Corral Petroleum Holdings AB (publ) Business Update ... - Preem

(v)for the financial year ending December 31, 2015, SEK 894 million.Any unutilized balance of permitted capital expenditure in any financial year may be carried forward for onefinancial year only.The New Credit Facility also contains other restrictions and prohibitions that prevent Preem from making anydistribution, or declaring or paying any dividend other than as described below.In addition, the New Credit Facility also requires Preem to provide a hedging policy with respect to the price risk inits inventory norm position by the later of 30 days following the Closing Date and 30 September 2011. Such policy must beimplemented by Preem by no later than 28 February 2012.Restrictions on Upstreaming of CashPreem may not make any distribution or declare or pay any dividend whatsoever unless permitted pursuant to theterms of the New Credit Facility.At any time, Preem is permitted to make group tax contributions (Sw: Koncernbidrag) to the Issuer by way ofdividend, provided that such amount is funded by way of equity contribution or a subordinated loan and that it is effected byaccounting entries only and not by movement of cash. Preem is also permitted to pay administrative costs of the Issuer up toa maximum amount of $500,000 in any calendar year.At any time following payment of all arrangement fees under the New Credit Facility, subject to minimum liquidityrequirements of $100 million and provided that no event of default is outstanding under the New Credit Facility, Preem ispermitted to make a distribution, dividend or payment to Corral Petroleum Holdings to allow for the payment of cash-payinterest on any new notes issued in a refinancing up to a maximum of 4% per annum.At any time following payment of all arrangement fees under the New Credit Facility, subject to minimum liquidityrequirements of $200 million and provided that (i) the term loan facility has been repaid in full (ii) all fees due under the NewCredit Facility have been paid (iii) the Total Net Debt (as defined in the New Credit Facility) to consolidated EBITDA ratiohas been equal or below 4.0x for two successive quarters and would not be breached on a pro forma last twelve months basisafter making the payment and (iv) no event of default is outstanding, Preem is permitted to make a distribution, dividend orpayment to the Issuer for any purpose.The aggregate of dividends, payments or other distributions out of Preem to the Issuer from the Closing Date to thematurity date of the New Credit Facility (other than with respect to group tax contributions) shall not exceed 100% of the netincome of Preem arising after the Closing Date.Requirement to Prepay New Credit FacilityIn addition to mandatory prepayment upon a change of control, sale of assets, receipt of insurance proceeds orillegality, which are typical provisions in an agreement of this nature, subject to minimum liquidity requirements of $200million (after making the payment) and for so long as amounts remain outstanding under the term loan facility, Preem mustprepay credits under the New Credit Facility with a certain percentage of its excess cash flow for each financial year asfollows: (i) 100% until $90 million has been applied in prepayment of the facilities pursuant to the cash sweep provisions; (ii)75% until an amount no greater than $400 million is outstanding under the term loan facility and (iii) 50% at any timethereafter. Preem is also required to prepay credits under the New Credit Facility, in order to remedy any breach of certainborrowing base limitations.Events of DefaultThe New Credit Facility contains various standard events of default (subject to customary materiality thresholds andin certain cases, remedy periods), including, without limitation, for non-payment, for any breach of the financial or othercovenants, misrepresentation, nationalization, material litigation, cross default to other indebtedness and any amendments toany new notes issued in a refinancing such that they would fail to comply with certain agreed parameters as well as upon anychange of control of Preem, the Issuer or its parent company Moroncha Holdings Limited.SecurityThe New Credit Facility will be secured by the following security package:(i)(ii)a pledge granted by the Issuer in respect of the shares in Preem;a pledge in respect of Preem’s receivables arising from goods and services supplied by Preem in the58