Agreements of significance to Enea Capital Group operations
In 2016 Enea Capital Group companies did not conclude any significant agreements, i.e. agreements with the value exceeding 10% of Enea's equity, yet in the reporting period an annex was concluded to the Multiannual Agreement No. UW/LW/01/2012 for supplies of fuel coal between Enea Wytwarzanie and LW Bogdanka. Pursuant to the Annex the volume of supplies to Kozienice Power Plant in the period of 2017-2036 was increased, as a result of which the value of the aforementioned agreement grew by ca. PLN 2.7 bln. Additionally, on 23 December 2016 Enea Wytwarzanie sp. z o.o. concluded a deadline amending annex to the agreement of 21 September 2012 on the investment implementation. The subject of the annex is extension of the deadline for the performance of the agreement relating to the construction of a power unit in Kozienice Power Plant until 19 December 2017, and shifting the deadline of its completion stems from objective reasons beyond the control of the contractual parties. The value of the agreement did not change as a result of the annex conclusion.
Execution of significant agreements
|Date of conclusion||Party to the agreement||Description|
|21 September 2012||Enea Wytwarzanie
sp. z o.o.
|Hitachi Power Europe GmbH i Polimex-Mostostal SA||Agreement on the construction of a new power unit in Enea Wytwarzanie sp. z o. o. - the investment is planned to be completed in December 2017|
|23 July 2015||Enea SA||PKO BP SA, Bank Pekao SA, Bank Zachodni WBK SA, Bank Handlowy w Warszawie SA||Annex to the Programme Agreement of 21 June 2012 amending the terms of financing in the amount up to PLN 3 bln|
|3 December 2015||Enea SA||Bank Gospodarstwa Krajowego||Programme Agreement in the amount of up to PLN 700 mln with allocation to investment needs financing|
|30 September 2016||Enea Wytwarzanie
sp. z o.o.
|Rafako SA||Supply and assembly of the installation of the catalytic denitrogenation of flue gases for AP-1650 boilers No. 9 and 10 including electrostatic precipitators modernisation|
|28 June 2011||Enea Wytwarzanie
sp. z o.o.
|Rafako SA||Supply and assembly of the installation of the catalytic denitrogenation of flue gases for OP-650 boilers No. 4-8|
|29 May 2015||Enea SA||European Investment Bank||Financial agreement for the amount of PLN 946 mln|
Agreements on coal supplies and transportation
Agreements concluded by Enea Wytwarzanie sp. z o.o.
|Date of conclusion||Party to the agreement||Description|
|4 March 2010||LW Bogdanka SA||Multiannual agreement No. UW/LW/01/2010 - specifies the general terms of coal supplies in 2010-2017|
|3 March 2016||Annual Agreement for supplies of fuel coal in 2016 - completed|
|15 December 2016||Annual Agreement for supplies of fuel coal in 2017 - Appendix No. 8 to the Agreement No. UW/LW/01/2010|
|23 January 2012||Multiannual agreement No. UW/LW/01/2012 - specifies the general terms of coal supplies in 2017-2036|
|15 December 2016||Annual Agreement for supplies of fuel coal in 2017 - Appendix No. 2 to the Agreement No. UW/LW/01/2012|
|3 December 2014||Katowicki Holding Węglowy SA||Multiannual agreement - specifies the general terms of coal supplies in 2015-2017|
|9 September 2015||Annual Agreement for supplies of fuel coal in 2016 - completed|
|20 September 2016||Annual Agreement for supplies of fuel coal in 2017|
|31 March 2015||Jastrzębska Spółka Węglowa SA||Coal supply agreement - specifies the terms of coal supplies in 2015-2017|
|12 January 2015||Kompania Węglowa SA (after transformation Polska Grupa Górnicza sp. z o.o.)||Coal supply agreement - specifies the detailed terms of coal supplies in 2015-2016 - completed|
|16 May 2016||PKP Cargo SA||Performance of fuel coal transportation service for Enea Wytwarzanie from LW Bogdanka SA in the period from 25 May 2016 to 25 August 2017 (or until the exhaustion of the volume of 5,050,000 t)|
|9 June 2016||PKP Cargo SA||Performance of fuel coal transportation service for Enea Wytwarzanie from Katowicki Holding Węglowy SA, Polska Grupa Górnicza sp. z o.o., Jastrzębska Spółka Węglowa SA in the period from 10 June 2016 to 10 June 2017 (or until the exhaustion of the volume of 1,250,000 t)|
Signing of the Investment Agreement with Energa SA and Elektrownia Ostrołęka SA relating to the construction and operation of the power unit in Ostrołęka Power Plant
On 19 September 2016, Enea SA and Energa SA signed a Letter of Intent relating to undertaking the cooperation on the preparation, implementation and operation of a modern 1,000 MW unit in Ostrołęka Power Plant (investment, Ostrołęka C).
The Parties’ intention is joint elaboration of Ostrołęka C effective business model, verification of its design documentation and optimisation of technical and economic parameters of the new unit. The cooperation includes also the performance of the tender procedure to select the general contractor for the Investment.
In the Parties’ agreeable opinion the implementation of the Investment will positively affect the Polish energy security, will satisfy the highest environmental standards and will guarantee a next high-performance and low-emission source of energy in the Polish Power System.
On 8 December 2016 the Company concluded an Investment Agreement relating to the implementation of Ostrołęka C project. The subject of the Agreement is preparation, construction and operation of the power unit mentioned above. Pursuant to the concluded Agreement the course of the cooperation, as a rule, will be organised in three stages: Development Stage - until the instruction is given to commence works to the general contractor, Construction Stage - until commissioning of Ostrołęka C for commercial exploitation and Operation Stage - commercial exploitation of Ostrołęka C. After the Development stage, Enea SA is obliged to participate in the Construction Stage assuming that the Project’s profitability condition is satisfied, and the Project funding will not infringe upon the Company’s bank covenants. It is estimated that the total capital expenditures of Enea SA until the end of the Development Stage will amount to ca. PLN 128 mln. In order to implement the Investment Energa SA will sell the shares in Elektrownia Ostrołeka SA, being 50% of the share capital, to Enea SA, in the amount of PLN 101 mln. The condition precedent for the Investment Agreement’s entry into force was obtaining the consent of the President of the Office of Competition and Consumer Protection for the concentration being the acquisition of the shares in the special purpose vehicle establish to implement the Project. The condition was satisfied on 11 January 2017.
On 19 December 2016 the special purpose vehicle announced the tender procedure for the selection of a general contractor to construct Ostrołęka C power plant of ca. 1,000 MW capacity and net efficiency of at least 45%, operating on steam supercritical parameters. Elektrownia Ostrołęka SA on the realisation of specific assumptions (with a relevant share of Enea SA, Energa SA and potential Financial Investors) and assuming the introduction of the capacity market or other support mechanisms, will be able to undertake a comprehensive implementation of the project.
Termination/withdrawal from proprietary interests purchase agreements by Enea SA
On 28 October 2016 Enea submitted notices on termination or withdrawal from longer-term contracts for the purchase of proprietary interests resulting from certificates of origin of energy from renewable sources (the so-called green certificates). The reason for termination/withdraw from individual contracts by the Company was exhaustion of possibilities of restoring the contractual balance and equivalence of performance by the parties as a result of law amendments. The financial result stemming from the termination of the Agreements will be avoidance by the Company of a loss being the difference between contractual prices and the market price of green certificates. The estimated total value of Enea’s contractual liabilities amounted to ca. 1,187 mln net.
Signing of a letter of intent relating to the preliminary interest in the financial engagement in Katowicki Holding Węglowy
In relation to the process of obtaining capital investors by Katowicki Holding Węglowy SA, in July 2016 the Company commenced talks with potential investors relating to a possibility of implementing a potential investment and its potential parameters.
On 28 October 2016 Enea SA, Węglokoks SA and Towarzystwo Finansowe Silesia sp. z o.o. (Investors) signed a letter of intent expressing the preliminary interest in the financial engagement in Katowicki Holding Węglowy or in KHW’s assets. Investors’ engagement in KHW depends on the satisfaction of numerous conditions related to e.g. presentation of an acceptable business plan and financial model and obtaining the required corporate consents. The Investors’ final decisions as regards the participation in KHW will be made e.g. after the analysis of the due diligence performed and after the determination of the final shape of all the other arrangements.
Acquisition of shares in Polimex – Mostostal SA
On 6 December 2016 targeted talks commenced between the Company and the following: Energa SA, PGE Polska Grupa Energetyczna SA, PGNiG SA (Investors) and between Investors and Polimex-Mostostal SA (Polimex). The goal of these talks was drafting the structure of a potential equity interest of Investors in Polimex (Investment) and development of a potential model of cooperation between Investors on the Investment implementation.
On 27 December 2016 the Company, the Investors and Polimex signed a letter of intent in which the Investors expressed their intention to consider a potential investment in Polimex and based on which they commenced talks with Polimex with the purpose of specifying detailed parameters of the transaction. At the same time, on the same day, the Company and the Investors, lodged a motion with the Office for Competition and Consumer Protection (UOKiK) for issuing the approval by the President of UOKiK to perform the concentration being the takeover by the Investors of a joint control over Polimex. The consent for the concentration being the takeover by the Investors of a joint control over Polimex, mentioned above, was issued on 18 January 2017.
At the same time, also on 18 January 2017, the Company, the Investors and Polimex concluded an investment agreement pursuant to which the Investors undertook to make an investment in Polimex. The investment will consist in the subscription by the Investors for a total of 150 mln shares issued by Polimex. The Company undertook to take up 37.5 mln new issue shares for the total issue price of PLN 75 mln. The agreement was concluded under conditions precedent, described in detail in the current report No. 2/2017. Along with the aforementioned agreement other agreements were concluded which made the terms of cooperation more precise together with the mutual rights and obligations of the Investors on the implementation of the above-mentioned investment, which were concluded with creditors and then existing shareholders of Polimex.
On 20 January 2017 in relation to the satisfaction of conditions precedent reserved in the investment agreement mentioned above, the Company accepted the offer made by the Management Board of Polimex to subscribe, within the private subscription, for 37.5 mln shares, at the issue price of PLN 2 per share, i.e. for the total issue price of PLN 75 mln. Additionally, as the result of the performance of one of the above mentioned additional agreements on 20 January 2017 the Company purchased 15 mln shares in Polimex from its previous shareholder.
On 21 March 2017 the Investors published a tender offer for shares in Polimex in relation to exceeding (as the parties to the memorandum of understanding) of the 33% threshold of the general number of votes at a general meeting of Polimex. The tender offer is consequent and the Investors intend to acquire the said shares in the amount constituting the excess of shares over the number of shares currently held by Investors (i.e. a total of 65.93% of the total number of votes in Polimex) and guaranteeing the achievement of no more than 66% of the total number of votes at a general meeting of Polimex. In relation to the tender offer each of the Investors (including Enea) intends to acquire not more than, approximately 0.018% of the total number of votes at a general meeting of Polimex.
Initial offer for EDF in Poland
On 16 September 2016 Enea SA and PGE SA, Energa SA and PGNiG Termika SA (Business Partners) jointly made a preliminary, non-binding offer to EDF International SAS (EDF) for the purchase of shares in companies belonging to EDF in Poland, holding conventional generating assets and conducting service operations.
On 30 November 2016 the Company and Business Partners submitted a new offer to EDF for the purchase of shares in companies belonging to EDF in Poland, holding conventional generating assets and pursuing a service activity. The submission of the new offer by Business Partners was made in relation to the upcoming expiry of the offer submitted on 16 September 2016.
On 27 January 2017 the Company and Business Partners signed an agreement with EDF Investment SAS relating to the conduct of negotiations regarding the acquisition of EDF’s assets in Poland and due diligence examination within this scope. The transaction includes the acquisition of all EDF’s shares in EDF Polska SA which in particular is the owner of 4 combined heat and power plants, i.e. Kraków, Gdańsk, Gdynia and Toruń and heat distribution networks in Toruń, Rybnik Power Plant, and the acquisition of all 4 combined heat and power plants, i.e. Wrocław, Zielona Góra, Czechnica and Zawidawie and heat distribution network in Zielona Góra, Siechnice and Zawidawie.
On 15 March 2017 the Business Partners made amendments to the transaction structure being: 1) withdrawal of PGNiG Termika SA from the transaction, 2) takeover of the so far declared share of PGNiG Termika SA in the transaction by PGE SA, which results in the growth in PGE SA’s share in the transaction to 60%, 3) maintaining the shares of Enea SA and Energa SA in the transaction on the same level of 20% for each company. Pursuant to the above amendments in the transaction structure confirm filing no objections by EDF.
Acquisition of shares in ENGIE Energia Polska
On 30 September 2016 the Company submitted an offer for the acquisition of 100% shares in ENGIE Energia Polska SA. The offer was submitted compliant with the process initiated by ENGIE, the owner of 100% of shares in ENGIE Energia Polska, which is considering their sale.
On 2 December 2016 the Company was granted exclusivity to conduct further negotiations relating to the acquisition of shares in ENGIE Energia Polska SA, owned by ENGIE.
On 23 December 2016 the Company and ENGIE International Holdings B.V. signed a conditional agreement on sale of 100% of shares in ENGIE Energia Polska SA (Agreement). Based on the Agreement the Company will purchase 100% of shares in the share capital of ENGIE Energia Polska SA, and indirectly also 100% shares in ENGIE Bioenergia sp. z o.o. ENGIE Energia Polska SA is the owner of Połaniec Power Plant. The enterprise value of ENGIE Energia Polska SA, i.e. the one calculated excluding the debt and cash in the company, was agreed on PLN 1,073,140,672. The final price for 100% of shares in ENGIE Energia Polska SA will be calculated based on the enterprise value, taking into account the net debt and working capital as at 31 December 2016.
Closing the transaction depends on the fulfilment of the following significant conditions precedent:
- obtaining the consent of the Minister of Energy, pursuant to the Act on control over certain investments,
- obtaining the consent of the President of the Office of Competition and Consumer Protection for the concentration,
- waiver of the pre-emptive right by the President of the Agricultural Property Agency, and
- conversion of ENGIE Energia Polska SA’s debt towards ENGIE group entities to equity in ENGIE Energia Polska SA.
The agreement shall expire after the lapse of 6 months of its execution, if 100% of shares in ENGIE Energia Polska SA are not purchased within this period due to failure to satisfy the conditions precedent.
On 28 February 2017 the Company was informed on the fulfilment of the last of the above mentioned conditions, which means that all the above conditions precedent were fulfilled.
On 2 March 2017 the Company received the calculation of the preliminary selling price of 100% of shares in ENGIE Energia Polska SA from ENGIE International Holdings B.V. on the level of PLN 1,264,159,355. It was stipulated in accordance with the terms of the Agreement, however it will be subject to verification by the Company and potential adjustments in the period occurring directly after taking the control over ENGIE Energia Polska SA, under the terms specified in the Agreement, compliant with the market standards applying to such transactions.
On 14 March 2017 the Issuer acquired 100% of shares in ENGIE Energia Polska SA, i.e. 7,135,000 shares, entitling to the same number of votes for the initial price of PLN 1,264,159,355. Taking over the control over EEP is in line with Enea Capital Group’s development strategy until 2030. The detailed information relating to the above transaction was published in the current report No. 10/2017 of 14 March 2017.
Insurance agreements in Enea Group are concluded in accordance with the corporate Insurance Policy. Due to the common Policy insurance standards were standardised in the Group and insurance protection acquisitions were consolidated obtaining indicative benefits both as regards the insurance and insurance costs.
Enea Group Companies transfer the risk of incurring losses as a result of property damage and third party claims by conclusion of insurance agreements with largest insurance agencies such as: PZU SA, TUiR WARTA SA, STU Ergo Hestia SA, TU Allianz Polska SA.
Due to a great exposure of Enea Group Companies to damage and latent claims it may not be ruled out that the concluded insurances may prove insufficient. The insurance coverage level does not diverge from the standards applied in the Polish electrical power industry and is adjusted to the specifics of operations of particular companies.
Agreements between shareholders of the parent company
The Company is not aware of any agreements between shareholders of Enea SA.
Collaboration or cooperation agreements
Incorporation of ElectroMobility Poland SA
PGE Polska Grupa Energetyczna, Energa, Enea and Tauron Polska Energia incorporated ElectroMobility Poland on 19 October 2016. The operations of the new company are to contribute to the creation of the electromobility system in Poland.
The new company’s share capital is PLN 10 mln. Each of the companies incorporating ElectroMobility Poland holds 25% in the share capital with 25% of votes at a general meeting.
The letter of intent regarding cooperation in the research and development projects
Based on the letter of intent of 2014 concluded between Enea SA, PGE Polska Grupa Energetyczna SA, Energa SA and Tauron Polska Energia SA, in 2016 its signatories continued the operations led by the Polish Electricity Association (PEA), whose goal was to establish a Power Sector Research Programme (PSRP) by the National Centre for Research and Development (NCRD). The first competition for financing research and development projects within PSRP was announced on 30 September 2016.
Transactions with related parties
In 2016 Enea and its subsidiaries did not conclude any transactions with related entities on non-market conditions.
Information on transactions with related entities concluded by Enea or its related entity are described in note 42 to the consolidated financial statements of Enea Capital Group for 2016.
Dependence on suppliers or recipients
The only means of transport used to deliver bituminous coal to Enea Wytwarzanie - segment of System Power Plants in 2016 was a rail transport. PKP Cargo forwarder realised 100% of supplies.
Financing sources of the investment programme
Enea SA finances the investment programme using financial surpluses from the conducted business operations and external debt. Enea Capital Group realises the investment financing model in which Enea SA obtains external funding and distributes it to its subsidiaries.
Programme Agreement on the bond issue programme up to the amount of PLN 3 bln
Enea SA holds the programme agreement relating to the bond issue programme up to the amount of PLN 3 bln with banks operating as Underwriters, i.e.: PKO BP SA, Bank Pekao SA, BZ WBK SA and Bank Handlowy w Warszawie SA. The financing is not hedged on Enea Capital Group’s assets.
The funds obtained from the programme are allocated to the realisation of investment projects in Enea Group, including e.g. for the construction of the 1,075 MWe gross supercritical bituminous coal fired power unit, which is being constructed as a part of Enea Wytwarzanie's operations.
On 23 July 2015, Enea SA concluded an annex to the Agreement which amended the financing conditions adapting them to the current market situation and amended the legal basis for the issue of new series of bonds to the Bond Act of 15 January 2015.
In 2016 Enea SA issued three tranches of 6-year bonds of the value of PLN 750 mln bearing floating rate interest (WIBOR plus margin).
As at 31 December 2016 the value of the bonds issued within the aforementioned Programme totalled to PLN 1,951 mln.
Programme Agreements on the bond issue programme guaranteed by BGK
On 15 May 2014, Enea SA concluded a programme agreement relating to the bond issue programme up to the amount of PLN 1 bln guaranteed by Bank Gospodarstwa Krajowego. The financing is not hedged on Enea Capital Group’s assets. The funds from that programme are allocated e.g. to the implementation of the investments by Enea SA and its subsidiaries.
On 1 September 2015 an annex was signed to the said Agreement which amended the legal basis for the issue of successive series of bonds to the Bond Act dated 15 January 2015.
As at 31 December 2016, Enea SA issued bonds in the said Programme of the total value of the Programme being PLN 1 bln. The bond redemption period is maximally 12.5 years from the date of their issue. The interest is based on floating WIBOR rate increased with the margin.
On 3 December 2015, Enea SA concluded another programme agreement relating to the bond issue programme up to the amount of PLN 700 mln guaranteed by Bank Gospodarstwa Krajowego. The funds from that programme are allocated e.g. to the implementation of the investments and financing the current operations of Enea SA and its subsidiaries. In 2016 Enea SA did not issue bonds within the aforementioned programme.
Programme Agreement on the bond issue programme up to the amount of PLN 5 bln
On 30 June 2014, Enea SA concluded a programme agreement relating to the bond issue programme up to the amount of PLN 5 bln with five banks acting as dealers: ING Bank Śląski SA, PKO BP SA, Bank Pekao SA and mBank SA. As a part of the Programme Enea may issue bonds with the maturity of up to 10 years, and Bank dealers have the duty of care when offering the sale of bonds to market investors. The first series bonds in the amount of PLN 1 bln were issued in February 2015. The bonds are registered with the National Depositary for Securities and traded on the alternative trading system on Catalyst.
On 7 September 2015 an annex was signed to the said Agreement which amended the legal basis for the issue of successive series of bonds to the Bond Act dated 15 January 2015.
On 16 September 2015, Enea SA issued 6-year bonds in the total amount of PLN 500 mln for one investor. The interest is based on floating WIBOR rate increased with the margin.
Investment loans granted by the European Investment Bank
On 18 October 2012, Enea SA concluded a financial agreement with the European Investment Bank (EIB) based on which the Company was granted a loan in the amount of PLN 950 mln or its equivalent in EUR (tranche "A"). On 19 June 2013, another loan agreement (tranche "B") was concluded with EIB for the amount of PLN 475 mln. The funds in the total amount of PLN 1,425 mln obtained from the loan are designated for the financing of a multiannual investment plan regarding the modernisation and extension of the power grids of Enea Operator. The loan repayment period is up to 15 years from the planned disbursement of the facility.
As at 31 December 2016 within "A" and "B" tranches, Enea SA drew funds from the loan in full, i.e. in the amount of PLN 1,425 mln in 4 separate amounts paid out from September 2013 to July 2015. The currency of the disbursed loan is Polish Zloty, floating rate, based on WIBOR rate for 6-month deposits, increased with the Bank's margin. In the case of one disbursement the interest was based on the flat interest rate.
On 29 May 2015 another loan agreement was concluded based on which EIB provided the Company with new financing in the amount of PLN 946 mln or its equivalent in EUR (tranche "C"). The funds obtained from the loan will be allocated to the financing of a multiannual investment plan in order to modernise and extend the power infrastructure of Enea Operator. The financing is not hedged on Enea Capital Group’s assets. In 2016 a loan was drawn in the amount of PLN 100 mln. Enea SA withdrew a total of PLN 200 mln within this loan. The loan interest rate is floating based on WIBOR rate for 6-month deposits increased with the Bank’s margin. The tranches will be paid in instalments, and the final repayment will be made in September 2030.
The Programme Agreements on the bond issue programme of LW Bogdanka SA
LW Bogdanka SA has two bond issue programmes. Within the first Programme Agreement concluded on 23 September 2013 with Bank Pekao SA LW Bogdanka SA issued bonds of the total value of PLN 300 mln. The redemption date is in 2018. The interest rate of the bonds is based on WIBOR 3M rate increased with the fixed margin. The other Programme Agreement was concluded on 30 June 2014 with Bank Pekao SA and Bank Gospodarstwa Krajowego up to the total amount of PLN 600 mln (two Tranches No. 1 and 2, PLN 300 mln each) and then on 27 June 2016 it was amended with an annex, within which LWB02B300616 series bonds were redeemed according to the Agreement totalling to PLN 100 mln. The redemption of LWB01B300616 series totalling to PLN 300 mln was performed through roll-up, i.e. the issue of new LWB01C300617 series of the total amount of PLN 300 mln. The Availability Period for Tranche II expired on 30 May 2016. The redemption date for LWB01C300617 series totalling to PLN 300 mln is 30 June 2017. It should be added that in accordance with the Agreement the Company may issue subsequent series of bonds within a given tranche to refinance the previous issue. The Programme ends on 31 December 2019. The interest rate of the bonds is based on WIBOR 3M rate increased with the fixed margin. As at 31 December 2016 PLN 600 mln worth of bonds were issued within the two above mentioned agreements.
Enea SA's further actions will concentrate on guaranteeing the appropriate level of diversification of external financing sources for investments planned in Enea Group Strategy in order to optimise the amount of costs and dates of debt repayment.
Issue of Enea SA's securities
Enea SA issued securities of the total amount of PLN 750 mln in 2016. The nominal debt for the bonds issued by Enea SA as at 31 December 2016 totalled to PLN 4,451 mln.
Interest rate risk hedging transactions
Implementing the Interest Rate Risk Management Policy Enea SA concluded transactions in 2016 which hedge the interest rate risk (Interest Rate Swap) for the total equivalence of the debt in the amount of PLN 1,440 mln. The concluded transactions hedge the level of settlements and payments resulting from the debt through the change of floating interest streams into fixed ones.
Use of proceeds from the issue of securities
The funds obtained by Enea SA from the bond issue are applied to the implementation of real and equity investments conducted by Subsidiaries. Enea Wytwarzanie has been constructing the most modern power unit in Poland in Świerże Górne. All the issues performed by Enea Wytwarzanie in 2016 were devoted to financing the expenses associated with the project.
Assessment of the feasibility of implementing investment plans
The Company’s financial standing gives solid bases to implement investment plans. The balance sheet, equity and balance of cash of Enea Capital Group provide a solid base for capital expenditures financing, both from our own resources and external sources. In order to use its resources efficiently, in their further investment activities (particularly in the area of acquisitions) the Company intends to make use of debt financing so as to attain leverage.
Distribution of cash - subsidiaries’ bond issue programme
PLN 3 bln - Programme Agreement of 8 September 2012 Enea Wytwarzanie
In 2016, as part of the Programme, Enea Wytwarzanie issued three tranches of 6-year bonds of the value of PLN 750 mln bearing floating rate interest (WIBOR plus margin). As at 31 December 2016 the total value of the bonds issued within the aforementioned Programme totalled to PLN 1,951 mln.
PLN 1,425 mln - Enea Operator’s Bonds
The PLN 1,425 mln worth of the programme was fully utilised by Enea Operator. The bonds, depending on the series, bear fixed or floating interest rate. The bonds will be redeemed in instalments from September 2017, and the final redemption date is in June 2030.
PLN 1 bln - Programme Agreement of 17 February 2015 Enea Wytwarzanie
On 17 February 2015, Enea Wytwarzanie, Enea and PKO Bank Polski concluded the Bond Issue Programme Agreement for the amount of PLN 760 mln. On 3 June 2015 an annex was concluded to the agreement based on which the parties increased the amount of the Programme to PLN 1 bln. As at 31 December 2016, Enea Wytwarzanie issued bonds in the said Programme of the total value of PLN 1 bln. The programme is fully utilised by Enea Wytwarzanie.
PLN 946 mln - Programme Agreement of 7 July 2015 Enea Operator
The Executive Bond Issue Programme Agreement for the amount of PLN 946 mln was concluded between Enea as guarantor, Enea Operator as issuer and PKO Bank Polski as agent. The bond redemption date - in instalments, however not later than within 15 years of the date of issue. The bonds may bear the fixed rate or floating rate interest based on WIBOR rate plus margin, with the interest rate revision after 4 or 5 years. As at 31 December 2016, Enea Operator issued bonds in the said Programme of the total value of PLN 200 mln.
PLN 936 mln - Programme Agreement of 16 July 2013 Enea Wytwarzanie
On 30 May 2016 an agreement was reached between Enea, Enea Wytwarzanie and mBank amending the Bond Issue Terms of 13 July 2015 within which the maturity of bonds was amended to 31 May 2016. On that date Enea Wytwarzanie redeemed all the bonds issued within the Programme of AII07/2015 series in the total amount of PLN 936 mln.
PLN 740 mln - Bond Issue Programme Agreement Enea Wytwarzanie
Within the Programme of PLN 740 mln, as at 31 December 2016 Enea Wytwarzanie issued bonds of the total value of PLN 350 mln.
PLN 260 mln - Programme Agreement of 12 August 2014 Enea Wytwarzanie
The PLN 260 mln worth of the programme is fully utilised by Enea Wytwarzanie. The bonds bear a fixed rate interest. The bonds will be redeemed in instalments from September 2017 to December 2026.
PLN 360 mln - Programme Agreement of 18 July 2016 Enea Operator
The Executive Bond Issue Programme Agreement for the amount of PLN 360 mln was concluded between Enea as guarantor, Enea Operator as issuer and PKO Bank Polski as agent. Within the Agreement, Enea Operator may perform a single issue of bonds. On 28 July 2016 Enea Operator issued bonds totalling to PLN 360 mln, floating rate - WIBOR 3M plus margin. The redemption date of the bonds is December 2017.
In previous years, Enea SA concluded also intergroup bond issue programme agreements via subsidiary companies which are to finance the investments in the segments of RES and Heat. These programmes are fully used and redeemed in instalments. The total amount of the bonds for redemption within these programmes was PLN 102,850 thou. as at 31 December 2016.
Credit and loan agreements concluded and completed
According to the nominal debt as at 31 December 2016, Enea SA had loans in the amount of PLN 1,625,000 thou., including borrowings drawn by Enea SA in 2016:
|Start date||End date||Creditor||Contract value||Amount of the loandrawn in 2016 [PLN ‘000]||Interest rate||Debt on loans as at 31 December 2016 [PLN '000]||Repayment period|
|29 May 2015||31 March 2032||(C) European Investment Bank||946 000||100 000||base rate + margin||200 000||principal instalments determined on the loan tranche release|
|19 June 2013||31 December 2030||(B) European Investment Bank||1 425 000||0||base rate + margin||1 425 000||principal instalments determined on the loan tranche release|
|TOTAL||1 625 000|
Credits and loans drawn in 2016 by Enea Group Companies
In December 2015 Enea Wytwarzanie sp. z o.o. concluded a financing agreement in the form of a loan from the National Fund of Environmental Protection and Water Management for the amount of PLN 60,075 thou. in relation to the undertaking titled “Construction of the flue gas desulphurisation plant for K7 and K8 boilers in Białystok Heat and Power Plant”. The loan was granted for the period from April 2016 to December 2026, WIBOR 3M interest rate, repayment in quarterly instalments. The first disbursements were made in June and December 2016 for the total amount of PLN 16,161 thou. In November 2016 Miejska Energetyka Cieplna Piła sp. z o.o. disbursed the whole available amount totalling to PLN 358 thou. within the agreements concluded for co-financing as a loan from the Provincial Fund for Environmental Protection and Water Management. On 16 December 2016 LW Bogdanka SA and mBank SA concluded an overdraft facility agreement with the limit of up to PLN 100,000 thou. The loan may be used until 29 November 2018. The loan final repayment date is on 30 November 2018. The loan interest is WIBOR 1M plus the bank’s margin.
As at the balance sheet date the loan was not utilised.
In 2016 Enea Group Companies did not terminate the loan agreements.
The total amount of the debt due to the loans and credits drawn by Enea SA and Enea Capital Group Companies as at 31 December 2016 amounted to PLN 1,691,795 thou. nominally.
As regards the loans granted by Enea SA to the Companies within Enea Capital Group, the total indebtedness as at 31 December 2016 amounted to PLN 151,062 thou. In 2016 the subsidiaries did not grant any loans.
The information on the loan agreements concluded with Enea SA in 2016 and the utilisation level are presented in the table below:
|Date of granting||Date of full repayment||Company||Amount of loan granted [PLN '000]||Interest||Debt on loans as at 31 December 2016 [PLN '000]|
|12 December 2016||30 June 2025||Enea Centrum sp. z o.o.||75 000||None||0|
Granted and received sureties
The list of suretyships granted in 2016 by Enea SA is presented in the table below:
|Date surety / guarantee was granted||Date of validity of surety / guarantee||Entity for which surety / guarantee was granted||Entity to which surety / guarantee was granted||Amount of security granted [PLN '000]||Designation of amounts covered with surety / guarantee|
|4 August 2016||30 June 2019||Enea Trading sp. z o.o.||Polenergia Obrót SA||5 000||in order to hedge the liabilities of Enea Trading against hedging future liabilities of the company towards Polenergia Obrót SA (wholesale trade in electricity and proprietary interests to certification of origin for energy)|
|19 October 2016||30 November 2018||Enea Trading sp. z o.o.||Shell Energy Europe Limited||15 484||in order to hedge the liabilities of Enea Trading against hedging future liabilities of the company towards Shell Energy Europe Limited (natural gas), hedging value EUR 3.5 mln (average exchange rate of the National Bank of Poland of 30 December 2016)|
|8 November 2016||1 January 2018||Enea Trading sp. z o.o.||Polski Koncern Naftowy Orlen SA||4 000||in order to hedge the liabilities of Enea Trading against hedging future liabilities of the company towards Polski Koncern Naftowy Orlen SA (natural gas) in Płock|
The total off-balance sheet value of sureties granted as at 31 December 2016 was PLN 208,290 thou.
Granted and received guarantees
The total off-balance sheet item value of bank guarantees granted as at 31 December 2016 was PLN 20,720.29 thou.
Guarantees granted on order of Enea SA in 2016 amounted to PLN 14,823.38 thou.
The information relating to the greatest amounts of guarantees granted in 2016 (materiality threshold > PLN 1 mln):
|Date collateral was granted||Date of collateral validity||Entity to which collateral was granted||Purpose of the agreement||Form of collateral||Value of collateral granted [PLN thou.]|
|1 January 2016||11 August 2018||Górecka Projekt sp. z o.o.||payment for rent||within the guarantee facility in the amount of PLN 350,000,000||1 662.00|
|21 December 2016||30 January 2018||Urząd Marszałkowski Województwa Zachodniopomorskiego in Szczecin||good performance of the contract||within the guarantee facility in the amount of PLN 350,000,000||1 325.10|