Agricultural Bank of China (Luxembourg) contributes to a €350 million EUR syndicated sustainability-linked loan to Prometeon Tyre Group for refinancing and general corporate purposes

Project narrative

On March 13, 2017, a syndicate of four banks — China Construction Bank (Europe) S.A. (CCB Europe), Bank of America Merrill Lynch International Limited, HSBC Bank Plc, and the Milan Branch of ING Bank N.V. — entered into a €600 million EUR syndicated senior loan agreement with Pirelli Industrial S.r.l. — an Italy-incorporated tire manufacturer jointly owned at the time by High Grade (HK) Investment Management Limited, a Hong Kong-incorporated wholly-owned subsidiary of China Cinda (HK) Holdings Company Limited (CINDA), a Hong Kong-incorporated wholly-owned subsidiary of Chinese state-owned company China Cinda Asset Management Co., Ltd. (38% stake); by Aeolus Tyre Co., Ltd., a Chinese tire producer listed on the Shanghai Stock Exchange with state-owned China National Tire & Rubber Corporation holding 42.58% as its largest shareholder (10% stake); and by TP Industrial Holding S.p.A., an Italy-incorporated special purpose vehicle wholly-owned by Marco Polo International Italy S.p.A., which was then wholly-owned by Marco Polo International Italy S.p.A. (52% stake) [an Italy-incorporated holding company and joint venture owned by Luxembourg-incorporated Fourteen Sundew S.à r.l. (65% stake), wholly owned by Hong Kong-incorporated CNRC International Holding (HK) Limited, which was 25% owned by Chinese state-owned Silk Road Fund Co. Ltd. and 75% owned by Hong Kong CNRC International Limited, a Hong Kong-incorporated wholly-owned subsidiary of China National Tire & Rubber Co., Ltd. (CNRC), a wholly-owned subsidiary of Chinese state-owned China National Chemical Corporation (ChemChina); by Camfin S.p.A. (22.4% stake); and by Long-Term Investments Luxembourg S.A., a Luxembourg-incorporated company wholly-owned by closed-end direct investment fund “RFR Long-Term Investments”, which was wholly owned by Russia-incorporated Long-Term Investments LLC, a company owned by Neftgarant Non-State Pension Fund, a Russian institutional, autonomous and independent investor associated with Russian majority state-owned oil company PJSC Rosneft Oil Company (12.6% stake)] — for refinancing purposes. This loan carried a maturity period of three years and a final maturity date in March 2023, albeit with a two one-year extension options. The loan was divided into two tranches: a €450 million EUR term loan facility and a €150 million EUR revolving facility. On April 1, 2017, Pirelli Industrial changed its name to Prometeon Tyre Group S.r.l.. Then, on July 11, 2017, Prometeon announced that it had finished syndication on the €600 million EUR facility, with a further three lenders — including Industrial and Commercial Bank of China (ICBC), Banco Santander, S.A., Crédit Agricole Corporate and Investment Bank (CACIB), and Banco do Brasil S.A. — joining the syndicate, giving it a total of eight lenders. Record ID#110277 captures CCB Europe's contribution. Record ID#110304 captures ICBC's contribution. The proceeds were to be used for refinancing purposes to help promote Prometeon’s financial independence and autonomy following its separation from the Pirelli Group. Circa May 7, 2019, the lending syndicate — still including CCB Europe and ICBC — entered into an amendment agreement with Prometeon Tyre Group for the €600 million EUR facility; it was an amendment, restatement, and extension, extending the maturity period by one year — for a new maturity period of four years — to mature in March 2021, in line with the extension option, with an option to extend to Match 2022. Furthermore, TP Industrial Holding provided shareholder financing of €50 million EUR to pay off part the €600 million EUR, leaving it to €550 million EUR. Record ID#110305 captures CCB Europe's contribution to the debt rescheduling. Record ID#110306 captures ICBC's contribution to the debt rescheduling. Circa December 30, 2021, a syndicate of eight lenders — including Agricultural Bank of China (Luxembourg) S.A. (ABC Luxembourg) and CCB Europe — entered into a €350 million EUR syndicated sustainability-linked facilities agreement with Prometeon Tyre Group S.r.l. for refinancing and general corporate purposes. The loan was divided into a €200 million EUR term loan and a €150 million EUR multi-currency revolving credit facility (RCF). The loan carried a maturity period of three years with a one-year extension option and a variable interest rate with a margin linked to three key performance indicators (KPIs) based on environmental, social, and governance (ESG) targets: the reduction of scrap tire processing waste, the increase in the number of suppliers with an external audit of compliance with ESG criteria, and the increase of the percentage of trained employees in ESG issues at Prometeon Tyre Group. The proceeds were to be used by the borrower for the refinancing of existing indebtedness and general corporate purposes, including new investments. Record ID#108139 captures ABC Luxembourg's contribution. Record ID#110307 captures CCB Europe's contribution. In addition to the two Chinese state-owned banks, the following lenders contributed to the loan syndicate: the Milan and London Branchs of ING Bank N.V., Natixis, Bank of America Europe DAC, Arab Banking Corporation S.A. and Barclays Bank Ireland PLC.