Body of the report:
With reference to Current Report No. 93/2025 on the commencement of preparations for the business restructuring process at JSW, the Management Board of Jastrzębska Spółka Węglowa S.A. ["JSW," "Company"] hereby reports that the terms and conditions of the suspension memorandum of agreement ["Draft Suspension Memorandum of Agreement"] and the implementation memorandum of agreement ["Draft Implementation Memorandum of Agreement"] with the Representative Trade Union Organizations operating at JSW have been agreed upon.
The draft Suspension Memorandum of Agreement will be subject to a referendum among the Company's employees.
The subject of the Draft Suspension Memorandum of Agreement is the suspension of the application of the provisions of certain collective agreements concluded with trade unions and internal regulations in force at JSW, and the exceptional, temporary application of less favorable terms and conditions of employment than those resulting from employment contracts concluded with employees to the extent specified in the Draft Suspension Memorandum of Agreement, including the suspension of the right to the 14th salary for 2026, postponement of the payment date of the 14th salary for 2025 to 2027, the payment of the Miner’s Festival bonus and the Miner’s Festival cash equivalent for 2025–2027 in installments, the suspension of the payment of the free coal allowance and reduction of other benefits [inter alia reduction of meal subsidies].
The Draft Suspension Memorandum of Agreement stipulates that if, during the term of the Suspension Memorandum of Agreement, there is a significant improvement in the economic standing of JSW, the Company will pay the suspended benefits, without interest, taking into account the cash sweep mechanism, which assumes proportional distribution of cash surplus to employees and financial institutions.
The Draft Suspension Memorandum of Agreement provides that the Suspension Memorandum of Agreement will enter into force on the date of its signing, with effect from 1 February 2026, and will be concluded for a period of 23 months, i.e. until 31 December 2027.
The subject of the Draft Implementation Memorandum of Agreement is to establish the mutual obligations and rights of the parties related to the entry into force and implementation of the Suspension Memorandum of Agreement. In accordance with the Draft Implementation Memorandum of Agreement the Company will make every effort to raise the financing necessary for the continued operation of JSW by the end of March 2026, with the proviso that such financing is conditional upon the Company's Management Board developing a JSW remedy program taking into account the rules for financing JSW specified by the financial institutions.
In the Draft Implementation Memorandum of Agreement, the Company declares that it is conducting talks on raising new funds in the amount of up to PLN 2.9 billion, and that it is taking steps to raise funds from the sale of assets – shares in subsidiaries of JSW S.A. and other non-core assets of JSW S.A.
The Draft Implementation Memorandum of Agreement provides that if JSW fails to obtain the financing by 31 March 2026, each party will have the right to terminate the Suspension Memorandum of Agreement and the Implementation Memorandum of Agreement with 3 months' notice, provided that obtaining financing during the notice period will render the termination ineffective.
The Draft Implementation Memorandum of Agreement provides that, under the Implementation Memorandum of Agreement, the Company will also undertake, within specified time limits, actions consisting in the sale or restructuring of selected companies from the JSW Group, as well as reducing employment at the Production Support Unit and the Management Board Office.
The Draft Implementation Memorandum of Agreement stipulates that if the sale, restructuring, or recapitalization of certain assets is not completed by 31 December 2026, or 31 March 2027 [depending on the action], trade union organizations will be entitled to terminate the Suspension Memorandum of Agreement and the Implementation Memorandum of Agreement.
The Company will disclose information on further steps in this matter in a separate current report.
The Draft Suspension Memorandum of Agreement is attached as Appendix 1 to this report.
Legal basis: Article 17(1) of Regulation [EU] No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse and Repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.
