The shareholders of CEZ distribution approved EUR 116m EBRD financing

The shareholders of CEZ Distribution authorised the Management Board to sign a loan agreement with EBRD for a total value of EUR 116m. The financing would be provided by EBRD directly and by SG Express Bank and BNP Paribas, indirectly through EBRD. The financing would be split in 2 parts – a 7-year term loan for up to EUR 98m, which would be used for financing of the investment program of CEZ Distribution and for acquisition of energy facilities, and a 3+2+2 years revolving credit facility for up to EUR 18m, which would be used for working capital needs. The interest rates of the loan and the credit facility would be 6-month EURIBOR plus 1.35% and plus 1.60%, respectively. The terms of the contract include that CEZ Distribution would not be able to establish collateral, distribute dividends, or change its capital without EBRD’s prior consent. It should be clarified that the acquisition of energy facilities, which would be funded by the term loan, is a mandatory obligation for CEZ Distribution. The company estimated the total value of these acquisitions at EUR 144m for the 5 years regulatory period, which started in July 2015. Please note that the acquisition of these facilities should lead to higher revenue from new connections, whereby it is likely to have a positive effect on the profitability.