Guarantees and sureties

Guarantees and sureties, including guarantees and sureties issued to and received from related parties

Sureties for credit facilities

Surety for overdraft facility with PKO BP

Following execution of Annex 2 to a multi-purpose credit facility on September 20th 2016, on the same date the Grupa Azoty S.A.’s key subsidiaries, including Grupa Azoty PUŁAWY, Grupa Azoty POLICE and Grupa Azoty KĘDZIERZYN, entered into an agreement to grant sureties in favour of PKO Bank Polski S.A. securing the repayment of debt under the PLN 240m multi-purpose credit facility, which superseded the previous surety agreement of April 23rd 2015.

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 would not exceed 120% of the facility amount, that is PLN 288m in aggregate, at any time during the facility term, irrespective of whether new entities accede to the surety agreement. The share of each surety provider 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 no more than PLN 96m.

Following execution of Annex 13 to an overdraft facility on September 20th 2016, on the same date the Grupa Azoty S.A.’s key subsidiaries, including Grupa Azoty PUŁAWY, Grupa Azoty POLICE and Grupa Azoty KĘDZIERZYN, entered into an agreement to grant sureties in favour of PKO Bank Polski S.A. securing the repayment of debt under the PLN 310m overdraft facility, which superseded the previous surety agreement of April 23rd 2015.

Each surety provider granted a surety covering the parent’s liabilities under the overdraft facility agreement, with the proviso that the aggregate amount of those sureties would not exceed 120% of the facility amount, that is PLN 372m in aggregate, at any time during the facility term, irrespective of whether new entities accede to the surety agreement. The share of each surety provider 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 not more than PLN 124m (for details, see Current Report No. 52/2016 of September 20th 2016).

Sureties issued during the financial year upon instructions of the Group companies

Source: Company data

Sureties granted after the reporting period

The parent’s Supervisory Board approved the grant of surety to Grupa Azoty ATT Polymers GmbH of up to EUR 1,800 thousand, as security for a grant advanced by Investitionsbank des Landes Brandenburg (ILB) to finance 20% of capital expenditure on construction of a logistics centre in Guben, Germany.

On February 14th 2017, the parent and Grupa Azoty ATT Polymers GmbH (the parent’s subsidiary) signed a surety agreement under which the parent granted to the subsidiary a surety of up to EUR 1,800 thousand.

The surety was granted to secure a EUR 1.5m grant advanced to Grupa Azoty ATT Polymers GmbH by ILB to finance 20% of capital expenditure on construction of a logistics centre in Guben, Germany (the total amount of investment project is EUR 7.47m).

Guarantees issued upon instruction of the Group

In 2016, the Group did not issue any guarantees whose total amount would exceed 10% of the parent’s equity.

Guarantees issued during the financial year by or upon instruction of the Group companies

 Source: Company data

Guarantees amended upon instruction of the Group

In 2016, the Group did not sign any annexes to amend its guarantees whose amount would exceed 10% of the parent’s equity.

Guarantees amended during the financial year upon instruction of the Group companies

Source: Company data

Letters of credit
Letters of credit issued at the request of Grupa Azoty PUŁAWY

On February 4th 2016, at the request of Grupa Azoty PUŁAWY, PKO Bank Polski S.A. issued an import letter of credit for EUR 1,496 thousand, expiring on August 19th 2016, for the benefit of an equipment vendor. The letter of credit was issued under a multi-purpose credit facility agreement. On August 23rd 2016, the letter of credit was settled.

Letter of credit issued at the request of Grupa Azoty POLICE

On May 4th 2016, at the request of Grupa Azoty POLICE, PKO Bank Polski S.A. issued a standby letter of credit for USD 1,300 thousand, expiring on December 31st 2016, as payment bond for the contract for construction of a flue gas treatment unit at the EC II CHP plant.