SHARES AND SHAREHOLDING STRUCTURE
In 2020, the blue-chip WIG20 index fell by 7.7% while the all-cap WIG index was down 1.4% year on year. The price of PKN ORLEN shares dropped by 32.7% in the period. Taking into account dividend payment and reinvestment, the annual rate of return on investment in PKN ORLEN shares was -31.6% in PLN. In 2020, 381,236,269 PKN ORLEN shares were traded in transactions on the main stock exchange market, up 96.2% on 2019.
PKN ORLEN’s equityand shareholding structure
In 2020 and until the date of authorization of the ‘Management Board Report on the Activities of the ORLEN Group for 2020’, there were no changes in the structure of shareholders holding over 5% of the share capital of PKN ORLEN. The number of shares held by shareholders is presented on the basis of the most current, official information held by the Company.
PKN ORLEN shareholding structure 1)
1) PKN ORLEN shareholding structure as at the date of authorisation of this Report
- The share capital of PKN ORLEN is divided into 427,709,061 ordinary bearer shares with a par value of PLN 1.25 per share. PKN ORLEN shares are freely transferable.
- The PKN ORLEN Management Board has no knowledge of any agreements which would results in future changes of holdings of Company shares.
- In 2020, the ORLEN Group did not operate any employee stock option scheme.
- In 2020, PKN ORLEN did not buy back its own shares.
- As at December 31st 2020, members of the PKN ORLEN Management Board did not hold any Company shares.
- As at December 31st 2020, no PKN ORLEN shares were held by any member of the Parent’s Supervisory Board.
The shareholding structure of PKN ORLEN as at 1 January 2020, as at 31 December 2020 and as at the date of authorization of the ‘Management Board's Report on the ORLEN Group's Activities for 2020’ is available in the ‘Corporate Governance’ section.
For information on restrictions on the transfer of ownership of shares, see ‘Corporate Governance’.
1) Percentage change of PKN ORLEN and WIG 20 quotations relative to December 20th 2019.
Source: In-house analysis based on the WSE data.
According to the Strategy of ORLEN Group for 2021-2030, adopted in November 2020, the Company has implemented a dividend policy which assumes a dividend payment of minimum of PLN 3.5 per 1 share starting from year 2021. The Company will carry out the dividend policy taking into consideration liquidity situation and realization of strategic financial goals. The recommendation as to distribution of PKN ORLEN’s profit for 2020 is presented in Section 14.9.5. of Consolidated Financial Statement for 2020.
Exercising voting rightsshareholders’ special control powers
Detailed rules for the exercise of special control powers and voting rights are laid down in PKN ORLEN’s Articles of Association. According to the provisions of the Articles of Association, one PKN ORLEN share confers one voting right at the Company’s General Meeting. The voting rights of shareholders have been capped in the Articles of Association so that none of them may exercise more than 10% of total voting rights existing at the Company as at the date when the General Meeting is held. The cap on voting rights does not apply to the State Treasury and the depositary bank which has issued, on the basis of an agreement with the Company, depositary receipts in respect of Company shares (if this entity exercises voting rights conferred by Company shares).
Shareholders whose voting rights are aggregated or reduced are jointly referred to as a “Shareholder Grouping”. Detailed rules of such aggregation and reduction are specified in the Articles of Association. Shareholders forming a Shareholder Grouping may not exercise more than 10% of total voting rights existing at the Company as at the date when the General Meeting is held.
If the aggregated number of shares registered at the General Meeting by shareholders forming a Shareholder Grouping exceeds 10% of total voting rights at the Company, the voting rights resulting from the number of shares held are subject to reduction, the rules of which have been specified in detail in the Articles of Association.
The cap on voting rights described above does not apply to subsidiaries of the State Treasury.
The State Treasury, represented by the entity authorised to exercise the rights attached to the shares held by the State Treasury, shall have the right to appoint and remove one member of the Supervisory Board. In addition, one member of the PKN ORLEN Management Board is appointed and removed by the entity authorised to exercise the rights attached to the shares held by the State Treasury as long as the State Treasury holds at least one share in the Company.
Additionally, in accordance with the Articles of Association, as long as the State Treasury is entitled to appoint a Member of the Supervisory Board, a resolution granting consent for transactions involving any sale or encumbrance of shares in the following companies: Naftoport Sp. z o.o., Inowrocławskie Kopalnie Soli S.A. as well as the company to be established to operate the pipeline transport of liquid fuels, will require a vote in favour of its adoption by the Supervisory Board Member appointed by the State Treasury.
Special rights vested in the State Treasury as the Company’s shareholder may also result from generally applicable provisions of law, i.e.:
- the Act on Special Rights Vested in the Minister Competent for Energy and their Exercise in Certain Capital Companies or Groups Conducting Business Activities in the Electricity, Crude Oil and Gas Fuel Sectors, dated March 18th 2010,
- the Act on Control of Certain Investments, dated of July 24th 2015,
- the Act on State Property Management, dated December 16th 2016.
In 2020, PKN ORLEN’s investment grade ratings granted by two leading rating agencies Fitch Ratings and Moody’s Deuchland GmbH were maintained at the level of BBB- with a stable outlook and Baa2 with a positive outlook, respectively. In July 2020, Moody’s Investor Services upgraded PKN ORLEN's rating outlook from negative to positive, indicating that PKN ORLEN’s agreement with the European Commission on the acquisition of Grupa Lotos and the signing of a letter of intent with the State Treasury on the integration with PGNiG could improve the Company’s financial standing. Moody’s Agency in substantiation of the decision has indicated that PKN ORLEN’s acquisition processes, which are consolidating the polish power generation sector, will positively impact the business diversification and financial cash flow stability of the Company. It also emphasized that PKN ORLEN is going to finance the transaction mainly using its shares, resulting from increase of equity, while maintaining its debt at conservative level, not exceeding the 2.0-2.5x adjusted EBITDA result.
For a description of the ratings assigned to bonds and notes issued by the ORLEN Group, see Section 5.3.3 this Report.