Netia signs an amendment agreement to the credit facility agreement with bank consortium arranged by Rabobank Polska SA (a material agreement) (34/2008)
WARSAW, Poland –27 June 2008 – Netia SA (the “Company” or “Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, announced today that on 27 June 2008, Netia entered into an Accession, Amendment and Restatement Agreement (the “Amendment Agreement”) with Rabobank Polska S.A. (as the arranger), Bank Millennium S.A., Bank Gospodarki Żywnościowej S.A. and Raiffeisen Bank Polska S.A. (the “Banks”), relating to the facility agreement concluded on 15 May 2007 (the “Facility Agreement”), which was notified to the public in Current Report No. 53/2007, dated 15 May 2007.
Following the disposal of the shares in P4 Sp. z o.o. for EUR 131,795,000 (see current report No. 24, dated 30 April 2008), Netia has moved into a cash positive position. As a result, Netia needs less external funding but a longer availability period than under the original terms of the Facility Agreement. Following the execution of the Amendment Agreement and Netia’s fulfilment of the conditions precedent to the entry into force of the amendments provided for thereunder, the Facility Agreement has been restructured to provide, among others, a draw-dawn availability period ending 31 December 2010 rather than 15 November 2008 (with respect to the term loan), and a reduction of the facility amount from PLN 300 million to PLN 275 million, available to Netia in the form of a term loan and a revolving loan of up to PLN 225 million and PLN 50 million, respectively (the “Facility”). The Facility is to be repaid by 31 December 2012 instead of 15 November 2011. The Facility continues to bear interest at a variable interest rate of WIBOR plus a margin dependent on financial ratios. The proceeds from the Facility will be used to finance the Netia Group’s capital expenditures, its general corporate purposes and the acquisition of companies whose business activities are substantially similar to the business activities of the Group.
Based on their projections, the Management Board believes that this funding, together with the cash balances currently held, are sufficient to fund Netia’s expansion plans through to an expected positive cash flow in 2010.
To supplement the existing security interests, which remain in place (see Current Report No. 53/2007 dated May 15, 2007), the following new security interests were established in favor of the financing Banks to secure the repayment of the Facility:
1. The Company established financial and registered pledges on:
a. 18,359 series A shares in Netia Spółka Akcyjna UMTS s.k.a (“Netia UMTS”) with a nominal value of PLN 500 each, comprising 99.99 % of the share capital of Netia UMTS, conferring the right to 99.99 % of the votes at its shareholders’ meeting. The above 18,359 shares are reflected in the Company’s accounts at the total book value of PLN 111.7 million;
b. 164,661 shares in Uni-Net Sp. z o.o, (“Uni-Net”) with a nominal value of PLN 50 each, comprising 37.8% of Uni-Net’s share capital, conferring the right to 37.8 % of the votes at its shareholders’ meeting. The above 164,661 shares are reflected in the Company’s accounts at the total book value of PLN 7.2 million;
c. 95,070,274 Series M registered shares in Świat Internet S.A, (“Świat Internet”) with a nominal value of PLN 10 each, comprising 84.5% of Świat Internet’s share capital, conferring the right to 84.5 % of the votes at its shareholders’ meeting. The above 95,070,274 shares are reflected in the Company’s accounts at the total book value of PLN 641.5 million;
d. 500 shares in Internetia Sp. z o.o, (“Internetia”) with a nominal value of PLN 500 each, comprising 83.33 % of Internetia’s share capital, conferring the right to 83.33 % of the votes at its shareholders’ meeting. The above 500 shares are reflected in the Company’s accounts at the total book value of PLN 28.1 million.
2. The Company established civil law and registered pledges on Netia’s rights as the general partner in Netia UMTS.
3. Internetia established registered and financial pledges on 1 series A share in Netia UMTS, with a nominal value of PLN 500, comprising 0.01 % of the share capital of Netia UMTS, conferring the right to 0.01 % of the votes at its shareholders’ meeting. The above 1 share is reflected in Internetia’s accounts at the total book value of PLN 0.01 million.
The registered pledges referred to above shall become effective upon their registration by the competent registry court. The civil law and financial pledges referred to above will expire upon the registration of the registered pledges.
All the aforementioned shares and rights on which the pledges were made are Netia’s long-term capital investments. The pledges were classified by the Company as pledges on material assets in view of the fact that they were established on shares constituting more than 20% of the equity of the above mentioned companies.
Rabobank Polska S.A, Bank Millennium S.A., Bank Gospodarki Żywnościowej S.A. and Raiffeisen Bank Polska S.A. are entities unrelated to Netia.
Art. 56 section 6 of the Act on Public Offerings, the Terms Governing the Introduction of Financial Instruments into Organized Trading, and on Public Companies, and §5 section 1.1 of the Regulation of the Minister of Finance on Current and Periodic Disclosures to be Made by Issuers of Securities dated 19 October 2005 (Journal of Laws of 2005, No. 209, item 1744).