Press releases

Ciech Chemical Group signed an agreement with a consortium of seven banks concerning consolidation and refinancing of its debt accounting for PLN 1.3 billion. The agreement ensures stabilisation of the financing of the Group and continuation of the processes of improving its competitive position.

The loan agreement provides a comprehensive solution covering 14 largest national subsidiaries and the Romanian US Govora. The agreement does not apply to the German part of the Group focused around Soda Deutschland Ciech, the financing of which was guaranteed by another  agreement as early as in January 2010.

– Due to the agreement, we organise the financing structure, ensure funds for the development of the Group and reduce the number of banks providing services for the Group – said Ryszard Kunicki, president of Ciech SA.

The consortium of seven Banks organising the agreement include: Bank Polska Kasa Opieki SA, Bank Handlowy w Warszawie SA, BRE Bank SA, Powszechna Kasa Oszczędności Bank Polski SA, ING Bank Śląski SA, Bank Millennium SA and DNB Nord Polska SA. At the same time, the Group’s partners are still Polish branches of BNP Paribas SA, Credit Agricole Corporate and Investment Bank SA, Fortis Bank Polska SA and the German Commerzbank AG.

The agreement enables refinancing of the debt and consolidation of the loans taken out by the Group’s companies. The agreement also provides for a change of option obligations accrued as a result of a negative evaluation of the collateral transactions concluded by the company into a loan. In accordance with the terms and condition of the agreement, the financing will be made available to the Group in four tranches. The agreement concerns approximately 70 percent of the debt of the Ciech Group, i.e. the amount of PLN 1.3 billion. The remainder of the Group’s debt not included in the said agreement accounts for PLN 0.5 billion, including liabilities of the German part of the Group accounting for EUR 55 million (approximately PLN 213 million) and bonds worth PLN 300 million.

In addition to consolidation and refinancing of the debt, the agreement also provides the Group with a credit line for on-going operation. The agreement creates a platform ensuring the financing of the operating and investment needs of the Group until the end of December 2011. It enables reconstruction of the financing structure.

The agreement provides for, among others, debt reduction by PN 400 million until the end of March 2011. The provisions of the loan agreement do not impose specific ways of accomplishment of the said goal on the Company and enable the Management Board to decide on methods of acquisition of funds. The possible financing sources include, among others, proceeds from on-going operating activities, sale of assets, increase in the capital and issue of shares convertible to bonds.

– Such terms and conditions are not only an optimal solutions taking into account the complexity of the refinancing process, but also show the conviction of the partners of the agreement that the Management Board’s plans regarding debt reduction are real – said Ryszard Kunicki.

Along with the loan agreement, the contract on maintenance of the status quo concerning the financing of the Group was prolonged to April 30th. It will allow fulfilling the formal requirements.