Ciech S.A.

Capital/Financing Update • Mar 17, 2021

The Management Boardof CIECH S.A. with its registered office in Warsaw (the “Company”,“Issuer”), with reference to Current Report No. 36/2020 of28 December 2020 on the commencement of negotiations on the conclusionof the new facilities agreement, herewith informs that following thenegotiations, on 16 March 2021, a facilities agreement was concludedbetween, among others, the Issuer (as the borrower and guarantor), itsselected subsidiaries: CIECH Soda Polska S.A., CIECH Sarzyna S.A., CIECHSoda Deutschland GmbH & Co. KG, CIECH Energy Deutschland GmbH and CIECHSalz Deutschland GmbH (as borrowers and guarantors), BNP Paribas BankPolska S.A (as the agent), Powszechna Kasa Oszczędności Bank Polski S.A.(as the security agent) and the following banks: Powszechna KasaOszczędności Bank Polski S.A., mBank S.A., BNP Paribas Bank Polska S.A.,Industrial and Commercial Bank of China (Europe) S.A. Branch in Poland,Bank Polska Kasa Opieki S.A., Bank Millennium S.A., Credit Agricole BankPolska S.A.,SociétéGénéraleS.A.,Bank Handlowy w Warszawie S.A., Bank Ochrony Środowiska S.A. and IntesaSanpaolo S.P.A. S.A. Branch in Poland (as lenders) (the “Lenders”)(the “Facilities Agreement”).

The FacilitiesAgreement provides for the extension of loans in PLN and EUR, up to atotal amount (expressed in PLN) of PLN 2,115.000,000.

The FacilitiesAgreement provides for the extension of the following loans:

1.      amortisedA term loan (to be repaid in instalments), in tranches in PLN and EUR,up to a total maximum amount (expressed in PLN) of PLN 560,000,000,

2.      non-amortisedB term loan (to be repaid on the final repayment date), in tranches inPLN and EUR, up to a total maximum amount (expressed in PLN) of PLN1,305,000,000,

3.      revolvingcredit facility in PLN, up to a total maximum amount of PLN 250,000,000,

(collectively as “Loans”).

The term loans willbe extended to the Company, and the revolving credit facility will bemade available to the Company and selected subsidiaries of the Company.

The Loans are madeavailable in order to refinance the current financial debt of theCompany’s group (the “Refinanced Debt”), to financethe refinancing expenses and to finance the general corporate objectivesof the Company and its selected subsidiaries. The Refinanced Debtincludes loans with a total value of approx. PLN 2,108,000,000 (valueexpressed in PLN, converted according to the average NBP exchange rateof 16 March 2021, granted in the form of: (a) bilateral loans extendedon the basis of loan agreements of 18.04.2019, with a total value of PLN507,000,000, the conclusion of which was announced by the Company in itsCurrent Report No. 13/2019 of 18.04.2019, (b) syndicated loans with atotal value of PLN 1,601,000,000, extended under a loan agreement of29.10.2015, the conclusion of which was announced by the Company in itsCurrent Report No. 38/2015 of 30.10.2015, as amended by the annex dated9.01.2018, the execution of which was disclosed by the Company in itsCurrent Report No. 1/2018 of 9.01.2018. 

The interest rate onthe Loans is variable, determined on the basis of the WIBOR/EURIBOR baserate plus a margin, the level of which depends on the level of the netdebt to operating profit ratio increased by depreciation (EBITDA), insuch a manner that should the ratio be lower, the applied margin willalso be lower. The financial conditions of the Facilities Agreement donot differ from those commonly applied for this type of agreements.

Themaximum level of the net debt to operating result increased bydepreciation (EBITDA), as defined in the Facilities Agreement, is 4,0 x.

The final repaymentdate of the Facilities Agreement falls on the fifth anniversary of theconclusion of the Facilities Agreement, however, not later than 31 March2026. The amortised A term loan will be repaid on a semi-annual basis,starting from 30 June 2023.

Together with theFacilities Agreement, the Company and its selected subsidiaries enteredinto documents related to the Facilities Agreement, in particular: (i)an intercreditor agreement, (ii) fee letters relating to the arrangementfee for the agent and the security agent, payable in connection with theconclusion of the Facilities Agreement, (iii) annexes to separateoverdraft agreements: with Bank Millennium S.A. and Bank Polska KasaOpieki S.A., (iv) an agreement amending the existing surety agreement infavour of Bank Millennium S.A. and (v) a new surety agreement with BankPolska Kasa Opieki S.A. – the above annexes and agreements in order toadjust the aforementioned overdraft agreements and sureties to the termsand conditions of the Facilities Agreement.

The FacilitiesAgreement provides for the conclusion of hedging agreements with theLenders or their respective subsidiaries, as protection againstfluctuation of interest and exchange rates.

The period duringwhich the Loans may be extended (paid out) is: for term loans – sixmonths from the date of the Facilities Agreement, and for the revolvingcredit facility – the period ending 1 month prior to the final repaymentdate.

The Loans will bedisbursed to the Company provided that certain conditions precedent aremet, as a standard in such transactions, among others, providing Lenderswith standard documents and certificates, excerpts from registers, legalopinions, and the conclusion of security (collateral) documents andagreements.

The FacilitiesAgreement provides for collateral to be established by the Company andits selected subsidiaries, as security for the repayment of the Loansgranted on its basis. In particular, such collateral will include (1) aregistered pledge on the set of properties and rights with variablecomposition, being part of the Company’s enterprise, (2) registered andfinancial pledges on shares (stocks) of selected subsidiaries of theCompany, (3) financial pledges on monetary assets accumulated in bankaccounts held for the Company and its selected subsidiaries, (4) pledges(security) established on shares (stocks, other participation titles)and bank accounts of selected subsidiaries of the Company, which will begoverned by foreign law, and (5 ) notarial statements on submission toenforcement made by the Company and its selected subsidiaries.

Legal basis: Article17.1 of the Regulation of the European Parliament and of the Council(EU) No 596/2014 of 16 April 2014 on Market Abuse (the Market AbuseRegulation) and repealing Directive 2003/6/EC of the European Parliamentand of the Council and Commission Directives 2003/124/EC, 2003/125/ECand 2004/72/EC (Official Journal of the European Union L No 173, p. 1).