Item 1.01 - Entry into a Material Definitive Agreement.
In support of the payment obligations of KFPC under the Loan Agreement, the Guarantor has agreed to act as guarantor for KFPC and to be jointly and severally liable with KFPC for payment of an amount equal to fifty percent (50%) of any and all indebtedness payable by KFPC under the Loan Agreement (with FPCC acting as guarantor of the other fifty percent (50%) of indebtedness).
Assuming the entire amount available under the Loan Agreement were borrowed by KFPC, if the Guarantor became obligated to repay the indebtedness of KFPC under the Guarantee Agreement, the Guarantor would owe an amount equal to NTD 2.75 billion, or approximately USD
Certain Covenants and Undertakings.
The Guarantee Agreement contains negative covenants that restrict the operations and business of the Guarantor, including, among other things and subject to certain exceptions: (i) limitations on mergers and consolidations; (ii) limitations on sales of assets; (iii) limitations on investments; (iv) limitations on guarantees outside the ordinary course of business; and (v) limitations on loans to third parties.
Additionally, the Guarantee Agreement contains a number of affirmative covenants, including, among other things: (i) permission for certain inspections of the books and records of the Guarantor; (ii) the delivery of financial statements and other reports; (iii) the preservation of existence; (iv) the maintenance of insurance; (v) the maintenance of ownership and control of KFPC; and (vi) continued ownership of at least fifty-one percent (51%) of the consolidated assets of the Kraton group.
The Loan Agreement.
KFPC has entered into the Loan Agreement (1) to provide additional funding to construct KFPC's 30 kiloton HSBC facility in
The loans under the Loan Agreement are available under a Tranche A facility or a Tranche B facility. The Tranche A facility is comprised of a medium-term loan facility in the maximum amount of NTD 4.29 billion to be made available in installments or in whole on a non-revolving basis exclusively for the support of KFPC's capital expenditures. The Tranche B facility is comprised of a medium-term loan facility in the maximum amount of NTD 1.21 billion to be made available in installments or in whole on a non-revolving basis exclusively for KFPC's working capital and/or general corporate purposes. The initial term of the Tranche A and Tranche B facilities shall be five years from the date of the first drawing of loans under either facility. To the extent that the first drawing under the facilities has not occurred within six months from the date of the Loan Agreement, the term of the Tranche A and Tranche B facilities shall be five years from the expiry day of such six-month period. Subject to certain conditions, KFPC can request a two-year extension of the term of the Loan Agreement.
The total outstanding principal amount of each Tranche shall be repaid in six semi-annual installments with the first payment due upon the expiry of a thirty-month period commencing on the first drawdown date and each subsequent payment due every six months thereafter. The first five installments shall be in an amount equal to 10% of the outstanding principal amount of each Tranche and the final installment shall be in an amount equal to the remaining 50% of the outstanding principal amount of each Tranche. In the event the extension period is granted, the final 50% of the outstanding principal amount of each Tranche shall be repaid in five equal semi-annual installments.
The Loan Agreement is subject to a variable interest rate composed of a fixed 0.8% margin plus the secondary market fixing rate in
Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.