On 31 July 2013 TAURON Polska Energia and Bank Gospodarstwa Krajowego (Poland’s state-owned bank) signed agreement for arrangement and underwriting of a PLN 1 bn worth bond issue.
The purpose of the bond issue is to finance investment expenditures related to execution of TAURON Group’s development strategy until 2020.
To date the TAURON Group cooperated with commercial banks and multilateral institutions such as European Investment Bank or European Bank for Reconstruction and Development to provide long-term financing for its investments. Now, Bank Gospodarstwa Krajowego joined that group.
– This is the first agreement of this kind signed with Bank Gospodarstwa Krajowego, which means that the range of financial institutions cooperating with the TAURON Group includes now yet another significant entity – said Dariusz Lubera, CEO at TAURON Polska Energia. – The funds acquired from the bond issue will be used to implement the Group’s long-term development strategy. Under the strategy we plan to execute investments related to, among others, construction of new generation units, upgrading and restoration of distribution grid and increasing output capacity of our mining plants – he added.
– The agreement signed today is an example of how Bank Gospodarstwa Krajowego, which is a development bank, helps stimulate the economy – said Dariusz Kacprzyk, acting CEO of BGK. – The bond issue for TAURON Polska Energia is unprecedented in terms of the scale of BGK’s involvement in a single company. By providing funds to one of the key companies from the power sector we implement the Polish Investments Program whose aim is to maintain the level of investments’ dynamics in Poland – he added.
The bonds will be underwritten, i.e. the program’s underwriter (Bank Gospodarstwa Krajowego) will be obliged to purchase the bonds issued by the company, and the maximum maturity of the bonds will be 15 years. The structure of financing provides bond issue in series in the years 2013-2015 and repayment in equal installments from 2019 to 2028. Bank Gospodarstwa Krajowego is the arranger, underwriter and depository in this program.
– Acquisition of funds with long-term repayment term is an effect of implementation of TAURON Group’s capex financing plan developed in December 2012 which stipulates optimized use of funding sources available at a given moment in terms of all: cost, flexibility and maturity – said Krzysztof Zawadzki, CFO at TAURON Polska Energia. – The longer then currently applied term of financing achieved by TAURON Polska Energia is very favorable and tailored to meet the Group’s needs as it extends weighted average maturity of the debt portfolio and through diversification guarantees its stability, at the same time being better suited to long periods of investment yields that are common in the power sector – he added.
According to the Group’s business model, the issuer is responsible for acquisition of funds for TAURON Group’s subsidiaries.
