ICBC (Europe) Poland Branch contributes to a €175.404 million EUR syndicated loan for purposes associated with the Galeria Północna shopping mall

Project narrative

On August 17, 2015, Bank Polska Kasa Opieki S.A. entered into two credit facilities — a €116,000,000 EUR construction loan facility and a €150,000,000 EUR investment loan facility — with Centrum Światowida Sp. z o.o. — a Poland-incorporated special purpose vehicle (SPV) and wholly-owned subsidiary of Globe Trade Centre S.A., an international real estate developer and investor based in Warsaw, Poland and listed on the Warsaw Stock Exchange with an inward listing on Johannesburg Stock Exchange, but at the time had Netherlands-incorporated GTC Dutch Holdings B.V. as the majority shareholder (61.49% of the share capital), a wholly-owned subsidiary of Hungary-incorporated GTC Holding Zártkörüen Müködö Részvénytársaság (GTC Holding Zrt), itself fully owned by Optimum Ventures Private Equity Fund which are managed by Hungarian investor Optima Investment Fund Management Zrt. part of Optima Befektetési Zrt. (Optima Investment Ltd) created by Pallas Athéné Domus Meriti Foundation (PADME), a foundation created by the Magyar Nemzeti Bank (central bank of Hungary) — to finance the Galeria Północna Construction Project. The facilities carried a maturity period of seven years from drawdown, an interest rate of 3-month EURIBOR plus a margin, and repayment profile of quarterly installments with a balloon repayment of the last principal at maturity date. The facilities were secured by (i.e. collateralized against) a mortgage over Galeria Północna, a registered pledge over the shares in Centrum Światowida, the registered pledge over Centrum Światowida’s bank accounts, and the assignment of receivables, rights under insurance policies and rights under claims against the general contractor. The proceeds were used to finance and refinance project costs of the construction of the Galeria Północna shopping mall in the Białołęka district of Warsaw. It included over 200 shops, boutiques, and service outlets over 64,000 square meters of space. The mall opened in September 2017. On December 6, 2017, Bank Polska entered into an amendment to up-size the investment loan facility to €200,000,000 EUR. Due to the COVID-19 pandemic, the book value of GTC's properties, including Galeria Północna, declined, leading to certain financial covenants being breached. Specifically, the €188.7 million EUR loan from Bank Polska had its loan-to-value and debt service coverage ratios as of June 30, 2020 not met. The borrower began negotiations to obtained a waiver. Then, on September 17, 2020, it was announced that Centrum Światowida sp. z o.o had entered into an annex to the loan agreement with Polska Kasa Opieki S.A. and Industrial and Commercial Bank of China (Europe) S.A. acting through Industrial and Commercial Bank of China (Europe) S.A. Poland Branch for the remaining €175.404 million EUR balance; the lenders to relax the debt service coverage ratio covenant for 18 months and curse the loan-to-value covenant breach in exchange for a prepayment of €9.5 million EUR within 10 business days and a prepayment of up to €3.0 million EUR within 12 months. ICBC had joined the loan by this point, though it unclear whether it joined in the amendment or proceeding it. Then, on June 30, 2021, the borrower repaid the full €174,153,846 EUR outstanding amount of the credit facilities.