles of Association: “The reduction of the Company’s share capital and the amendment of the Company’s Articles of Association shall become effective on the date of entry into the National Court Register’s register of entrepreneurs“. The effectiveness of the provisions of the aforementioned resolution is therefore dependent on the registration court’s review of the application for share capital reduction.
In accordance with Article 20a, paragraph 1 of the Act on the National Court Register: “The registration court shall examine the application for entry no later than 7 days from the date of its submission to the court“.
At the current stage, the Company is unable to specify the exact date of registration of the aforementioned resolution by the registration court, and thus the effective date of the reduction of the par value of shares from PLN 1.00 to PLN 0.10. In practice, due to the significant workload of registration courts, the statutory deadline for examining applications is often extended. At the same time, the Company will make every effort to ensure that the application is processed as soon as possible.
The Company will provide information about the registration entry in a current report after the court registers the amendment to the Company’s articles of association through the reduction of share capital, including the change in the par value of shares from PLN 1.00 to PLN 0.10.