Grupa Azoty Zaklady Azotowe Pulawy : Current Report No. 26/2016 Execution of annexes to credit facility agreements with PKO BP S.A.

Current Report No. 26/2016

Subject: Execution of annexes to credit facility agreements with PKO BP S.A.

Legal basis: Art. 17.1 of MAR - Inside information

Text of the report:
Further to Current Report No. 16/2015 of April 23rd 2015, the Management Board of Grupa Azoty Zakłady Azotowe Puławy S.A. ('Grupa Azoty Puławy', the 'Borrower') announces that on September 20th 2016 the Company, together with Grupa Azoty S.A. (its Parent − the 'Parent') and selected companies of the Parent's Group (the 'Borrowers', 'Group Companies') executed an annex to a multi-purpose credit facility agreement ('MPCF Agreement') with Powszechna Kasa Oszczędności Bank Polski S.A. (the 'Bank'). Under the annex:

• the facility limit was increased from PLN 237,000,000 to PLN 240,000,000;

• the final availability date was extended from September 30th 2016 to September 30th 2019;

• in addition to the PLN facility, a revolving credit facility denominated in EUR and USD was also made available;

• Grupa Azoty ATT Polymers GmbH, a subsidiary of the Parent, became party to the MPCF Agreement as a new borrower.

Under the MPCF Agreement, the Bank granted each Borrower a revolving facility, and Grupa Azoty ATT Polymers GmbH − a non-revolving facility, to finance the payment of obligations related to their business activities and payments under open documentary letters of credit and bank guarantees issued by the Bank.

The limit made available by the Bank may be used by the individual borrowers in the form of sub-limits established by the Parent. As at the date of the annex, 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 the Parent and Group Companies may not exceed the total facility amount.

The Bank's claims under the MPCF Agreement are secured by sureties granted under a surety agreement made on September 20th 2016 between the Bank and the Parent, with its key subsidiaries (Grupa Azoty Puławy, Grupa Azoty Zakłady Chemiczne Police S.A., and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A.) as surety providers. The sureties were granted for an aggregate amount of PLN 240,000,000. Each surety provider granted a surety covering the Parent's liabilities under the MPCF Agreement, with the proviso that the aggregate amount of those sureties does not exceed 120% of the limit amount, that is PLN 288,000,000 in aggregate, at any time during the facility availability period, irrespective of whether new entities become parties to the surety agreement. The share of each surety provider (including Grupa Azoty Puławy) in the aggregate surety amount specified above is one-third (1/3), therefore the amount of surety granted by each surety provider was set at up to PLN 96,000,000.

The surety providers' liability under the surety agreement is several but not joint.

As of its date, the surety agreement supersedes the previous surety agreement securing the Bank' claims under the MPCF Agreement of April 23rd 2015.

The surety expires upon expiry of the security term, which ends upon repayment of debt under the MPCF Agreement.

The sureties were provided on arm's length terms for good consideration. No other financial terms were defined for the surety.

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 MPCF 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 facility bears interest at an annual rate equal to the reference rate 1M WIBOR for the PLN denominated facility, 1M EURIBOR for the EUR denominated facility and 1M LIBOR for the USD denominated facility, plus the Bank's margin.

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

Further to Current Report No. 16/2015 of April 23rd 2015, the Management Board of Grupa Azoty Puławy also announces that on September 20th 2016 Grupa Azoty Puławy, together with its Parent and selected companies of the Parent's Group (as borrowers) executed with the Bank an annex to the overdraft facility agreement of October 1st 2010 ('Overdraft Agreement'). Under the annex, the facility limit was increased from PLN 302,000,000 to PLN 310,000,000 and the final availability date was extended from September 30th 2016 to September 30th 2019.

Moreover, starting from October 1st 2016, the Overdraft Agreement will be tied to actual cash pooling at the Bank, which will replace the virtual cash pooling agreement with the Bank, to be terminated as of October 1st 2016. In addition to interest income and expense optimisation available under the existing structure, the new solution will enable the companies of the Parent's Group to use the Group's global liquidity limit within the concurrent positive and negative balances in the Parent Group companies' current accounts used to finance their operations.

The limit made available by the Bank may be used by the individual borrowers in the form of sub-limits established by the Parent. As at the date of the annex, the sub-limit available to Grupa Azoty Puławy was set at PLN 0, and for its subsidiaries jointly at PLN 33,000,000. Sub-limit amounts are each time defined in an allocation instruction submitted by the Parent to the Bank. 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 the Parent and Group Companies may not exceed the total facility amount.

The Bank's claims under the Overdraft Agreement are secured by sureties granted under a surety agreement made on September 20th 2016 between the Bank and the Parent, with its subsidiaries (Grupa Azoty Puławy, Grupa Azoty Zakłady Chemiczne Police S.A., and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A.) as surety providers. The sureties were granted for an aggregate amount of PLN 310,000,000. Each surety provider granted a surety covering the Parent's liabilities under the Overdraft Agreement, with the proviso that the aggregate amount of those sureties does not exceed 120% of the limit amount, that is PLN 372,000,000 in aggregate, at any time during the facility availability period, irrespective of whether new entities become parties to the surety agreement. The share of each surety provider (including Grupa Azoty Puławy) in the aggregate surety amount specified above is one-third (1/3), therefore the amount of surety granted by each surety provider was set at up to PLN 124,000,000.

The surety providers' liability under the surety agreement is several but not joint.

As of its date, the surety agreement supersedes the previous surety agreement securing the Bank' claims under the Overdraft Agreement of April 23rd 2015.

The surety expires upon expiry of the security term, which ends upon repayment of debt under the Overdraft Agreement.

The sureties were provided on arm's length terms for good consideration. No other financial terms were defined for the surety.

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 is the 1M WIBOR 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: Article 17(1) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ EU of June 12th 2014, No. L 173/1, as amended).