ANNUAL REPORT 2011 REGISTRATION DOCUMENT - Saft

8
INFORMATION ABOUT THE COMPANY AND ITS SHARE CAPITAL
Signifi cant contracts and commitments
8.4 SIGNIFICANT CONTRACTS AND COMMITMENTS
8.4.1 CREDIT FACILITIES
On 3 July 2009, a syndicate of banks provided new debt
facilities for Saft Groupe SA and various Group companies
comprising a fi xed term, non-renewable loan composed of two
tranches of €150 million and $240 million respectively, and
a multicurrency revolving credit facility in a maximum amount
of €33,5 million. Main provisions of the new facilities are
described in Note 18 of the 2011 Consolidated Financial
Statements within this Annual Report.
8.4.2 A MULTI-YEAR CONTRACT WITH
THE US DEFENCE LOGISTICS
AGENCY (DLA)
On 16 July 2008 Saft America Inc. signed a major multi-year
contract with the US Defence Logistics Agency (DLA) to supply
the US Army, Navy, Air Force and Marine Corps with BA5590
lithium sulfur dioxide (Li-SO2) batteries. The terms of the
contract include Li-SO2 batteries for several portable military
applications such as communications and electronics systems.
This contract was awarded to Saft for 100% of the US military
needs for this type of battery. The contract with DLA is an
indefi nite quantity contract with a two-year base period for an
amount of up to $64 million and three one-year option periods
for a total contract value of up to $170 million. Orders under
the contract are placed by the customer as needed.
This contract maintains Saft’s position as the leading supplier of
lithium batteries to the US Army. The contract will be supplied
from Saft’s Valdese NC facility that has been the leading
supplier of these types of military batteries since the 1980s.
8.4.3 CONTRACT WITH THE
US DEPARTMENT OF ENERGY
On 1 st December 2009, Saft America Inc. signed a contract
with the US Department of Energy, by which it will receive
a cost-sharing subsidy representing 50% of the cost for a
maximum amount of $95.5 million under the provisions of the
Federal American Recovery and Reinvestment Act (ARRA). The
grant will support the funding of the construction, in Jacksonville,
Florida, of a manufacturing plant to produce advanced lithiumion
cells and integrate lithium-ion batteries for renewable
energy storage, telecommunication networks markets, as well
as aviation and military markets.
8.4.4 JOINT VENTURES
ASB group
One of Saft’s subsidiaries is a party, with EADS France, to
a shareholder agreement renewed in 2006 and governing
an equal shareholding in ASB, a company mainly engaged
in the manufacture of thermal batteries for military uses. The
agreement provides that in the event of a change of control of
either of the two ASB shareholders, the other will dispose of a
purchase option for all the shares in the joint venture held by the
shareholder subject to the change of control. In this event, and
in the absence of any other agreement between the parties,
the price would be determined by an expert designated in
accordance with section 1843-4 of the French code of civil
law.
Johnson Controls-Saft
The Group’s 49% stake in the joint venture created in 2006 to
meet the needs of the market for hybrid and electric vehicles
was sold to Johnson Controls Inc. on 30 September 2011.
8.4.5 UNDERTAKINGS MADE TO FRANCE
AND ISRAEL
By letter dated 11 December 2003 and in the context of
Alcatel’s sale of the Saft Group to the Doughty Hanson
Funds, Tadiran, the Company’s Israeli subsidiary, provided
an assurance to the Israeli Minister of Defence (MOD) that it
would preserve the confi dentiality of any information relating
to MOD orders for batteries classifi ed under the provisions of
the Israeli Security Directorate. Tadiran also undertook that its
general manager would remain an Israeli citizen subject to strict
security clearance. Any change in the control of Tadiran must
be notifi ed to the MOD and requires the prior authorisation of
the Chief Scientist’s Offi ce and the Investment Centre of the
Israeli Ministry of Industry and Commerce.
Given the products that are the subject of these commitments,
Saft does not expect the effect of the commitments to have
a signifi cant negative impact on the fi nancial situation of the
Group.
On 4 May 2005 the French government signed an agreement
with the Company, applicable for ninety years, under which the
Company undertook to retain its Group general management
and associated functions in France. The Company provided
certain other assurances and guaranteed the proper
performance by its French subsidiaries of its direct or indirect
SAFT - ANNUAL REPORT 2011 / 199