The management board of the company has signed an addendum to the existing loan agreement with the European Investment Bank (EIB)
The EU bank brings its available support to PLN 1.34 billion (approximately €297 million) to facilitate KGHM’s investment plans in state-of-the-art technologies and decarbonisation programmes
KGHM has consistently implemented the company’s Financial Stability Strategy and continues its efforts to base the capital group’s financing structure on long-term instruments
The rapid changes in the market caused by the COVID-19 pandemic do not prevent firms from implementing investment plans. The largest European copper producer, Polish-based KGHM Polska Miedź S.A. (KGHM), has entered into an agreement (annex) with the European Investment Bank (EIB) for an additional loan of PLN 440 million (approximately €98 million) to finance the modernisation plan of its plants and production processes.The amendment complements the existing loan of PLN 900 million signed at the end of 2017, bringing the potential EIB financing under the agreement to PLN 1.34 billion (approximately €297 million).
“In line with the company’s adopted strategy, we optimise our funding, focusing on efficiency and flexibility. The annex signed today increases the amount of funding provided to PLN 1.34 billion and proves our business credibility. This additional amount will constitute a potential reserve that can be used to finance our investment projects aimed at ensuring environmentally-friendly, safe and stable production," said Marcin Chludziński, Chairman of the Board of KGHM Polska Miedź S.A.
Andrzej Kensbok, Vice-President of KGHM for Finance, said that the transaction confirmed the good relationship between the company and the market and was part of the national financial policy. “The flexibility of the funding structure translates into a solid performance by KGHM. We are following global trends and on this basis we anticipate our further development. This allows for investment objectives, including optimisation of production processes,” added Vice-President Kensbok.
Global trends in sustainable development and climate action are based on applications that use copper and its unique properties as a raw material. These sectors include renewable energy and electric vehicles. EIB Vice-President Teresa Czerwińska, who oversees EIB activities in Poland, commented: “The EIB is positively increasing the long-term financing of the largest European copper producer in order to facilitate the company’s programme to modernise its production. The investment plans of KGHM will contribute to ensuring a sustainable and competitive supply of essential raw materials, in particular copper and silver. These metals are widely used in many industries and technologies. Sustainable access to raw materials, including copper, is essential to ensure the green and digital transformation of our economies. This is in line with the long-term objectives of the EIB’s lending policy.”
The additional loan amount is available for 22 months. The financial support can potentially be used in up to four tranches, each of which is at least equivalent to PLN 110 million. For each of the loan tranches, the company has the option to choose the currency: PLN or USD or EUR and fixed or variable interest rates. The other terms of the contract will not be substantially altered and will be consistent with the standard terms and conditions for this type of transaction.
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