GIGROUP (GIG): Execution by the Issuer of Annex 4 to the Credit Agreement - raport 86

Raport bieżący nr 86/2018

Podstawa Prawna:
Art. 17 ust. 1 MAR - informacje poufne.

The Management Board of Work Service S.A. (“Issuer”, “Company” or “Borrower”) announces that on 5 December 2018 The Company concluded with Bank BGŻ BNP Paribas S.A., Bank Millennium S.A., Santander Bank Polska S.A. and Powszechna Kasa Oszczędności Bank Polski S.A. (“Creditor”) annex no. 4 (“Annex”) to the credit agreement of 18 November 2015, the conclusion of which was announced by the Company in current report no. 43/2015 (“Credit Agreement”). The conclusion of earlier annexes to the Agreement concerned, among others, current reports no. 34/2017, no. 7/2018 and no. 82/2018.

The signing of the Annex is the result of comprehensive negotiations on changes to most of the material terms and conditions of the Credit Agreement. The Company informed about the commencement of these negotiations in the current report no. 70/2018. On the day of signing the Annex, the Final Repayment Date of the credits granted under the Credit Agreement was extended until 10 December 2018, which is to enable the conditions of the Annex's entry into force to be met by that time: (i) obtaining factors’ confirmation of the factoring limits available to the Company and its subsidiaries, and (ii) completion of the ongoing restructuring or refinancing of the bonds, so that they will result in: with respect to Series T and Y bonds, their refinancing and expiry of the bondholders' claims arising from the Bonds and, as a result, the removal of Series T and Y bonds from the register; and with respect to Series W bonds, the terms of the Bonds' issue changed so that their redemption date is 29 May 2020. iii) issue of new bonds based on the terms and conditions of issue that meet the detailed requirements as to particular parameters specified in the Annex.

The company will inform about the possible acquisition of factor statements and the completion of the bond restructuring process, and as a result of meeting the conditions for the entry into force of the Annex, in a separate current report.

Subject to the entry into force of the Annex, there will be a number of material and beneficial for the Company amendments to the Credit Agreement:

(i) The final repayment date shall be extended from 10 December 2018 to 31 March 2020;

(ii) In the period until the Final Repayment Date, the Company shall not be obliged to repay/depreciate the credit on a scheduled basis;

(iii) During the entire financing period, the Company will use the limits of working capital credits under the Credit Agreement up to the amount of PLN 110,350,000, i.e. the total limits remaining after the repayment of PLN 104,000,000 of credits from the funds derived from the sale of Exact Systems S.A., of which the Company informed in its current report 62/2018; 

(iv) The interest rate on the Credit will be reduced to WIBOR 1M plus a margin of 100 bps on an annual basis payable on an ongoing basis and an additional 100 bps of margin payable only on the Final Repayment Date;

(v) All obligations concerning the maintenance of financial indicators at certain levels will be removed and existing financial indicators will be reported only for information purposes;

(vi) The Creditors agreed that until the moment of submitting a possible declaration on termination of the Credit Agreement to the Borrower, violations will not enable the Creditor to reduce, block or cancel the working capital loans made available.

(vii) The Creditors agreed to a refund of the Borrower's receivables due to the deferred payment of the selling price of Exact Systems, which should enable the Company to receive PLN 10,700,000 in liquidity if the deferred payment date is accelerated, of which the Issuer will inform in a separate current report;

(viii) The Creditors shall unconditionally and irrevocably revoke the existing breaches of the Agreement indicated in the Annex, waive their rights under the Credit Agreement resulting from the occurrence of such existing breaches, including the financial ratios specified in the Credit Agreement;

(ix) Work Service Czech s.r.o. will cease to be the guarantor of the credit. The following subsidiaries of the Borrower shall remain the guarantors of the Credits: “Finance Care” Sp. z o.o., “Industry Personnel Services” Sp. z o.o., “Antal” Sp. z o.o., “Work Express” Sp. z o.o., Support and Care Sp. z o.o., Sellpro Sp. z o.o. and Work Service Investments Sp. z o.o.;

(x) The creditors also agreed to restructure or refinance the bonds, including the establishment of security over the shares of the Czech company and Slovak companies from the Work Service Group.

At the same time, the Company undertook, in the Annex, to undertake a number of restructuring activities, including, among others, the following

(i) Restructuring or refinancing of bonds issued by the Issuer;

(ii) Update the business plan and develop an operational restructuring plan by 31 March 2019;

(iii) The sales process of Prohuman 2004 Kft. within the specified schedule, which the Company informed about the commencement of in its current report no. 52/2018;

(iv) Renegotiation of terms and conditions of some of the Company's liabilities due to credits, deferred payments or liabilities.

In the opinion of the Issuer's Management Board, the planned entry into force of the Annex will have a measurable and beneficial impact on the Issuer's financial standing, including liquidity. The Issuer's Management Board intends to complete this process by December 10, 2018. However, the Issuer's Management Board cautions that it is not certain that it will receive the required statements of factors regarding factoring limits and that the negotiations on the restructuring of bonds will be successful. The Issuer will inform in separate current reports about the results of its discussions and findings.

As a result of the analysis carried out, the Issuer concluded that it is justified to classify the information indicated above as confidential information within the meaning of Art. 17.1 of the MAR, subject to publication in the form of this report.

Legal basis:

art. 17 sec. 1 MAR (Regulation of the European Parliament and of the Council (EU) NO. 596/2014 of 16 April 2014 on the Market Abuse and repealing the Directive 2003/6/EC of the European Parliament and of the Council 2003/124/EC, 2003/125/EC i 2004/72/EC).

Signatures:

Maciej Witucki - President of the Management Board

Tomasz Ślęzak - Vice-President of the Management Board