Kardan N.V.
Amsterdam, March 2, 2014
Immediate Report
KARDAN LAND CHINA TAKES ON ADDITIONAL CREDIT FOR EUROPARK DALIAN
Kardan (“Kardan” or “the Company”) announces the following:
1. On February 27, 2014, Kardan Land Dalian Ltd. (the “Project Company”), an indirectly wholly owned subsidiary of the Company (through Kardan Land China Ltd. ("KLC "), entered into an agreement with two banks in China which together form a syndicate (the “Syndicate") for an additional credit (“Financing Agreement”) with respect to the Europark Dalian project (the "Project"). The additional credit (Financing Agreement) of the Project Company combined with the existing loan has become a material loan for the Company and therefore is a "reportable credit" under Israeli regulations.
2. The Project Company already had a loan of RMB 500 million (approximately EUR 60 million, the “Original Loan”) from one of the banking institutions that comprise the Syndicate before signing the Financing Agreement, which entails that the Project Company obtained additional credit to the amount of RMB 400 million (approximately EUR 48 million) from the Syndicate (hereinafter together the "Credit").
3. Based on the initial duration of the original loan, the Credit is for a period of three years and seven months, until September 2017. The Credit (i.e. RMB 900 million) will be repaid as follows: RMB 225 million during the year 2015, RMB 360 million during 2016 and RMB 315 million during 2017. The interest to be paid is an annual interest at the PBOC rate (currently 6.4%) times 115% (7.36%). Interest payments are to be made quarterly and are not linked to any index. In addition, at the beginning of each year and for the term of the loan the Project Company will pay an annual fee on the expected average loan amount in that year at a rate of 30% of the PBOC rate (1.92%).
4. To secure the Credit, KLC provided a written commitment to comply with certain sales thresholds relating to the Project. According to this commitment KLC undertakes, subject to the needs of the Project and demands of the Syndicate, to further support the Project in the amount of RMB 200 million if the Project Company does not meet a certain sales target before the end of 2014. In addition, KLC provided a guarantee to the Syndicate that the Project Company will meet the terms of the Financing Agreement. Moreover, the Project Company will pledge in favor of the Syndicate the land on which the Project is built and the Project itself.
5. The financial covenants undertaken by the Project Company are as follows: - during the period of withdrawal of the loan amounts the ratio of total debt to total assets shall be no more than 75 % and the ratio of net assets to contingent liabilities shall be no more than 30 %, the curre6. Events entitling the Syndicate the right to demand immediate repayment of the Credit include, among others, situations where actual construction costs materially exceed the budget as well as a significant delay in construction.
7. Europark Dalian is a combined residential and commercial project, including a shopping centre (Galleria Dalian), two SOHO buildings (Small Office Home Office), two luxury apartment buildings and another building for residential units or offices and parking areas, over a built area of approximately 327,000 sqm in the city of Dalian in China. Overall 1,130 residential units are expected to be built on an area of 109,725 sqm and the Project will have 2,311 parking spaces to be used by the buildings’ residents and visitors of the shopping centre. Completion of the Europark Dalian shopping centre is planned for Q3 2014.nt ratio shall be at least one .