1/02/2013 20:15
8/2013 – Issuance of Bonds of Series C, D and E
In reference to current report no. 2/2013 of 15 January 2013, the Management Board of Trakcja S.A. (“Company”) hereby informs that on 31 January 2013 the Company issued: (i) 29,529 secured bearer bonds of series C of the total nominal value of PLN 29,529,000 (“Series C Bonds”), (ii) 197 convertible bonds of series D of the total nominal value of PLN 98,500,000 (“Series D Bonds”), and (iii) 20,921 unsecured bearer bonds of series E of the total nominal value of PLN 20,921,000 (“Series E Bonds”). Series C Bonds, Series D Bonds and Series E Bonds shall be hereinafter jointly referred to as the “Bonds”.
The bonds were offered according to the procedure set out in Art. 9, par. 3 of the Act on bonds. The offering of the Bonds did not constitute a public offering within the meaning of the Act of 29 July 2005 on public offering and the conditions for introducing financial instruments to organised trading system and on public companies.
Purpose of the Issuance
The purpose of the issuance of the Bondswas to change the financing structure, postpone the maturity date and decrease the debt on account of the issuance of ordinary bonds of series A and B, which were to be redeemed in 2013 and 2014. The Company directed the Bonds offer to selected investors, in particular to the present-day holders of bonds of series A and B.
The restructurisation of the Company’s debt on account of ordinary shares of series A and B took the following forms:
(i) repayment of a part of the liabilities in cash, including the total interest accrued;
(ii) conversion of debt into capital (through the issuance of convertible bonds of series D);
(iii) postponement of the deadline for debt repayment to 31 December 2015 (through the issuance of Series C Bonds and Series E Bonds).
The changes in the structure of the Company debt will have a positive impact on the operational situation of the Company and will increase the security of the Company’s activities in the years to come. The Company has a large portfolio of investments, for the performance of which it needs constant access to working capital. Obtaining new contracts, in turn, requires access to bank financing and external guarantees.
The basic purpose behind the issuance of the Bonds is therefore to change the structure of the existing debt on account of the previously issued bonds in order to focus the Company’s efforts on its basic activity, completion of its contracts and obtaining new investments as well as to use the current insecure and volatile situation in the Polish construction market.
In legal terms the purpose of the issuance of the Bonds was not specified.
Type of Bonds Issued
(i) The Series C Bonds are dematerialised bearer bonds of the nominal value of PLN 1,000 each and the total nominal value of PLN 29,529,000. The Series C Bonds are secured with a registered pledge on all the shares in AB Kauno tiltai owned by the Company, constituting 96.837% of the share capital of AB Kauno tiltai.
(ii) The Series D Bonds are dematerialised convertible bonds of the nominal value of PLN 500,000 each and the total nominal value of PLN 98,500,000. The Series D Bonds are unsecured registered bonds, convertible to ordinary bearer shares of series H issued by the Company as part of its contingent share capital.
(iii) The Series E Bonds are dematerialised unsecured bearer bonds of the nominal value of PLN 1,000 each and the total nominal value of PLN 20,921,000.
The Company is planning to apply for the introduction of the Series C Bonds and Series E Bonds into the Catalyst alternative trading system run by the Warsaw Stock Exchange (Giełda Papierów Wartościowych S.A.).
Volume
The Company issued: (i) 29,529 Series C Bonds of the total nominal value of PLN 29,529,000, (ii) 197 Series D Bonds of the total nominal value of PLN 98,500,000, and (iii) 20,921 Series E Bonds of the total nominal value of PLN 20,921,000.
In total, the Company issued 50,647 Bonds of the total nominal value of PLN 148,950,000.
Issue Price
The issue price of the Bonds was equal to their nominal value.
Conditions for Redemption and Payment of Interest
The Bonds will be redeemed through payment of the nominal value of the Bonds and interest at the redemption date. The Series C Bonds and Series E Bonds are planned to be redeemed on 31 December 2015, while the Series D Bonds on 31 December 2027.
The Series C Bonds and Series E Bonds bear floating-rate interest. The interest rate is the sum of WIBOR 6M and margins: (i) 3.75% for the Series C Bonds and (ii) 4.75% for the Series E Bonds. Interest on the Series C Bonds and the Series E Bonds is payable on 30 June and 31 December of each year from the issue date to the redemption date.
The Series D Bonds bear interest at an annual flat rate of 3.25%. Interest on the Series D Bonds will be payable at the date of redemption.
Security Arrangements for the Series C Bonds
The Series C Bonds are secured with a registered pledge on all the shares in AB Kauno tiltai owned by the Company, constituting 96.837% of the share capital of AB Kauno tiltai. According to the valuation report of 21 December 2012 prepared by an independent expert, the value of the shares in AB Kauno tiltai being the object of the pledge is PLN 169,773,000. More details on the security arrangements were given by the Company in current report no. 5/2013 of 24 January 2013.
Value of the Issuer’s Liabilities as of the Last Day of the Quarter Preceding the Date when the Bonds Offering was Made Available and the Prospects for the Issuer’s Liabilities until the Time of Total Redemption of the Bonds Contained in the Offering
Due to the specific nature of the Company’s activity and the short time which elapsed since the end of the quarter preceding the time when the proposal to purchase the Bonds was made, the information provided in the proposal were estimates only and may change after the quarter is closed (this refers particularly to the value of trade liabilities). Moreover, the information quoted referred only to the main types of liabilities (trade liabilities, credits and loans, bonds, and leasing liabilities), without taking into account lesser items. According to the Company’s knowledge as of the date when the proposal to purchase the Bonds was presented, the consolidated liabilities of the Company as of 31 December 2012 on account of the items listed above amounted to approximately PLN 559,000,000, while the individual liabilities reached the value of approximately PLN 259,000,000.
The level of the Company’s liabilities in the period until the redemption of the Bonds will be directly linked to the value of the investments under construction in the same periods. Due to the fact that in 2012 the Company did not obtain any significant contracts, and taking into account the time needed for launching a project after winning a tender, the level of the Company’s liabilities in 2013 will mainly depend on the progress in the performance of the projects contained in the current portfolio. The Company expects the rate of the performance of the present-day investments in 2013 to increase in comparison with 2012.
In 2013 and 2014, the participation of bank debts in the financing of newly obtained contracts is expected to systematically grow. In absolute terms, the value of such debts will depend on the value of investments, the schedule for their performance and the participation of self-performed works.
As the construction works related to the currently performed investments are expected to intensify in 2013, it is likely that the trade liabilities will grow this year. In the subsequent years the level of the trade liabilities will largely depend on the Issuer’s capability to obtain new contracts as well as on the structure of such contracts (self-performed works or works performed by subcontractors). If the structure of such projects provides for participation of subcontractors, an increase in trade liabilities should be expected in the future.
Information Allowing Potential Purchasers of the Bonds to Obtain Information on the Results of the Undertaking to be Financed by the Issuance of the Bonds and the Capability of the Issuer to Perform their Obligations Resulting from the Bonds, if such an Undertaking is Specified
Not applicable – the funds obtained as a result of the issuance of the Bonds are not going to be used for financing a specific undertaking.
Changes in the Number of Votes Resulting from the Conversion of Series D Bonds
The maximum number of votes at a general meeting of the Company under the shares taken up as a result of the conversion of all the Series D Bonds is 179,090,908.
If the maximum number of shares are taken up as a result of the conversion of all the Series D Bonds, the total number of votes at a general meeting of the Company may amount to 411,196,388.
Legal basis: Article 56, paragraph 1, point 2 of the Act on public offering and the conditions for introducing financial instruments to organised trading system and on public companies, and §5, paragraph 1, point 11 of the Regulation of the Minister of Finance dated 19 February 2009 on the current and periodic disclosures to be made by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state.
