Narrative
Full Description
Project narrative
On June 27, 2008, a syndicate of banks entered into a $1,125,000,000 USD syndicated term loan facility agreement with Grupa LOTOS S.A. — a Poland-incorporated vertically integrated oil company based in Gdańsk listed on the Warsaw Stock Exchange with the State Treasury of the Republic of Poland as majority shareholder — for the 10+ Programme Project. The loan consisted of a $975,000,000 USD term loan and $150,000,000 USD term loan and was part of a wider $1,750,000,000 USD facility (featuring a $200,000,000 USD redrawable working capital loan facility and a $425,000,000 USD investment loan guaranteed facility). The loan consisted of a maturity period of 12.5 years after the first interest payment date (a final maturity date of January 15, 2021) and regular repayments. The loan carried an interest rate based on one-month, three-month, or six-month LIBOR (depending on the interest period selected at the given time) plus a margin. The loan was secured by (i.e. collateralized) a mortgage with the highest ranking over Grupa LOTOS S.A.’s ownership title or perpetual usufruct right to the real property required for the conduct of operations by the existing and expanded Gdańsk refinery; an agreement creating a registered pledge over sets of existing and future (acquired over the period of implementation of the 10+ Programme) movables, owned by Grupa LOTOS S.A. and forming a part of or closely related with the Gdańsk refinery or financed under the aforementioned credit facility, used in production, storage and distribution of petroleum products and crude oil, along with the infrastructure and necessary auxiliary equipment, and on the movables comprising the basic production installations, auxiliary production installations, equipment used to blend products, loading facilities, transport pipelines, storage tanks, CHP plants, wastewater treatment plants, water intakes, and water, electricity, process steam and compressed air systems; an agreement creating financial and registered pledges over Grupa LOTOS S.A.’s claims under bank account agreements executed in connection with the financing of the 10+ Programme; agreements for the assignment of the rights and debt claims of Grupa LOTOS S.A. arising under the agreements related to the implementation of the 10+ Programme, the agreements for the management of the 10+ Programme, hedging agreements, license agreements, insurance documents (related to the Gdańsk refinery and the 10+ Programme) as well as under sales contracts concluded by Grupa LOTOS S.A. with its subsidiaries, if the contracts’ annual value exceeds zł10,000,000. The Polish Branch of Société Générale S.A. (SocGen) served as security agent. The proceeds were to be used by the borrower to finance the implementation of the 10+ Programme and the working capital. The 10+ Programme (also known as P10+) was an enterprise and organizational investment program of Grupa LOTOS that began in the late 2000s and concluded in 2011 that was supported by the Government of Poland that specifically sought to expand LOTOS's processing capacities from 6 million to 10.5 million tons, primarily via the installations of hydrocracking (MHC) and solvent deasphalting (ROSE) units. As of December 31, 2017, $503.3 million USD (zł1.7565 billion PLN) was outstanding under the loan, with $117.5 million USD (zł410.2 million PLN) due on October 15, 2018. Then, in 2018, the Poland Branch of the Industrial and Commercial Bank of China (Europe) S.A. (ICBC (Europe)) joined the loan syndicate for the loan to Grupa LOTOS. Record ID#109102 captures ICBC (Europe)'s contribution. As of December 31, 2018, $377.7 million USD (zł1.4236 billion PLN) was outstanding under the loan, with $126.5 million USD (zł476.8 million PLN) due on October 15, 2019. Then, on July 2, 2019, a syndicate of eight banks — including ICBC (Europe) — entered into a $500 million USD syndicated loan facilities agreement with Grupa LOTOS S.A. for the 10+ Programme Refinancing Project. The facilities consisted of a $400 million USD (zł1.5 billion PLN) term loan tranche and a $100 million USD (zł376 million PLN) working capital loan. The working capital loan was available for drawdown in with drawdown available in United States dollars, euros, or Polish złoty. The loan carried a maturity period of five years from disbursement (a final maturity date of July 15, 2024) and an interest rate based on 1 month, 3 month, or 6 month (depending on interest period chosen) LIBOR (or EURIBOR or WIBOR, if in those currencies) plus a margin. The facilities were unsecured, but Grupa LOTOS agreed to the representation on submission to enforcement in favor of the lenders made under Article 777.1.5 of the Civil Procedure Code. The proceeds were used by the borrower to refinance the outstanding balance of the $1.75 billion USD credit facility agreements signed in June 2008 and maturing in 2021 that were incurred to finance the 10+ Programme, allowing it to release security created over Grupa LOTOS S.A.’s assets those loans, namely property, plant and equipment of the Gdańsk refinery and Grupa LOTOS’ cash flows. The proceeds were also to be used by the borrower for general business purposes. The credit facility was disbursed and successfully repaid the 10+ facility on July 15, 2019. Each lender reportedly contributed $50.00 million USD to the $400 million USD term loan tranche and $12.50 million USD to the $100 million USD revolver tranche. Record ID#109095 captures ICBC (Europe)'s contribution to the $400 million USD term loan tranche. Record ID#109096 captures ICBC (Europe)'s contribution to the $100 million USD revolver tranche. In addition to ICBC (Europe), the following lenders contributed to the loan syndicate: ING Bank Śląski S.A., Bank PEKAO S.A., PKO Bank Polski S.A., SMBC Bank EU AG, Intesa Sanpaolo S.p.A., Caixabank S.A. (Spółka Akcyjna), and Erste Group Bank AG. Bank PEKAO served as agent, bookrunner, and arranger. ING Bank Śląski served as coordinator and documentation bank. As of December 31, 2019, $405.7 million USD (zł1.5406 billion PLN) was outstanding. As of December 31, 2020, $319.9 million USD (zł1.202 billion PLN) was outstanding under the term loan, while $51.9 million USD (zł195.2 million PLN) and €5.8 million EUR (zł27.0 million PLN) was outstanding under the working capital facility. As of December 31, 2021, $239.2 million USD (zł971.3 million PLN) was outstanding under the term loan.