ANNUAL REPORT 2011 REGISTRATION DOCUMENT - Saft

17.2 PUBLIC GRANTS RELATED
TO RESULTS
6
2011 CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
Public grants related to results, i.e. grants other than those
related to assets, are recorded in income as a deduction from
the expenses to which they relate.
Most of the grants from the State of Florida and the City of
Jacksonville are grants related to results. Spread over several
NOTE 18 DEBT
18.1 DESCRIPTION AND CHANGE
IN GROUP INDEBTEDNESS
On 3 July 2009, the Company fi nalised the refi nancing of its
bank debt with a consortium of six credit institutions. The main
aim was to ensure the medium-term fi nancing of the Group’s
existing activities. The refi nancing consists of:
� two term loans of €150 million and $240 million
respectively. These loans have a three-year maturity (up until
2 July 2012) with repayment at the end of this period;
� a revolving credit facility of €33.5 million, also covering a
period of three years, with the possibility of making draw
downs on this facility in various different currencies. This
revolving credit facility was cancelled on 14 October
2011.
The initial margin was set at 275 basis points over Euribor for
euro loans and 300 basis points over Libor for the US dollar
loan. From 1 January 2010 onwards, the margin is calculated
on a half-yearly basis depending on the ratio of the Group’s
net debt to the Group’s consolidated EBITDA over the 12-month
period prior to the date when this margin is set. This margin
could therefore vary from 2.0% to 3.0% for euro facilities and
from 2.25% to 3.25% for the US dollar facilities.
In 2011 the margin was 2.00% on the euro loan and 2.25%
on the dollar loan.
The fi nancing agreement comprises a certain number of the
usual provisions contained in this type of agreement.
Sales and acquisitions made by the Group are thus subject to
a certain number of usual conditions. Similarly, any additional
loan contracted by the Group for an amount of over €90 million
is subject to contractual limitations.
The agreement contains change of control clauses concerning
the Company, enabling each lender to request early repayment
of the share of the credit facilities that it granted.
fi nancial periods (of up to ten years), this aid will mainly
lead to a reduction in operating expenses for the Jacksonville
production facilities in future years. In consideration of these
grants, the Company has to comply with a certain number of
commitments primarily related to job creation and a minimum
level of average salaries.
Public grants related to results recorded in 2011 in respect of
the Jacksonville project amounted to €6.2 million ($8.5 million).
The guarantees given under these agreements remain limited
to surety bonds (or equivalent guarantees) from some Group
companies, in compliance with the legal provisions in force.
Finally, pursuant to the agreement, the granting and continuation
of the loans is conditional upon meeting certain fi nancial ratios:
� maximum leverage ratio (net fi nancial debt to EBITDA):
3.00 (for each 12-month period ending 30 June and
31 December of each year) with a maximum of 2.80 for
each 12-month period ending 31 December 2011 and
30 June 2012; and
� minimum interest coverage ratio (contractually defi ned
EBITDA to total net interest): 4.50 (for each 12-month
period ending on 30 June and 31 December).
At 31 December 2011, the Group’s gearing ratio, calculated
according to the contractual terms and conditions, amounted
to 0.54 (compared to 1.24 at 31 December 2010) and
the interest coverage ratio to 12.1 (compared to 9.3 at
31 December 2010).
Finally, the Group has committed to providing the lenders with
certain periodic information such as its audited consolidated
annual fi nancial statements within 120 days of each fi nancial
year-end, as well as its consolidated interim fi nancial statements
within 90 days of the close of each six-month period.
The Group has already embarked upon the process of
refi nancing that part of its bank debt due to expire on
2 July 2012 and is confi dent that it will be able to fi nalise this
refi nancing at acceptable conditions prior to end of Q1.
The portion of current bank debt held as non-current borrowings
at December 31, 2011, amounting to €100 million, is the part
of the euro bank debt being refi nanced under similar conditions
to those applying to current bank debt, and being refi nanced
with counterparties participating in the existing bank debt.
SAFT - ANNUAL REPORT 2011 / 163