Ellomay Capital Ltd. announces entry into a €35.9 Million project finance Agreement by Italian subsidiaries
The Facility Agreement was executed among Ellomay PV Two S.r.l, Ellomay PV Seven S.r.l., Pedale S.r.l., Soleco S.r.l and Tecnoenergy S.r.l (together, the “Subsidiaries“) and Mediocredito Italiano S.p.A (the “Lender“) and Intesa Sanpaolo S.p.A. (as account bank). The euro 35.9 million principal amount is divided into: (i) five term loan facilities, one for each Subsidiary, which are to be used to refinance the existing financing of the Subsidiaries and for general purposes of the Subsidiaries, in the aggregate amount of euro 33.7 million with terms ending in May 2028, and (ii) five revolving facilities, one for each Subsidiary, aimed to cover financial needs for the debt service coverage in case of Subsidiaries liquidity shortfall, in the aggregate amount of euro 2.2 million with terms ending in November 2027.
The loans provided under the Facility Agreement bear a semiannual interest rate equal to the Euribor 6 month rate plus a margin of 185 basis points. The Facility Agreement includes customary terms, including a default interest that will accrue a delay in payments, requirements to maintain financial ratios, various securities provided by the Subsidiaries and a pledge on the shares of the Subsidiaries and subordination agreement provided by Ellomay Luxemburg, our wholly-owned subsidiary and the parent company of the Subsidiaries. The Facility Agreement provides for a cross-collateralization mechanism among the Subsidiaries, whereby each Subsidiary shall guarantee each other’s obligations under the Facility Agreement and the other finance documents for a maximum guaranteed amount up to 180% of the relevant Subsidiary’s loan facility. In addition, the Company provided guarantees in connection with specific exposures, one in the amount of approximately euro 1.8 million (an amount that is gradually reduced to zero on January 1 of each of the years 2019-2021) and the second in amounts ranging between approximately euro 1.0 million up to a maximum of euro 1.5 million through the date the loans under the Facility Agreement are repaid in full.
The Facility Agreement provides that the Subsidiaries shall enter into interest swap agreements effective from the first repayment date of June 2018 for an amount equal to 75% of the overall amount of the term loan facilities. The Subsidiaries entered into the swap agreements on May 29, 2018 with respect to approximately Euro 25 million (with a decreasing notional principal amount based on the amortization table) until May 2028 , replacing the Euribor 6 month rate with a fixed 6 month rate of 0.71%, resulting in a fixed 6 month interest rate of 2.56%.
The Subsidiaries will use the funds borrowed under the Facility Agreement to repay outstanding loans and leasing agreements in the aggregate amount of approximately euro 13.2 million to be repaid upon drawdown.
Ran Fridrich, CEO and a board member of Ellomay commented: “This project finance agreement enables Ellomay to recycle existing debt at improved conditions, while leaving Ellomay with liquid resources for investment in the Talasol project that is in advanced stages towards financial closing.”