Current report no.: 38/2015
Date of report: 2015-10-30
Subject: Conclusion of loan agreements and granting of guarantees by the subsidiaries of the Issuer
Text of the report:
The Management Board of CIECH S.A. (“the Company”, “the Issuer”) announces that on 29 October 2015 a loan agreement was concluded (“Loans Agreement”) between the Issuer as the borrower, the subsidiaries of the Issuer, CIECH Soda Polska S.A., CIECH Sarzyna S.A. and CIECH Soda Deutschland GmbH & Co. KG as guarantors (“Guarantors”), and other subsidiaries of CIECH S.A. as temporary guarantors (Janikowskie Zakłady Sodowe Janikosoda S.A., CIECH Vitrosilicon S.A., CIECH Nieruchomości S.A., CIECH Transclean sp. z o.o., CIECH Trading S.A., CIECH Pianki sp. z o.o., CIECH Cerium spółka z ograniczoną odpowiedzialnością sp.k., Cerium spółka z ograniczoną odpowiedzialnością S.K.A., SDC GmbH, Sodawerk Holding Staßfurt GmbH, Sodawerk Staßfurt Verwaltungs-GmbH (“Temporary Guarantors”) and Bank Handlowy w Warszawie S.A., Bank Millennium S.A., Bank Zachodni WBK S.A., Credit Agricole Bank Polska S.A., HSBC Bank Polska S.A., Industrial and Commercial Bank of China (Europe) S.A. (joint-stock company) Branch in Poland and Powszechna Kasa Oszczędności Bank Polski S.A. (“Lenders”) concerning the refinancing of the present financial debt of the Issuer’s capital group, the financing of the costs of re-financing and financing of the general corporate goals of the Issuer.
The agreement anticipates that two other subsidiaries of the Issuer will join the agreement as guarantors – KWG-Kraftwerksgesellschaft Staßfurt mbH (not later than 3 days after the first disbursement of the loans under the Loans Agreement) and CIECH Soda Romania S.A. (by 29 February 2016) (“Future Guarantors”).
Available loans:
Pursuant to the Loans Agreement, the Lenders provided the Company (subject to the delivery to the lenders of the documents conditioning the disbursement of the loans) the following loans:
two-currency fixed-term loan in PLN and EUR, up to a total value of PLN 1,340,000,000.00 granted by the Lenders for the purpose of: (i) refinancing of the debt deriving from, among other things, the issue by the subsidiary of the Issuer – Ciech Group Financing AB (publ) of secured superior debentures to the amount of EUR 245,000,000 (as notified by the Company in current report no. 60/2012) (“HY Debentures”), (ii) refinancing of the debt deriving from the revolving loan agreement with the highest priority to the amount of PLN 100,000,000 (as notified by the company in current report 30/2013), (iii) refinancing of the other debt of the Issuer resulting from other loans; (iv) financing of the costs connected with refinancing; and (v) financing of general corporate goals of the Company (“Fixed-term Loan”);
the revolving loan (renewable) in PLN, up to a total value of PLN 250,000,000.00, granted by the Lenders for the purpose of financing of general corporate goals and the current capital of the capital group of the Company, with the exclusion of acquisition and prepayment of the Fixed-term Loan ), (“Revolving Loan”, and, together with the Fixed-term Loan, “the Loans”);
The interest on the Loans is variable and it is established on the basis of the base rate of WIBOR / EURIBOR plus margin whose level depends on the level of net indebtedness indicator versus the operating result, increased by depreciation (EBITDA). The initial value of the margin shall amount to 1.5%.
Disbursement conditions:
Cash shall be made available to the Company under the Loans, provided that the Lenders receive standard documents and certificates, such as, inter alia, legal opinions, certificates confirming that there are no overdue tax liabilities, insurance policies and provided that there the loan remains intact until the disbursement date.
Conditions of repayment of the Loans:
The main conditions of repayment of the Loans are as follows:
depreciation of the Fixed-term Loan at the value of 14.93% of the amount of the loan on 30 December 2018, 30 December 2019 and 30 September 2020, repayment of the remaining part on the date preceding five years from the date of the first disbursement of the Fixed-Term Loan,
repayment of the Revolving Loan with the lapse of the length of the interest period for a given use, including a mechanism of automatic roll of such use for subsequent interest periods,
significant instances of violation, entitling the lenders to demand early repayment of the credits:
no payment of the amounts due to the Lenders
a breach of the financial indicator stipulated in the Loans Agreement;
no repayment of the refinanced financial debt by 31 December 2015;
failure to redeem the debentures of the 02 series (the issue whereof was notified by the Company in current report no. 62/2012) (“PL Debentures”) by 5 December 2017;
discontinuation of the whole or a significant part of the activity conducted by the Companies;
inconsistency with law;
the final deadline of repayment of the Fixed-term Loan and the Revolving Loan – the date falling five years after the date of entry into the Loans Agreement.
Security of repayment of the Loans:
The Loans are secured by guarantees granted by each of the Guarantors and Temporary Guarantors to each of the Lenders, to the value constituting 125% of the maximum commitment of a given Lender in a given currency, provided that the total amount of guarantees granted by each of the Guarantors and Temporary Guarantors shall not exceed 125% of the amount of the Loans. No separate remuneration is anticipated for the Guarantors and Temporary Guarantors in exchange for the granting of the guarantees.
In the period until the date of redemption of PL Debentures, security of the loans granted under the Loans Agreement shall be constituted by, inter alia, the security established by the Company, Guarantors, Temporary Guarantors and Future Guarantors for the purpose of securing the parallel debt created on the basis of an agreement between creditors, concluded on 28 November 2012 (as notified by the Company in current reports no. 60/2012 and no. 61/2012), including:
mortgages established on the real estate of certain subsidiaries of the Issuer;
pledges (registry and financial with regard to companies having their registered offices in Poland and their corresponding securities in Germany and Romania) on stocks, shares or shareholders’ rights in partnerships of the Guarantors, Temporary Guarantors and Future Guarantors;
registry pledges on moveable property and other property assets of the Issuer, Guarantors and Temporary Guarantors with registered offices in Poland;
financial pledges on the rights to funds deposited in bank accounts of the Issuer, Guarantors, Temporary Guarantors and Future Guarantors (including pledges corresponding to financial pledges of the security in Germany and Romania);
transfers concerning rights from insurance polices issued with regard to the assets forming an object of security and transfers concerning rights from inter-Group loans or credit instruments of another type and significant commercial contracts of the Issuer and selected Guarantors and Temporary Guarantors;
statement on submission to enforcement proceedings by the Issuer, Guarantors and Temporary Guarantors with registered offices in Poland;
powers of attorney to bank accounts of the Issuer, Guarantors and Temporary Guarantors with registered offices in Poland.
Release of a part of securities after redemption of PL Debentures
According to the Loans Agreement, upon full redemption by the Company of PL Debentures, the guarantees granted by Temporary Guarantors shall be released (the guarantees of Guarantors and Future Guarantors shall remain in force), and the package of securities of the Lenders’ receivables shall be limited to the following:
pledges (registry and financial with regard to companies having their registered offices in Poland and their corresponding securities in Germany and Romania) on stocks and shares of the Guarantors and Future Guarantors;
registry pledge on moveable assets and other property assets of the Issuer
financial pledges on the rights to funds deposited in bank accounts of the Issuer, Guarantors and Future Guarantors (including pledges corresponding to financial pledges of the security in Germany and Romania);
statement on submission to enforcement proceedings by the Issuer and Guarantors;
Other relevant conditions of the Loans Agreement:
According to the Loans Agreement, the Issue and the Guarantors also undertook to, inter alia:
comply with the restrictions stipulated in the Loans Agreement concerning the disposal of assets, with the exception of permitted disposals specified in the Loans Agreement;
failure to pay the dividend in the event of exceeding the financial indicator level specified in the Loans Agreement;
failure to incur financial debts and failure to grant loans in the event of exceeding the financial indicator level specified in the Loans Agreement.
The criterion for considering the Agreement to be a significant agreement: The Loans Agreement is a significant agreement because a total maximum value of the loans exceeds 10% of the value of revenues on sale of the capital group of the Issuer for a period of the last four financial quarters.
Signatures of the Company's representatives:
Maciej Tybura – President of the Management Board
Artur Osuchowski – Member of the Management Board
Legal basis: § 5 section 1 points 3 and 7 of the Regulation of the Minister of Finance of 19 February 2009 regarding current and periodic information delivered by issuers of securities and on conditions of recognition of information required under non-member state law regulations as equivalent (uniform text: Journal of Laws of 2014, item 133).
