Report 22/2025 - Statement of Withdrawal from the Contract by the Ordering Party PGE Energia Odnawialna S.A.

The Management Board of Mostostal Warszawa S.A. ("Company, Issuer") informs, with reference to the current report no. 12/2022 dated July 22, 2022, and the current report no. 1/2025 dated January 13, 2025, that today the Company has received correspondence from PGE Energia Odnawialna S.A. ("Ordering Party") - "Statement of withdrawal from the contract by the Ordering Party along with a demand for payment".

The aforementioned correspondence and the statement of withdrawal contained therein concerns the Agreement dated July 22, 2022, concluded between a consortium of companies ("Contractor"): GE Hydro France S.A.S. ("Leader" - 55.14% consortium share) and Mostostal Warszawa S.A. ("Partner" - 44.86% consortium share), with PGE Energia Odnawialna S.A. for the execution under the general contractor mode of the modernization of the technological part of ESP Porąbka-Żar (along with a valorization annex).

The Ordering Party indicated, among others, delay in the execution of the Investment, inability to complete it on time, conducting and planning works by the Contractor incorrectly, including as a result of a design-execution error in the technological layer, as reasons for the Withdrawal from the Agreement. The Ordering Party imposed contractual penalties in the amount of PLN 4.72 million for 28 days delay in commissioning hydro unit no. 3 and a penalty in the amount of PLN 105.33 million for withdrawal from the Agreement due to reasons attributable to the Contractor, as a result of which it issued debit notes indicating GE Hydro France S.A.S. as the payer. It also demanded the Contractor to return the unsettled advance payment received in connection with the conclusion of the Agreement, i.e., the amount of PLN 151.59 million.

The correspondence received from the Ordering Party is currently subject to legal analysis by the Issuer. The preliminary assessment of the grounds for withdrawal indicated by the Ordering Party suggests that these are circumstances not attributable to the Company.