Ciech SA Senior Loan

cancelled

Translated version of this PSD: Polish The EBRD is considering providing a senior secured loan in Euro equivalent to PLN 300 million to CIECH S.A. (“CIECH”, “the Company”) along with leading commercial banks in Poland. This is going to be a part of a broader financing and restructuring package, including equity capital in the form of rights issue and provision of long term financing to the Company. The proceeds of EBRD financing will be utilised among others for energy efficiency (EE)/ and environmental capex. The transition impact of the project is expected to arise from demonstration of successful restructuring in the chemical sector in Poland, which is in the process of restructuring on the operational, technological and strategic level, in order to improve efficiency and management quality. EBRD’s financing would strongly support CIECH’s management efforts to implement a restructuring programme based on operational restructuring. The Project will also support energy efficiency investments in the corporate sector. The EBRD’s involvement and the TC Energy Efficiency Audit will help to identify key areas for energy efficiency improvements that could reduce energy consumption and costs as well as carbon emissions. The involvement of the Bank through the team and the proposed TC assignment will assist in the implementation of the EE Management System (EEMS) at corporate level as well as at plant level for all facilities of the company. This will be a strategic investment and management tool for the company that will assist CIECH to approach international best practices, thus improving not only EE but also corporate governance. CIECH will be also required to apply the EBRD environmental standards and implement Environmental Action Plan. This is particularly important for heavy chemical sector in Poland. Since the majority of chemical companies in Poland are state controlled, the Project will be an important demonstration for the chemical sector privatisation. CIECH is a leading Polish chemical company providing Soda (2nd largest company in Europe), Organics, Agro-chemicals and Inorganic products. Since 2005 it is listed on Warsaw Stock Exchange and with annual revenue worth approx. PLN 3.7 billion it is among top one hundred enterprises in Poland. Up to PLN 300 million Euro equivalent in the form of a senior secured loan. PLN 1.9 billion Categorised B. The Project, a corporate loan to a multi-site operation requires a corporate environmental audit in line with the Bank’s Environmental and Social Policy. The corporate environmental, health and safety audit of the Company's Polish, Romanian and German operations was undertaken by an international consultant. The findings of the Environmental and Social Due Diligence (ESDD) indicate that the Company is currently in compliance with existing legislation but will need to undertake significant investments to ensure ongoing future compliance, notably to comply with the Industrial Emissions Directive (IED) post 2016. The Bank's financing of the existing investment programme will allow for the Company to maintain future compliance and allow for substantial improvement in operations as well as environmental performance. A number of specific actions have been developed, among others, with respect to US Govora, the Romanian soda ash plant. The Consultants undertaking the ESDD has identified a number of additional investments as part of best industrial practice. These have mainly focused around Environmental, Health and Safety (EHS) management systems at the corporate level and have been included in the Environmental and Social Action Plan (ESAP). The Company has developed an action programme to manage past liabilities and financial provisions are reviewed on a regular basis. The Company has recently diversified GZNF Fosfory and plans exist for the future divestiture of Alwernia plant. Therefore the agreed ESAP does not include the GZNF Fosfory plant, however, a number of actions with respect to Alwernia have been included. The current investment programme of the company includes Environmental, Health and Safety upgrades as amongst others outlined in the Environmental and Social Action Plan. The Bank will monitor the implementation of the ESAP, and a regular audit will be undertaken every 3 years of the Company by an independent consultant as part of project implementation. The Company will also develop a publish a corporate annual EHS report as part of its Corporate Social Responsibility (CSR) programme and stakeholder engagement process. An Energy Audit was carried out that analysed the energy efficiency performance of the main plants and the company as a whole at corporate level in order to review energy efficiency investments, including the implementation of the EEMS. The Energy Audit was funded by the Bank’s SSF through the Regional Energy Efficiency Programme for the Corporate Sector, which was approved by TC COM on 11/3/09. The total value of the Programme is EUR 4,809,100. The total expenditure for this specific assignment was € 33,000. Krzysztof Grad Spokesman of the CIECH Chemical Group E-mail: spokesman@ciech.com Phone (+48 22) 639 13 18 Mariusz Babula Investor Relations E-mail: mariusz.babula@ciech.com Phone (+48 22) 639 14 81