Current report no. 26/2014

Issue of bonds under the bond issue program in place

 

Body of the report:

The Management Board of Jastrzębska Spółka Węglowa S.A. („Issuer”, „Company”, „JSW”) reports that the Company issued bonds („Bonds”) on 6 August 2014 under the bond issue program in place („Program”) announced in current report no. 21/2014 of 31 July 2014.

The issue entails 70,000 registered bonds denominated in PLN with a nominal value of PLN 10,000.00 each and with a total nominal value of PLN 700,000,000 and 16,375 registered bonds denominated in USD with a nominal value of USD 10,000.00 each and with a total nominal value of USD 163,750,000.

The proceeds obtained from the bond issue will be used for JSW to finance the acquisition of an organized part of a business in the form of the KWK „Knurów-Szczygłowice” Hard Coal Mine.

The bonds’ maturity date in the PLN tranche ranges from 29 to 77 months and in the USD tranche it ranges from 22 to 77 months from the date of issue subject to a call option for the bonds according to the rules prescribed by the Terms of Issue, while the final maturity date for the Bonds is 30 December 2020. The Bonds will be redeemed at their nominal value.

PLN-denominated bonds will bear floating interest set on a per annum basis using the WIBOR 6M reference rate plus a fixed margin while the USD-denominated bonds will bear floating interest set on a per annum basis using the LIBOR 6M reference rate plus a fixed margin, with an option to increase the margin according to the rules prescribed by the Terms of the Bond Issue payable on 30 June and 30 December of each year up to the date of redemption.

On the date of issue, the Bonds are collateralized in the form of a surety extended by the companies doing business as JSW KOKS S.A. and Wałbrzyskie Zakłady Koksownicze „Victoria” S.A. („WZK „Victoria” S.A.”), respectively, up to a maximum total amount constituting 20% of the equity of the company doing business as Koksownia Przyjaźń S.A., i.e. the legal predecessor of the company doing business as JSW KOKS S.A. and up to 20% of the equity of the company doing business as WZK „Victoria” S.A. – i.e. up to a total amount of PLN 441.9 million as at the end of the financial year preceding the extension of the surety, while after obtaining consent to raise the amount of the sureties up to a maximum amount constituting 100% of the equity of the company doing business as JSW KOKS S.A. as of 2 January 2014 and 100% of the equity of WZK „Victoria” S.A. as at the end of the financial year preceding the extension of the surety.

Additional collateral will be established for the Bonds at a later date in the form of registered liens on assets, registered liens on contractual rights, registered liens on accounts and mortgages on real properties.

JSW reports that the Issuer’s drawn down financial liabilities on the last day of the quarter preceding the proposal of acquisition, i.e. as of 30 June 2014 are PLN 1,286.3 million, including trade payables of PLN 942.0 million and investment liabilities of PLN 241.3 million. At the same time, as of 30 June 2014 the Issuer did not have any liabilities under credit facilities, loans, bonds or financial lease agreements, where on the date of publishing this report, the foregoing data are undergoing review by a statutory auditor.

At the same time, the Issuer’s Management Board thinks that JSW’s financial perspectives will develop, at least up until the bond maturity date, in a manner that does not pose a threat to its ability to pay the bond-related obligations.

Legal grounds:

§ 5 section 1 sub-section11 of the Finance Minister’s Regulation of 19 February 2009 on the current and periodic information conveyed by securities issuers and the conditions for recognizing the information required by the regulations of a non-member state as being equivalent (Journal of Laws 2009, No. 33, Item 259 as amended).