Current Report No. 16/2015 - Execution of credit facility agreements with PKO BP S.A.

Text: Further to current report No. 25/2015 of Grupa Azoty S.A. (the parent of Grupa Azoty Zakłady Azotowe PUŁAWY S.A., the 'Parent'), dated April 23rd 2015, the Management Board of Grupa Azoty Zakłady Azotowe Puławy S.A. ('Grupa Azoty PUŁAWY') announces that on April 23rd 2015 Grupa Azoty PUŁAWY together with its Parent and other key companies of the Parent's Group: Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. and Grupa Azoty Zakłady Chemiczne Police S.A., executed a PLN 237,000,000 multi-purpose credit facility agreement (the 'MPCF Agreement') with Powszechna Kasa Oszczędności Bank Polski S.A. (the 'Bank').

Under the MPCF Agreement, amendments were made to the existing multi-purpose credit facility agreements whereby the multi-purpose credit facility agreements of the Parent, Grupa Azoty Zakłady Chemiczne Police S.A., Grupa Azoty PUŁAWY and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. were technically consolidated into a single agreement under which the Bank continues to act as the lender, and Grupa Azoty Puławy, the Parent, Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. and Grupa Azoty Zakłady Chemiczne Police S.A. act as the borrowers.

Under the MPCF Agreement, the Bank granted each borrower a working capital revolving facility in an unchanged amount to finance the payment of obligations related to their business activities and payments under opened letters of credit and bank guarantees issued by the Bank.

The facility was granted by the Bank for a period from the agreement date until September 30th 2016 (no change relative to the multi-purpose credit facility agreements that were consolidated) and is available to the individual borrowers in the form of sub-limits defined by the Parent (the 'sub-limits'). For the MPCF Agreement date, the sub-limit available to Grupa Azoty PUŁAWY was set at PLN 30,000,000. At the Parent's request, the allocation of sub-limits between the individual borrowers may be changed from time to time during the facility term, provided that the aggregate amount of all sub-limits drawn at any time by all the borrowers may not exceed the total facility amount.

The Bank's claims under the MPCF Agreement are secured with sureties provided by each of the Parent's key subsidiaries (Grupa Azoty PUŁAWY, Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. and Grupa Azoty Zakłady Chemiczne Police S.A.) in respect of the Parent's liabilities arising under the MPCF Agreement and covered by the surety agreement. The total amount of the sureties will not exceed 120% of the total facility amount (at any time during the facility term, regardless of whether any new parties accede to the surety agreement). Grupa Azoty PUŁAWY will be responsible for one-third of the total surety amount referred to above.

Furthermore, upon provision of the surety, the existing security over Grupa Azoty PUŁAWY's assets will be released.

The Parent is liable for repayment of all amounts due under the MPCF Agreement, and Grupa Azoty PUŁAWY is liable for repayment of the amounts due under the facility which were drawn under the sub-limit made available to it.

The Agreement also includes provisions which impose certain restrictions on the Parent and surety providers, including Grupa Azoty PUŁAWY, concerning disposal of their material assets and encumbering of such assets, provision of loans and guarantees, payment of dividends and incurring of financial liabilities.

The annual interest rate equals the reference rate plus the Bank's margin.

The other terms of the MPCF Agreement do not differ from standard terms used in agreements of such type.

Furthermore, on April 23rd 2015, Grupa Azoty PUŁAWY together with its Parent and certain other companies of the Parent's Group (as borrowers) and the Bank executed an annex to the overdraft facility agreement of October 1st 2010 (the 'Overdraft Agreement'), to which Grupa Azoty Puławy and its subsidiary REMZAP Sp. z o.o. acceded on August 19th 2013, upon joining the Parent's Group. The overdraft facility limit made available by the Bank to the borrowers is PLN 302,000,000.

The Overdraft Agreement is connected with a notional cash pooling structure which enables additional optimisation of interest income and expense based on current account credit and debit balances occurring simultaneously in connection with financing of the Parent's Group companies.

The facility was granted by the Bank for a period from the agreement date until September 30th 2016 (no change relative to the original facility term) and is available to the individual borrowers in the form of sub-limits defined by the Parent (the 'sub-limits). For the annex date, the sub-limit available to Grupa Azoty PUŁAWY was set at PLN 10,000,000, and to its subsidiary REMZAP Sp z o.o. − at PLN 2,000,000. At the Parent's request, the allocation of sub-limits between the individual borrowers may be changed from time to time during the facility term, provided that the aggregate amount of all sub-limits may not exceed the total facility amount.

Under the annex to the Overdraft Agreement, the following companies of the Grupa Azoty PUŁAWY Group were included as borrowers: PROZAP Sp. z o.o., Gdańskie Zakłady Nawozów Fosforowych FOSFORY Sp. z o.o., AGROCHEM PUŁAWY Sp. z o.o. , AGROCHEM Sp. z o.o., Zakłady Azotowe CHORZÓW S.A. and Unibaltic Agro Sp. z o.o.

The Bank's claims under the Overdraft Agreement are secured with sureties provided by each of the Parent's key subsidiaries (Grupa Azoty PUŁAWY, Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. and Grupa Azoty Zakłady Chemiczne Police S.A.) in respect of the Parent's liabilities arising under the Overdraft Agreement and covered by the surety agreement. The total amount of the sureties will not exceed 120% of the total facility amount (at any time during the facility term, regardless of whether any new parties accede to the surety agreement). Grupa Azoty PUŁAWY will be responsible for one-third of the total surety amount referred to above.

Furthermore, upon provision of the surety, the existing security over Grupa Azoty PUŁAWY's assets will be released.

The Parent is liable for repayment of all amounts due under the Overdraft Agreement, and Grupa Azoty PUŁAWY is liable for repayment of the amounts due under the facility which were drawn under the sub-limit made available to it.

The Overdraft Agreement also includes provisions which impose certain restrictions on the Parent and surety providers, including Grupa Azoty PUŁAWY, concerning disposal of their material assets and encumbering of such assets, provision of loans and guarantees, payment of dividends and incurring of financial liabilities.

The annual interest rate equals the reference rate plus the Bank's margin.

The other terms of the Overdraft Agreement do not differ from standard terms used in agreements of such type.

Legal basis: Art. 56.1.1 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz. U. of 2013, item 1382).

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