The Management Board of LC Corp S.A. (“the Issuer” or “the Company”) informs that on 20/12/2017 the Issuer's subsidiary, i.e. LC Corp Invest XVII Sp. z o.o. Projekt 22 Sp. k., with the registered office in Wrocław, (hereinafter called “the Borrower”), in which the Issuer holds, directly and indirectly (through its subsidiary: LC Corp Invest XVII Sp. z o.o.), all the shares, entered into a bank loan agreement (“the Agreement”) with entities not affiliated with the Issuer – mBank Hipoteczny S.A., with the registered office in Warsaw, and mBank S.A., with the registered office in Warsaw, (“the Lenders”):
- up to the amount of EUR 34,187,000.00 (“the Investment Loan”) designated, inter alia, for a financing or refinancing of net costs (without VAT) relating to the construction of an office building called “WOLA RETRO” in Warsaw (“the Project”) and
- up to the amount of PLN 7,000,000.00 (“the VAT Loan”) designated for a financing and refinancing a recoverable VAT amount relating to the Project costs.
The loans granted will bear interest at a variable rate per annum, calculated as a sum of the EURIBOR (for the Investment Loan) and the WIBOR (for the VAT Loan) reference rate and margins determined under market conditions. The commission on the loan given to the Borrower was based on market conditions.
According to the Agreement, the debt arising from the Investment Loan must be repaid not later than on 28/11/2027, and as regards the repayment of the debt arising from the VAT Loan, not later than on 28/11/2020.
The Agreement was secured by the following basic instruments:
- a first-ranking mortgage on land to which the Borrower has the right of perpetual usufruct, located in Warsaw at Skierniewicka and Siedmiogrodzka streets, which is entered into the Land and Mortgage Register No. WA4M/00142636/9 (“the Land”) maintained by the District Court for Warszawa-Mokotów in Warsaw, the 10th Land and Mortgage Division; the Borrower mortgaged the said land for the benefit of the Lenders up to the amount of 150% of the Loan;
- a subordination agreement concluded by the Borrower, the Issuer, other Issuer's subsidiaries (among them: LC Corp Invest I Sp. z o.o.), as subordinated creditors, with the Lenders, as senior creditors, which involves the assignment of all subordinated debts for security purposes;
- an assignment of rights and claims arising from lease agreements and other agreements relating to the Project for the Loan has been given;
- a registered pledge on rights and claims of the general partner and the limited partner of the Borrower's partnership together with a declaration on submission to enforcement pursuant to Art. 777 of the Code of Civil Procedure;
- a first-ranking registered pledge on the Borrower's partnership (movables and transferable rights);
- a first-ranking registered and financial pledge on all the Borrower's bank accounts together with powers of attorney granted to the Lenders;
- an assignment of rights from insurance policies relating to the Land and an assignment of rights arising from the agreement concluded with the principal contractor and from other construction agreements, bank guarantees pertaining the Project;
- the Borrower's declarations on submission to enforcement pursuant to Art. 777 of the Code of Civil Procedure up to the amount of 150% of the loans; the same declarations were made by every entity that uses the collateral for security purposes;
- a support agreement with the Issuer – as the project sponsor – which includes the commitment to cover the costs arising from the Project budget overrun up to amount of 10% of the Project budget together with a declaration on submission to enforcement pursuant to Art. 777 of the Code of Civil Procedure up to the amount of EUR 3,576,261.90 or alternatively a bank guarantee to meet the costs of the Construction budget overrun – valid within the Investment Loan availability period;
- a surety given by the Issuer, as the sponsor, up to the amount being the difference between revenues expected from lease agreements as at the disbursement date, ensuring the DSCR of not less than 75%, and revenues ensuring the DSCR of 120% based on lease agreements with entities not affiliated with the sponsor, which surety must be valid until the revenues from lease agreements concluded with entities not affiliated with the Issuer – as the sponsor – ensure the DSCR of at least 120%;
- a support agreement with the Issuer – as the sponsor – which includes the sponsor's commitment to build up the debt service reserve together with a declaration on submission to enforcement pursuant to Art. 777 of the Code of Civil Procedure up to the amount of EUR 558,660.50 – valid after the expiration of the sponsor's surety;
- cross default and cross-collateral clauses with the loan agreement concluded on 30/11/2016 between mBank Hipoteczny S.A. and the Issuer's subsidiary, LC Corp Invest XVII Sp. z o.o. Projekt 21 Sp. k. (the Issuer informed about concluding the said agreement in the Current Report No. 120/2016 of 30/11/2016), until the conversion conditions have been met and a construction loan has been converted into an investment loan for one of projects;
- the VAT Loan will be secured with the securities of equal or lower ranking to the Investment Loan and will have the same securities as those used for the Investment Loan.
The Borrower must also enter into agreements hedging against foreign exchange risk and interest rate risk, which must be secured by a mortgage of up to PLN 32,235,000 (which must be a lower-ranking mortgage compared with the mortgage for the Agreement) on the Land, together with a declaration on submission to enforcement pursuant to Art. 777 of the Code of Civil Procedure.
The other terms and conditions of the Agreement are not different from those commonly set out in agreements of this type.
According to the Issuer, this information constitutes inside information within the meaning of Article (1) of MAR.