Conclusion of a revolving credit facility agreement, statement cancelling the unused credit facility and cancellation notice in respect of the facility agreement

Current report no : 30/2013
Report date : 8/9/2013
Abbreviated name : CIECH S.A.
Subject : Conclusion of a revolving credit facility agreement, statement cancelling the unused credit facility and cancellation notice in respect of the facility agreement
Legal basis : Art. 56 sec. 1 point 1 of the Act on Offerings – confidential information

Report : 

Acting on the basis of Art. 56 sec. 1 point 1 of the Act on Public Offerings and the Conditions of Introducing Financial Instruments to Organized Trading and on Public Companies, CIECH S.A. hereby states that:

i. on 9 August 2013 a new PLN 100,000,000 super senior revolving credit facility agreement was concluded by and between CIECH S.A. as borrower, Janikowskie Zakłady Sodowe Janikosoda S.A., Vitrosilicon S.A., Inowrocławskie Zakłady Chemiczne Soda Mątwy S.A., Soda Polska CIECH S.A., Transclean sp. z o.o., Zakłady Chemiczne Organika-Sarzyna S.A., CIECH Trading S.A., CIECH Pianki sp. z o.o., Soda Deutschland CIECH GmbH, Sodawerk Staßfurt Verwaltungs-GmbH, Sodawerk Holding Staßfurt GmbH, Sodawerk Staßfurt GmbH & Co. KG, CIECH Group Financing AB (publ) (the "Companies") as guarantors, and Bank Zachodni WBK S.A. (the "Facility Agent"), Bank Polska Kasa Opieki S.A. and Bank Powszechna Kasa Oszczędności Bank Polski S.A. (the "Lenders") (the "Facility Agreement"); and 
ii. CIECH S.A. has given cancellation notice for the existing PLN 100,000,000 super senior revolving credit facility agreement of 6 November 2012 concluded by and between, among others, CIECH S.A. as borrower, the Companies as guarantors, and Bank Handlowy w Warszawie S.A. as facility agent (the "Existing Facility Agreement").

Re. point (i) Conclusion of the Facility Agreement
Purpose of the Facility Agreement 
The purpose of the Facility Agreement is, inter alia, (i) to finance the short-term liquidity needs of CIECH S.A.; (ii) to enable the issuance of Guarantees in connection with the operational activity of the CIECH S.A. group; and (iii) for CIECH S.A. to make intra-group loans.

 

Available facilities:
Under the Facility Agreement, the banks undertook to make available to CIECH S.A. a PLN 100,000,000 revolving credit facility (the "Facility"). The Facility Agreement also provides for a guarantee line decreasing the limit of the available credit facility. 
The Facility Agreement also provides for the possibility of the Lenders granting an ancillary facility in the form of, inter alia, an overdraft facility or a bank guarantee.
The interest on the Facility is floating and is set as WIBOR plus the fixed margin stated in the Facility Agreement.

 

Effective date 
The Facility Agreement comes into force upon the Facility Agent's confirming to CIECH S.A. and the Lenders that the unused facility made available under the Existing Facility Agreement has been cancelled and the Existing Facility Agreement has been terminated (the Effective Date).

Conditions precedent to the availability of the Facility: 
The funds under the Facility Agreement will be made available on condition the Facility Agent has notified CIECH S.A. and the Original Lenders that it has received (or has waived receipt of) all the documents and evidence set out in a schedule to the Facility Agreement, provided that the representations of CIECH S.A. and the Companies given in the Facility Agreement are true at the time and that the violation of the terms referred to in the Facility Agreement has not occurred (and is not continuing). 
The following, inter alia, are also conditions precedent for the availability of the funds under the Facility (i) CIECH S.A.'s and the Companies' obtaining all corporate consents and (ii) CIECH S.A.'s and the Companies' making statements of submission to enforcement pursuant to Art. 97 of the Banking Law.

Conditions of repayment of the Facility: 
The principal conditions of repayment of the Facility include:

• The final repayment date of all the liabilities incurred under the Facility Agreement is the end of the 36th month counted from the Effective Date of the Facility Agreement.
1. Mandatory prepayment of the facility takes place in the following circumstances: 
   - a change of control over CIECH S.A. (as defined in the conditions of issue of Polish-law governed notes for PLN 320,000,000 (see current report no. 62/2012) and in the agreement of 28 November 2012 setting out the conditions of issue of notes and granting an indenture (see current report no. 61/2012)); and 
   - illegality on the part of the Original Lenders or the Facility Agent.

Security for repayment of the Facility 
Security of the Facility granted under the Facility Agreement will be in the form of guarantees granted by the Companies and the existing security interests created as security for the parallel debt that was created under the inter-creditor agreement of 28 November 2012 (see current report no. 60/2012), including:

• mortgages established over the real properties of certain Companies and CIECH S.A.;
• registered pledges and financial pledges over the shares in the Companies;
• registered pledges over the movables and other assets of the Companies and CIECH S.A.;
• financial pledges over the rights to the money held in the bank accounts of the Companies and CIECH S.A.;
• assignments of rights under insurance policies issued for the property on which security has been established and conditional assignments of rights under intra-group loans or other types of credit instruments that are to be used for the distribution of funds under facilities to the Companies, and material trade contracts of the Companies and CIECH S.A.;
• statements of the Companies and CIECH S.A. of submission to enforcement; and
1. powers of attorney to use the bank accounts of certain Companies and CIECH S.A.

Other material terms of the Facility Agreement: 
On the basis of the Facility Agreement, CIECH S.A. and the Companies further undertook, inter alia:

• to maintain at a specific level the net leverage ratio (i.e. the ratio of the consolidated net borrowings on the last day of a given measurement period to consolidated EBITDA), measured for the CIECH S.A. group and tested semi-annually:
  

  Measurement period ending	Maximum ratio
  30 June 2013	4,5
  31 December 2013	4,3
  30 June 2014	3,6
  31 December 2014	3,6
  30 June 2015	3,0
  31 December 2015	3,0
  30 June 2016	3,0

• not to establish any new security interests;
• not to dispose of any assets except as permitted under the Facility Agreement;
1. not to incur any financial indebtedness and not to grant any loans, credit, guarantees or sureties except as permitted under the Facility Agreement.

Re. point (ii) Cancellation notice in respect of the Existing Facility Agreement 
On 9 August 2013, CIECH S.A. made a statement to cancel the unused facility and gave cancellation notice with respect to the Existing Facility Agreement. The cancellation notice will take effect 10 business days from the date it was given to Bank Handlowy w Warszawie S.A. acting as facility agent under the Existing Facility Agreement.

 

The Facility Agreement has been concluded in order to replace the Facility Agreement and improve the commercial conditions of the financing made available, and does not involve any increase in the level of the CIECH Group's indebtedness.

Legal basis: Article 56 section 1 item 1 of the Act of July 29, 2005 on Public Offering and the Conditions for Introducing Financial Instruments to Organized Trading and on Public Companies

Signatures of the Company’s Representatives : Artur Osuchowski – Member of the Management Board, Andrzej Kopeć –Member of the Management Board 

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