Wysogotowo, August 2nd 2015 Current Report No. 26/2015

Transcription

1 Wysogotowo, August 2nd 2015 Current Report No. 26/2015 Subject: Execution of restructuring documents with Financial Creditors The Management Board of PBG S.A. w upadłości układowej (in company voluntary arrangement) (the Company, PBG ) announces that on July 31st and August 1st 2015 the Company and certain Arrangement Creditors holding Group 5 and Group 6 claims ( Financial Creditors ) executed agreements setting out the terms of restructuring of the Company s liabilities filed by the Financial Creditors in the course of the bankruptcy proceedings pending before the District Court for Poznań-Stare Miasto of Poznań, 11th Commercial Insolvency and Arrangement Division, court docket No. XI GUp 29/12 ( Arrangement ). One of the objectives of the agreements is to implement the Company s arrangement proposals of April 28th 2015 ( Arrangement Proposals ). The executed documents include in particular two key agreements, i.e. the Restructuring Agreement and the Issue and Agency Agreement, as well as a set of related documents. The documents define the terms of restructuring negotiated by the Company and its largest arrangement creditors since September 2013 (relevant information was published by the Company in Current Report No. 24/2013 of September 3rd 2013, and then referred to in Current Report No. 29/2013 of September 30th 2013, Current Report No. 7/2015 of April 13th 2015 and Current Report No. 9/2015 of April 20th 2015). The main objective of the agreements is to implement the Arrangement once it is approved by the Meeting of Creditors, convened by the Judge-Commissioner to be held on August 3rd 5th During the Meeting, creditors will vote on the Arrangement Proposals whereby PBG proposes payment from 8% to 21% of the value of the arrangement claims in instalments, in accordance with a payment schedule (i.e. from December 31st 2015 to June 30th 2020), and partial conversion of the arrangement claims into new PBG shares. The Company will also provide security for the arrangement claims in the form of pledges on shares of RAFAKO S.A. ( RAFAKO ), held directly and indirectly by PBG (see Current Report No. 13/2015 of April 29th 2015).

2 The Company expects that the key funding sources for the Arrangement will include: timeoptimised proceeds from divestment of non-core assets of the Company and PGB Group companies (the Divestment Plan), estimated to reach approximately PLN 400m over the entire term of the Arrangement (some of the expected proceeds have already been received), and profits from core business. I. Overview of the executed documents 1) Restructuring Agreement ( RA ): The RA sets out the framework for the Company s operations in the period until the court s decision to approve the Arrangement becomes final, and the timeline of actions that need to be taken to allow the Financial Creditors-signatories of the RA to vote in favour of the Arrangement; a. Parties: i. the Company; ii. PBG Oil and Gas Sp. z o.o. ( POG ); iii. certain subsidiaries, i.e. PBG Dom Sp. z o.o. ( PBG Dom ), PBG Erigo Sp. z o.o. ( PBG Erigo ), PBG Erigo Projekt Sp. z o.o. Ecoria II S.K.A. ( Ecoria II ), PBG Dom Invest X Sp. z o.o. Invest I S.K.A. ( Invest I ), PBG Erigo Projekt Sp. z o.o. Strzeszyn S.K.A. ( Strzeszyn ), PBG Erigo Projekt Sp. z o.o. Platan Hotel S.K.A. ( Platan ), PBG Erigo Projekt Sp. z o.o. Malta Hotel S.K.A. ( Malta ), Ecoria Sp. z o.o. ( Ecoria ), Wschodni Invest Sp. z o.o. ( Wschodni Invest ) and PBG Dom Invest Limited, a company under Cypriot law ( Invest Ltd. ) (jointly Obligor Companies ); iv. Mr Jerzy Wiśniewski ( Main Shareholder ); v. Financial Creditors, i.e. Bank Polska Kasa Opieki S.A., Bank Zachodni WBK S.A., Powszechna Kasa Oszczędności Bank Polski S.A., ING Bank Śląski S.A., Bank Millennium S.A., DNB Bank Polska S.A., Raiffeisen Bank Polska S.A., FM 2 of 12

3 Bank PBP S.A., KBC Parasol BIZNES Specjalistyczny Fundusz Inwestycyjny Otwarty, KBC Parasol Fundusz Inwestycyjny Otwarty, KBC Portfel VIP Specjalistyczny Fundusz Inwestycyjny Otwarty (jointly Financial Creditors ); vi. Under the RA, other Financial Creditors may accede to the agreement by submitting a unilateral representation; b. Key covenants: i. Corporate governance: The Company and the Main Shareholder will implement a corporate governance framework that will allow the Financial Creditors to participate in supervision of the Company s business; the Main Shareholder will remain on the Management Board. On the day on which the decision to approve the Arrangement becomes final, candidates nominated by the Main Shareholder will be appointed to the Management Board, and candidates nominated by the Main Shareholder and the Financial Creditors under a separate agreement between the Financial Creditors will be appointed to the Supervisory Board; ii. Business and financing of the Company and POG: The Company and the Main Shareholder will enter into the Conditional POG Share Sale Agreement whereby the Company will become the sole shareholder in POG once the decision to approve the Arrangement becomes final. The price, i.e. PLN 10,500,000 for the shares in POG, will be funded with proceeds from a loan advanced to PBG by the Main Shareholder and repayable after full repayment of Bonds. The operations of the Company and POG will be financed with (among other sources) proceeds from disposal of some of the assets, on the terms agreed upon with the Financial Creditors. The key rules of using the divestment funds are presented in section 2.b.ii below; iii. Issue of Bonds to eligible creditors: 3 of 12

4 The Issue and Agency Agreement sets out the terms of issue of Bonds to be offered, in accordance with the Arrangement Proposals, to the Financial Creditors holding Group 1, Group 3, Group 4, Group 5 and Group 6 claims ( Eligible Creditors ) once the decision to approve the Arrangement becomes final. Bonds will be issued at nominal value equal to the amount of the Eligible Creditor s arrangement claims outstanding after their reduction and conversion in accordance with the Arrangement. They will be acquired as part of the Arrangement, and as a new non-arrangement liability of the Company Bonds will be redeemable on the terms and conditions agreed in the Bond Programme; iv. Bond security: The Company and the Obligor Companies will provide security for Bonds, also in the form of their assets. Relevant details are presented in item III.1 below; v. Management of RAFAKO shares and POG shares: The Company will transfer RAFAKO shares from a Cyprus-based company to PBG and will retain a controlling interest in RAFAKO. The Company will execute a RAFAKO Shares Lock-up Agreement (with respect to shares held both directly and indirectly by the Company) and will pledge RAFAKO shares as collateral for Bonds. The Company will remain the sole shareholder in POG and will pledge POG shares as collateral for Bonds; vi. Issue of shares to the Financial Creditors as part of the Conversion: As a result of conversion of claims covered by the Arrangement ( Conversion ), the Financial Creditors will acquire Series H shares representing in total approximately 75% of the Company s post- Conversion share capital. Series H shares should be converted into bookentry form and admitted to trading within 10 (ten) months after the date when the decision to approve the Arrangement becomes final; 4 of 12

5 c. Selected covenants of the Financial Creditors: i. The Financial Creditors-signatories of the Restructuring Agreement will vote in favour of the Arrangement provided that no negative circumstances specified in the Restructuring Agreement occur; ii. Under the Restructuring Agreement, the creditors will facilitate divestment of assets by the Company and the Obligor Companies by successively releasing Bond security interests; d. Selected covenants of the Main Shareholder: i. Execution of the Conditional POG Share Sale Agreement and a loan agreement to finance the transaction; ii. Participation in new financing of PBG operations during the term of the Arrangement, up to a total amount of PLN 28m, including the loan indicated in item i above; iii. Execution of the PBG Shares Lock-Up Agreement for the period full repayment of Bonds by the Company; e. Term of the RA: The RA came into force on July 31st 2015 and will remain effective until the date of allotment of the first series of Bonds or until the date of a final decision to change the form of the Company s bankruptcy proceedings. The decisions adopted by the Company s General Meeting on May 22nd 2015 and by the Extraordinary General Meeting on July 31st 2015 fulfil the Company s obligations agreed upon in the course of negotiations with the Financial Creditors and confirmed by the execution of the Restructuring Agreement. 2) Issue, Agency and Co-Financing Agreement ( IACA ) Under the IACA, the Company appointed the issue agent, the paying agent and the depositary ( Issue Agent ), as well as the mortgage administrator, the pledge administrator and the security agent for future claims under Bonds ( Security Agent ). The parties to the IACA intend for Bonds to be listed on the BondSpot ATS or WSE ATS. 5 of 12

6 a. Parties: i. the Company; ii. Obligor Companies; iii. Pekao Investment Banking S.A. as the Issue Agent ( Issue Agent ); iv. Bank Polska Kasa Opieki S.A. - as the Paying Agent, the Depositary and the Security Agent ( Security Agent ); b. Material provisions of the IACA: i. Issue of Bonds: The Company is obliged to take all actions required to issue Bonds and to ensure that the Company and Obligor Companies provide related security; ii. Co-financing: A mechanism was defined whereby the Company and POG may use up to PLN 151m of proceeds from the Divestment Plan for day-to-day and new financing; the mechanism also provides for the Main Shareholder s additional contribution to the financing of the Company and POG of up to PLN 28m; c. Term of the IACA: The agreement expires upon the lapse of the Programme term, i.e. on June 30th 2020, and expiry of all claims of the Obligor Companies under the Bond issue. II. Selected terms of the Bond Issue Programme ( Programme or Issue Programme ): 1) Purpose: to partially satisfy the arrangement claims of the Company s Eligible Creditors by setting off the claims up to the amount equal to the sum of repayments against the issue price of Bonds. Bonds will be offered in private placement (Art of the Bond Act) after the decision to approve the Arrangement becomes final. 2) Type of Bonds: Bonds will be zero-coupon bearer securities, issued as part of the Programme in Series A, B, C, D, E, F, G, H, I, and J. The number of Bonds will be no 6 of 12

7 higher than 7,100,000 (seven million one hundred thousand) for each series and in aggregate for the entire Programme; 3) Nominal value: During the term of the Programme, the total nominal value of Bonds will not exceed PLN 710,000,000.00; 4) Redemption and interest: Bonds will not bear any interest. The final redemption date for the last Series of Bonds is June 30th The Company may redeem the Bonds early; 5) Security: see section III.1 below. More information on the Issue Programme will be published upon fulfilment of the conditions for submission of Invitations to Acquire Bonds, i.e. once the decision to approve the Arrangement becomes final. III. In the performance of the restructuring documents, the following documents were executed on July 31st and August 1st 2015: 1) Bond security documents. The documents create the highest ranking priority collateral, up to the maximum secured amount of PLN 1,065,000, (150% of the maximum amount of the Programme). The security interests will remain effective from the Bond issue date until expiry of the Secured Claims. The security interests encumber assets owned by the Company and the Obligor Companies, and together they are considered a significant asset (criterion: consolidated revenue for four quarters). The unit value of some of the assets exceeds the equivalent of EUR 1m. Bonds will be secured with: registered pledges over Company s shares in its subsidiaries; pledges over the Company s and its subsidiaries assets; mortgages on most of the real properties owned by the Company and its subsidiaries; security assignments of receivables under a) insurance contracts in respect of properties encumbered with mortgages, (b) loan agreements executed 7 of 12

8 between the Company and its subsidiaries, (c) loan agreements executed between the Company and POG; (d) intra-group service agreements and subcontractor agreement under construction contracts concluded by POG and the Company; registered pledges over receivables from bank accounts of some of the Company s subsidiaries; Where a security interest has been agreed upon but not created as at the date of the Issue and Agency Agreement, such security interest will be created as a successive security interest when given assets become available to the Company and its subsidiaries as additional collateral. a. Registered pledges over shares in certificated form, pledged under agreements executed with the Security Agent: i. registered pledge over 500,000 shares in Invest I with a total book value of PLN 7,862, and a total par value of PLN 50, Pledgors: PBG Dom Invest X and PBG Erigo; ii. registered pledges over: 1,250,000 shares in Złotowska 51, 500,000 shares in Ecoria II, 500,000 shares in Strzeszyn, 500,000 shares in Malta, 8,900,000 shares in Platan and 500,000 shares in Quadro, with the aggregate book value of PLN 3,767, Pledgors: PBG Dom Invest X, PBG Erigo and PBG Erigo Projekt. The registered pledge agreements referred to above cover shares representing 100% of the share capital and total voting rights in the each of the companies. The companies whose shares have been pledged as collateral are special purpose vehicles used by the Group to execute real estate development projects; b. Registered pledges over shares in book-entry form, with the Security Agent as a Party to the relevant registered pledge agreements and the Creditors who will Bonds in response to Invitations to Acquire Bonds as Beneficiaries: 8 of 12

9 i. registered pledge agreement with respect to 7,665,999 RAFAKO shares (in book-entry form) owned by the Company. The par value of the shares is PLN 15,331,998.00, and they represent 11.01% of the share capital and total voting rights in RAFAKO; ii. registered pledge agreement with respect to 34,800,001 RAFAKO shares (in book-entry form) owned by a subsidiary Multaros Trading Company Limited. The par value of the shares is PLN 69,600,002.00, and they represent 50.00%+1 of the share capital and total voting rights in RAFAKO; The value of the shares covered by the pledge agreements, as disclosed in the Company s books, is PLN 551,223,382.19; c. Agreements on registered pledge over the following equity interests, with the Security Agent as a party thereto and the Creditors who will acquire the Bonds as Beneficiaries: i. 50 shares in POG held by the Company, with a book value of PLN 5, and a par value of PLN 5,000.00, representing 25% of the share capital and total voting rights; ii. 37,740 shares in Wschodni Invest held by the Company, with a book value of PLN 41,615, and a par value of PLN 3,774,000.00, representing 100% of the share capital and total voting rights; iii. 120,000 shares in PBG Erigo held by the PBG Dom Invest Ltd., with a book value of EUR 1,380,132 and a par value of PLN 6,000,000.00, representing 54,55% of the share capital and total voting rights; iv. 4,000 shares in PBG DOM Invest Ltd. held by the PBG Dom, with a book value of PLN 21,301, and a par value of EUR 4,000.00, representing 100% of the share capital and total voting rights; v. 1,000 shares in Ecoria, 1,000 equity interests in PBG Erigo Projekt and 100 shares in PBG Dom Invest X held by PBG Erigo, with an aggregate book value of PLN 17, and an aggregate par value of PLN 60,000.00; d. Agreements on registered pledge over a set of movables and property rights: 9 of 12

10 i. the Company: pledge over a set of movables with a total value of PLN 196,268 thousand; ii. PBG DOM: pledge over a set of movables with a total value of PLN 10,390 thousand; iii. Wschodni Invest: pledge over a collection of movables with a total value of PLN 36,156 thousand; iv. pledge over a set of movables of Ecoria II, Invest I, Strzeszyn, Platan, Malta and Ecoria with a total value of PLN 5,221 thousand; e. Surety agreement executed between POG and the Security Agent, up to the amount representing 150% of the amount received by the Company to the divestment account, but no more than PLN 226,500,000.00, and surety agreements executed between the Obligor Companies (excluding PBG Erigo and PBG Dom Invest) and the Security Agent, up to the maximum secured amount of PLN 1,065,00,000.00, with the Security Agent acting on behalf and for the benefit of Bondholders, under which the Obligor Companies granted an irrevocable and unconditional surety (within the meaning of Art of the Polish Civil Code) for payment of the Secured Claims, including in particular the Company s obligation to make any and all payments under Bonds. Each Guarantor undertook to perform obligations under each Surety jointly with the Company if a delay occurs in the Company s performance of its obligations to pay the whole or any part of any amount due under the Secured Claims, in accordance with the contract terms; f. The Company and the Obligor Companies, excluding PBG Erigo and PBG Dom Invest, submitted declarations of submission to enforcement pursuant to Art of the Polish Code of Civil Procedure, up to the maximum secured amount of PLN 1,065,000,000.00; g. Assignments of receivables and rights under existing and future insurance contracts and loan agreements to secure claims: i. assignment of the Company s receivables under (a) insurance contracts in respect of Encumbered Properties charged with Mortgages, (b) loan 10 of 12

11 agreements between the Company and the Guarantors, (c) loan agreements between the Company and POG; (d) intra-group service agreements concluded by POG and the Company and subcontractor agreements under construction contracts; ii. security assignment of receivables of PBG Dom under insurance contracts in respect of Encumbered Properties charged with Mortgages and loan agreements between PBG and the Guarantors, granted in favour of the Bond Security Agent; iii. security assignment of receivables of PBG Erigo under insurance contracts in respect of moveables and agreements on loans advanced by PBG Erigo to Guarantors, granted in favour of the Bond Security Agent; iv. security assignment of receivables of Invest I under insurance contracts in respect of Encumbered Properties charged with Mortgages, granted in favour of the Bond Security Agent; v. security assignment of receivables of Platan under insurance contracts in respect of Encumbered Properties charged with Mortgages, granted in favour of the Bond Security Agent; vi. security assignment of receivables of Ecoria under insurance contracts in respect of Encumbered Properties charged with Mortgages, granted in favour of the Bond Security Agent; vii. security assignment of receivables of Erigo IV sp. z o.o. S.K.A. under loan agreements between Erigo IV sp. z o.o. S.K.A. and the Guarantors, granted in favour of the Security Agent; h. Registered pledges over bank accounts: i. registered pledge over receivables arising under the Company s Divestment Account agreement; ii. registered pledge over bank accounts of PBG Dom, PBG Erigo, Ecoria II, Invest I, Strzeszyn, Platan, Malta, Ecoria; i. Agreement for creation of contractual joint mortgages on the following properties: 11 of 12

12 i. properties owned by the Company with a total book value of PLN 19,540,837.60; ii. property owned by Platan with a total book value of PLN 32,443,076.75; iii. property owned by Malta with a book value of PLN 16,507,797.88; iv. property owned by Invest I with a book value of PLN 9,551,990.35; v. properties owned by PBG DOM with a total book value of PLN 1,588,000.00; Legal basis: Par. 5.1) and Par. 5.3) of the Minister of Finance s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated February 19th 2009 (Dz. U. No. 33, item 259, as amended). For PBG S.A.: Magdalena Eckert 12 of 12