ICBC (Europe) Poland Branch contributes to the zł1.34 billion PLN term loan of a zł1.59 billion PLN syndicated loan to CIECH for refinancing and general corporate purposes

Project narrative

On October 29, 2015, a syndicate of seven banks — including the Poland Branch of Industrial and Commercial Bank of China (Europe) S.A (ICBC (Europe)) — entered into a zł1,590,000,000 PLN syndicated facilities agreement with CIECH S.A. — a Polish chemical company producing sodium carbonate and bicarbonate headquartered in Warsaw listed on the Warsaw Stock Exchange — for refinancing and general corporate purposes. These facilities were divided into two tranches: a zł1,340,000,000 PLN syndicated term loan available for drawdown in Polish złoty and euros and a zł250,000,000 PLN revolving credit facility (RCF). The facilities carried an interest rate based on WIBOR / EURIBOR base rate plus a margin dependent on the level of the net debt index to earnings before interest, taxes, depreciation, and amortization (EBITDA), with an initial value of 1.5%. The facilities carried a maturity period of five years, with the term loan having a repayment schedule where 14.93% of the principal was due on December 30, 2018, 2019, and 2020 before final maturity, and the working capital borrowings due at the lapse of the interest period for a given loan amount, with mechanism of automatic revolving of the used amount for subsequent interest periods. CIECH Soda Polska S.A., CIECH Sarzyna S.A., and CIECH Soda Deutschland GmbH & Co.KG — all subsidiaries of CIECH S.A. — served as guarantors. 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 Sp. z o.o. sp.k., Cerium Sp. z o.o. S.K.A., SDC GmbH, Sodawerk Holding Staßfurt GmbH, and Sodawerk Staßfurt Verwaltungs-GmbH — all subsidiaries of CIECH S.A. — served as temporary guarantors. On November 27, 2015, KWG-Kraftwerksgesellschaft Staßfurt mbH (later named CIECH Energy Deutschland GmbH) joined as a guarantor. On February 26, 2016, CIECH Soda Romania S.A. joined as a guarantor. The guarantees were valued at 125% of the maximum involvement of each creditor. The facilities were secured by (i.e. collateralized against) a mortgage established on the property of some subsidiaries of CIECH S.A.; pledges (register and financial pledges in relation to the companies seated in Poland and the corresponding securities in Germany and Romania), on the shares, stock or rights of shareholders in partnerships, guarantors, temporary guarantors, and successive guarantors; registered pledges on property and other assets of CIECH S.A., guarantors and temporary guarantors seated in Poland; financial pledges on the rights to the means deposited on the bank accounts of CIECH S.A., guarantors, temporary guarantors, and successive guarantors (including securities corresponding to financial pledges in Germany and Romania); assignments of rights resulting from insurance policies issued in relation to the assets being the subject of securities as well as assignments relating to the loans granted within the group or credit instruments of different type as well as significant commercial contracts of CIECH S.A. and the selected guarantors and temporary guarantors; statement of submission to enforcement proceedings of CIECH S.A., guarantors and temporary guarantors seated in Poland; and power of attorney to the bank accounts of CIECH S.A., guarantors and temporary guarantors seated in Poland. Powszechna Kasa Oszczędności Bank Polski S.A. served as security agent. CIECH and the guarantors were also obligated to abide by the limitations in the agreement relating to disposal of assets, refrain from paying a dividend in the case of exceeding the financial index specified in the agreement, and refrain from taking out loans or granting loans in the case of exceeding the financial index specified in the agreement. The proceeds of the zł1.34 billion PLN term loan were used by the borrower to refinance debt from the issuance of €245 million EUR of hedged senior bonds by its subsidiary Ciech Group Financing AB (publ); to refinance the debt from an existing RCF with a value of zł100,000,000 PLN; to refinance the borrower's debt from various other credits; to finance the refinancing costs; and for the general corporate aims of the borrower. The borrower fully drew down the term loan on November 25, 2015 for zł1,045,031,000 PLN and €69,673,000 EUR. The proceeds of the zł250 million PLN RCF were to be used by the borrower for its general corporate aims and the working capital, excluding acquisitions and prepayment of the term loan. As of December 31, 2016, the RCF was unused. As of December 31, 2017, the RCF was unused. The lenders, including ICBC (Europe), appeared to have contributed to each tranche. Record ID#108590 captures ICBC (Europe)'s contribution to the zł1.34 billion PLN term loan. Record ID#108591 captures ICBC (Europe)'s contribution to the z250 million PLN RCF. In addition to ICBC (Europe), the following lenders contributed to the loan syndicate: Bank Handlowy Warszawie S.A. (BHW), Bank Millennium S.A., Bank Zachodni WBK S.A., Credit Agricole Bank Polska S.A.,HSBC Bank Polska S.A., and Powszechna Kasa Oszczędności Bank Polski S.A. (PKOP). All lenders served as mandated lead arrangers, while BHW served as facility agent and PKOP served as security agent. On January 9, 2018, the lenders entered an amendment agreement for the facilities agreement. As of December 31, 2018, the term loan had zł1,212,520,000 PLN and €30,000,000 EUR outstanding, while the RCF was fully drawn at zł250,000,000 PLN. Then, on March 16, 2021, a syndicate of 11 banks — including the Poland Branch of ICBC (Europe) — entered into a zł2,115,000,000 PLN syndicated facilities agreement with CIECH S.A., CIECH Soda Polska SA, CIECH Sarzyna SA, CIECH Soda Deutschland GmbH & Co. KG, CIECH Energy Deutschland GmbH, and CIECH Salz Deutschland GmbH for refinancing and general corporate purposes. These facilities were divided into three tranches: a zł560,000,000 PLN amortized term loan A available for drawdown in Polish złoty and euros; a zł1,305,000,000 PLN non-amortized term loan B available for drawdown in Polish złoty and euros; and a zł250,000,000 PLN revolving credit facility (RCF). The facilities carried an interest rate based on WIBOR / EURIBOR base rate plus a margin dependent on the level of the net debt index to earnings before interest, taxes, depreciation, and amortization (EBITDA). The facilities carried a maturity period of five years. Term A would have its first repayment date begin on June 30, 2023, with semi-annual repayments until maturity (a grace period of two years). The term loans would be available for drawdown for six months and the RCF would be available until one month before maturity. CIECH was the borrower for the term loans, while CIECH, CIECH Soda Polska SA, CIECH Sarzyna SA, CIECH Soda Deutschland GmbH & Co. KG, CIECH Energy Deutschland GmbH, and CIECH Salz Deutschland GmbH were borrowers of the RCF. CIECH S.A., CIECH Soda Polska SA, CIECH Sarzyna SA, CIECH Soda Deutschland GmbH & Co. KG, CIECH Energy Deutschland GmbH, and CIECH Salz Deutschland GmbH served as guarantors. The facilities included a financial covenant that the borrower's net debt to operating profit plus depreciation and amortization (EBITDA) ratio could not exceed 4.0x. The facilities were secured by (i.e. collateralized against) a registered pledge on a set of movable assets and property rights of variable composition constituting CIECH S.A.'s enterprise; registered and financial pledges on shares (stocks) of selected subsidiaries of CIECH S.A.; financial pledges on funds in bank accounts maintained for CIECH and its selected subsidiaries; pledges (collateral) established on shares (stocks, other participation titles) and bank accounts of selected subsidiaries of CIECH S.A., which will be governed by foreign law; and notarial declarations on submission to enforcement submitted by CIECH S.A. and its selected subsidiaries. The proceeds were used by the borrower to refinance the current financial indebtedness of CIECH S.A.’s capital group, financing refinancing costs, and financing general corporate purposes of CIECH and selected subsidiaries of CIECH. The refinanced debt covered approximately zł2,108,000,000 PLN consisting of zł507,000,000 PLN of bilateral loans from April 18, 2019 and the zł1.601 billion PLN that originated on October 29, 2015. The term loans were draw down on May 5, 2021 to refinance that debt. The RCF would used to finance refinancing costs, interest on refinanced debt, and general corporate purposes of the borrowers. All the lenders appeared to contribute to each facility. Record ID#108595 captures ICBC (Europe)'s contribution to the zł560,000,000 PLN amortized term loan A. Record ID#108596 captures ICBC (Europe)'s contribution to the zł1,305,000,000 PLN non-amortized term loan B. Record ID#108597 captures ICBC (Europe)'s contribution to the zł250,000,000 PLN RCF. In addition to ICBC (Europe), the following lenders contributed to the loan syndicate: Powszechna Kasa Oszczędności Bank Polski S.A., mBank S.A., BNP Paribas Bank Polska S.A., Bank Polska Kasa Opieki S.A., Bank Millennium S.A., Credit Agricole Bank Polska S.A., Société Générale S.A. (SocGen), Bank Handlowy w Warszawie S.A. (BHW), Bank Ochrony Środowiska S.A., and the Poland Branch of Intesa Sanpaolo S.P.A. S.A. BNP Paribas Bank Polska served as agent. Powszechna Kasa Oszczędności Bank Polski S.A. served as security agent. As of the first half of 2022, the borrower had fully drawn down the zł560 million PLN term loan A with zł540,700,000 PLN and €4,231,000 EUR outstanding; it had fully drawn down the zł1.305 billion PLN term loan B, with zł1,260,100,000 PLN outstanding and €9,844,000 EUR outstanding; it had not drawn the zł250 million RCF.