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Current Report No. 37/2020

Termination of a finance contract with the European Investment Bank

Body of the report:

The Management Board of Jastrzębska Spółka Węglowa S.A. (“JSW”, “Company”) reports that on 15 October 2020 it made a decision to terminate, by mutual consent of the parties, the finance contract (“Contract”) entered into on 9 April 2019 by and between JSW S.A., a JSW subsidiary, i.e. JSW KOKS S.A. and the European Investment Bank (“EIB”) with its registered office in Luxembourg.

This financing was granted in the form of a term facility in the amount of EUR 58,500,000 for execution of Strategic Investments of the Company and its subsidiary JSW KOKS S.A., described in more detail in Current Report No. 30/2019.Currently neither the Company nor JSW KOKS S.A. has any debt under this facility.

The termination of the Contract will, at the same time, cause expiry of the collateral established in connection with the Contract by the Company and JSW KOKS S.A.

The decision on termination of the facility agreement between EIB and JSW, a key European producer of coking coal, which was relisted by the European Commission as a critical raw material, was made in connection with the requirement that JSW should, at the shortest possible time, satisfy the guidelines of the regulations for granting funding under the anti-crisis shield, based on the application which the Company reported in Current Report No. 26/2020.

The terms of the Regulations for applying for participation in the governmental program under the name “The Polish Development Fund’s Financial Shield for Large Companies” require, in particular, that an intercreditor agreement be signed between the existing financial creditors (including EIB), PFR and the Company. Conclusion of such an intercreditor agreement is, at the same time, a condition precedent for disbursement of funds under this aid funding.

Satisfaction of this condition in the case of the EIB Contract by the required time, considering the Company’s financial liquidity needs, has turned out impossible due to the time-intensiveness of the funding process and the need to adapt it to the schedule of work on finalizing the PFR support application project.

At the same time, the Company reports that it will make efforts to apply again for the EIB funding for the Strategic Investments subject to the existing contract.

Execution of the agreement on termination of the EIB Contract is subject to the consent of the JSW S.A. Supervisory Board.

Legal basis: Article 17(1) of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse and Repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC

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