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Current Report No.: 17/2020

Conclusion of a supplier financing agreement by the Issuer and its subsidiaries

Current Report No.: 17/2020

Date of preparation:
 07.04.2020

Abbreviated name of the Issuer: CIECH S.A.

Subject: Conclusion of a supplier financing agreement by the Issuer and its subsidiaries

Legal basis: Art. 17.1 of the MAR – inside information

Report:

The Management Board of CIECH S.A. (the “Issuer”) herewith informs that on 7 April 2020, the Issuer and its subsidiaries: CIECH Sarzyna S.A., CIECH Pianki sp. z o.o., CIECH Soda Polska S.A. and CIECH Vitrosilicon S.A. (hereinafter jointly referred to as the “Recipients”) entered into a supplier financing agreement (reverse factoring) (the “Agreement”) with BNP Paribas Faktoring sp. z o.o. (the “Factor”).

The conclusion of the Agreement fits in well with the Issuer's policy aimed at limiting risks related to the current market situation. Reverse factoring is to ensure an improvement in the Recipients’ liquidity.

The subject matter of the Agreement is to define terms and conditions of cooperation with regard to financing the Recipients' suppliers, including conditions under which the Factor is to acquire amounts receivable from suppliers that have been designated by the companies defined as the Recipients.

The Agreement provides for two possible options in terms of payments to be made by the Factor with respect to the accounts receivable of the suppliers (at the discretion of the respective supplier): 

  1. repayment before the due date indicated in the VAT invoice issued by the supplier, the cost of the Factor’s financing, until the payment date, will be borne by the supplier and the Recipient’s repayment of their liabilities to the Factor made after the grace period,
  2. repayment on or before the due date indicated in the VAT invoice issued by the supplier and the Recipient’s repayment of their liabilities to the Factor after the grace period.

The Agreement grants the Recipients a total limit of PLN 150,000,000.00 (one hundred fifty million and 00/100 zlotys). This is a revolving limit. In the cases specified in the Agreement and in the period of notice, the Factor has the right to refuse to acquire accounts receivable.

The collateral for the repayment of the Recipients’ liabilities to the Factor under the Reverse Factoring Agreement is:

  1. joint and several liability of companies covered by the definition of Recipients for their liabilities to the Factor,
  2. debt accession by CIECH Energy Deutschland GmbH and CIECH Soda Deutschland GmbH & CO KG. (hereinafter jointly referred to as the “German Companies”), provided however that the joint and several liability of the German Companies for the Recipients’ liabilities to the Factor will be limited to PLN 187,500,000.00 (one hundred eighty seven million five hundred thousand and 00/100 zlotys). 

The Reverse Factoring Agreement has been concluded for an indefinite period.

Any other terms and conditions of the Reverse Factoring Agreement do not deviate from those commonly used in business transactions for this type of agreement. 

In cooperation with BNP Paribas Bank Polska S.A., the Issuer intends to provide the reverse factoring coverage also to its German Companies. According to the terms of the Agreement, the total limit available to the Recipients and the German Companies may not exceed: PLN 200,000,000.00 (two hundred million and 00/100 zlotys).  

Legal basis: Article 17.1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on Market Abuse (the Market Abuse Regulation) 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 (Official Journal of the European Union L No. 173, p. 1). 

Signatures of the Company’s representatives:

Dawid Jakubowicz – President of the Management Board 

Mirosław Skowron - Member of the Management Board


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