53.8 Subsequent events

53.8.1.  Lease agreement for the building of PZU’s new Head Office

On 4 February 2020 the PZU Management Board adopted a resolution to select an offer in the proceeding to lease headquarters for the PZU Head Office and sign a letter of intent with Bitra Enterprise 1 sp. z o.o., a company belonging to the Skanska Group. According to the resolution in question, the PZU Management Board accepted a scenario on how to proceed in the selection of headquarters for the PZU head office involving the conclusion of a lease agreement for office and storage space and parking spaces with Bitra Enterprise 1 sp. z o.o., with its registered office at Al. Solidarności 173, 00-877 Warsaw (“Lessor”) and approved the selection of building “Y”; it is under construction in the Generation Park complex situated at Rondo Daszyńskiego 4 in Warsaw (“Building”) as the new headquarters of the PZU Head Office. PZU and PZU Życie signed a letter of intent with the Lessor on 4 February 2020 to specify the preliminary terms and conditions of the agreement to lease office space, office and commercial space, storage space and parking spaces. The letter of intent contemplates that the future lease agreement will contain contractual penalties regarding the Lessor’s liability for delays in handing over the leased facility, hindrances and impediments to usage of the leased area and violations of the non-compete clause and right of first refusal to purchase the Building. The letter of intent contains a declaration on how to proceed and sign the lease agreement by 29 May 2020 provided that the parties reach an agreement on all of the other terms and conditions of lease and agree upon the wording of the lease agreement.

The total estimated gross value of the prospective agreement to lease the Building over the 10 years of its duration is approximately PLN 805 million, while the gross incremental costs related to relocation are approximately PLN 86 million. These amounts may vary as a result of specific arrangements concerning the final arrangement, amount of space leased, the final scope of adaptation work, the commencement date of the lease agreement and the date of translating some of the costs and financial incentives between EUR and PLN.

The selection of this Building and the signing of the letter of intent do not imply that this transaction will be executed.

53.8.2.  Group layoff program in Pekao

On 20 February 2020, in accordance with the provisions of the Act on the Rules for Terminating Employment Relationships, the Pekao Management Board adopted a resolution concerning the intention of conducting group layoffs and commencing the consultation procedure on group layoffs.

In the period from 12 March 2020 to 31 October 2020, Pekao intends to terminate employment contracts with a maximum of 1,200 employees and modify employment conditions to a maximum of 1,350 employees.

On 20 February 2020 Pekao notified the company’s trade union organizations of the reasons for the planned group layoff and requested that the trade union organizations engage in consultation.

Moreover, Pekao notified the labor office of its intention to conduct group layoffs. After completing the consultations with trade union organizations required by the law, Pekao will provide information about the estimate value of the provision recognized in connection with the downsizing.