JPMorgan - KASE
JPMorgan - KASE JPMorgan - KASE
Description of Certain Financing Arrangements The following summary of certain provisions of our new Term Facility and the intercompany loan does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the provisions of the underlying documents. New Term Facility On January 2, 2003, HKM entered into the Term Facility with a $225 million maximum aggregate principal amount with a consortium of European banks, comprising Natexis Banques Populaires, BNP Paribas and ING Bank. As of February 7, 2003, HKM had drawn $190 million under this facility. HKM will have the option to draw down an additional $35 million, subject to approval and the ability of the consortium of banks to fully syndicate the Term Facility. In December 2002, HKM also repaid in full a previous export loan for its remaining outstanding amount of approximately $52 million. The principal terms of the new Term Facility are as follows: Interest Rates and Fees Borrowings bear interest at a floating rate based upon LIBOR plus a 3.25% margin. HKM has paid certain up-front and agency fees in connection with the Term Facility. Guarantees and Security Hurricane and Hurricane Marketing Limited have irrevocably and unconditionally guaranteed the repayment of amounts borrowed under the Term Facility. In addition, HKM has agreed to cause HOP to provide a similar guarantee within three months of January 2, 2003. The loans under the Term Facility are secured by certain crude oil export contracts between HKM and different offtakers and hedging agreements, which may be assigned to the facility agent from time to time, and by a certain bank accounts into which proceeds from such agreements are deposited from time to time. Covenants The Term Facility contains certain negative covenants customary for such financings, that restrict the borrowers (subject to certain agreed exceptions) from, among other things, engaging in certain mergers or consolidations, incurring additional debt, creating security interests on their assets and disposing of assets other than in the ordinary course. The Term Facility further requires us to observe certain customary affirmative covenants, including, but not limited to, covenants relating to maintenance of minimum available free cash, funding of a debt service reserve account, the provision of information, compliance with law and line of business. In addition, under the Term Facility we are subject to certain financial covenants that require us to maintain our ratio of export proceeds to debt service under the Term Facility at a level of at least 1.5:1, our ratio of EBITDA (as defined) to finance charges at a level greater than 5:1, and our ratio of consolidated net debt to EBITDA (as defined) at a level not greater than 3:1. Maturity and Amortization Loans under the Term Facility will mature on December 29, 2006. We are obligated to repay the principal amount of loans under the Term Facility in 42 equal monthly installments beginning on July 31, 2003. Depending on the level of Brent crude oil prices, we may receive credit for certain prepayments under the Term Facility toward up to 65% of these mandatory repayment obligations. 94
Prepayments HKM may voluntarily prepay loans under the Term Facility at any time after February 3, 2003 without penalty in minimum amounts of $5.0 million. In addition, we may prepay loans under the Term Facility in certain other limited circumstances. In the event that Brent crude oil prices exceed a certain level on or after July 2, 2003, HKM is required on a monthly basis to mandatorily prepay loans under the Term Facility by an amount equal to aggregate export quantities for the month times the difference between the actual average Brent crude oil price for the period and that specified level. Events of Default The Term Facility contains customary events of default (including cross default, material adverse change and change of ownership), the occurrence of which would allow the lenders to accelerate all outstanding loans and terminate their commitments. Many of these events of default include grace periods. Intercompany Loan On the issue date, HKM, as borrower, will enter into an intercompany loan agreement with the issuer, as lender, pursuant to which the issuer will agree to make available to HKM the intercompany loan. The loan amount will be equal to the proceeds to us from the sale of the notes. The intercompany loan will bear interest of the same rate as the notes bear interest plus the necessary spread as required under Dutch tax laws. Interest will be payable in same day funds two business days prior to each date on which interest is payable on the notes and will be payable to such account or accounts with such person or persons as the issuer may designate to HKM. The maturity date will be the date on which the notes mature. HKM’s obligation under the intercompany loan will not be subordinated to any indebtedness. All payments under the intercompany loan will be made without deductions for or on account of tax. In the event that HKM is required to make any such deduction, it will be required to gross-up each payment to the issuer to ensure that the issuer receives and retains a net sum equal to the sum which it would have received had no such deduction or withholding been made or required to be made. Further, all payments under the intercompany loan agreement will be made on a timely basis in order to ensure that the issuer may satisfy its payment obligations under the indenture and the notes when due, in each case, taking into account the administrative and timing concerns and limitations on making payments due on the notes. 95
- Page 53 and 54: The increase in FCA differentials p
- Page 55 and 56: In addition, we incurred production
- Page 57 and 58: plan. The CCAA plan was implemented
- Page 59 and 60: Royalties Royalties increased from
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- Page 67 and 68: Š refurbishing and recommissioning
- Page 69 and 70: The daily business of Kazgermunai i
- Page 71 and 72: Kumkol North. We have a 50% interes
- Page 73 and 74: are currently five producing wells.
- Page 75 and 76: Estimated Reserves and Present Wort
- Page 77 and 78: The following table sets forth a re
- Page 79 and 80: The following tables show our avera
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- Page 83 and 84: price we paid for the shares of HKM
- Page 85 and 86: expenditures or investments. The ag
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- Page 89 and 90: In addition, we have opened new rou
- Page 91 and 92: On January 8, 2003, the President o
- Page 93 and 94: As a result of these discussions, H
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- Page 99 and 100: approved by our shareholders in Nov
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- Page 109 and 110: will also (i) make such withholding
- Page 111 and 112: The Change of Control Offer will re
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- Page 115 and 116: (a) no Default or Event of Default
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- Page 125 and 126: (2) reduce the rate of interest on
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- Page 131 and 132: issue date of the Notes within the
- Page 133 and 134: Exchange of Global Notes for Defini
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- Page 145 and 146: or is liquidated into, the Company
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Prepayments<br />
HKM may voluntarily prepay loans under the Term Facility at any time after February 3, 2003<br />
without penalty in minimum amounts of $5.0 million. In addition, we may prepay loans under<br />
the Term Facility in certain other limited circumstances. In the event that Brent crude oil prices<br />
exceed a certain level on or after July 2, 2003, HKM is required on a monthly basis to mandatorily<br />
prepay loans under the Term Facility by an amount equal to aggregate export quantities for the<br />
month times the difference between the actual average Brent crude oil price for the period and<br />
that specified level.<br />
Events of Default<br />
The Term Facility contains customary events of default (including cross default, material adverse<br />
change and change of ownership), the occurrence of which would allow the lenders to accelerate<br />
all outstanding loans and terminate their commitments. Many of these events of default include<br />
grace periods.<br />
Intercompany Loan<br />
On the issue date, HKM, as borrower, will enter into an intercompany loan agreement with the<br />
issuer, as lender, pursuant to which the issuer will agree to make available to HKM the<br />
intercompany loan. The loan amount will be equal to the proceeds to us from the sale of the<br />
notes. The intercompany loan will bear interest of the same rate as the notes bear interest plus<br />
the necessary spread as required under Dutch tax laws. Interest will be payable in same day funds<br />
two business days prior to each date on which interest is payable on the notes and will be<br />
payable to such account or accounts with such person or persons as the issuer may designate to<br />
HKM. The maturity date will be the date on which the notes mature. HKM’s obligation under the<br />
intercompany loan will not be subordinated to any indebtedness.<br />
All payments under the intercompany loan will be made without deductions for or on account of<br />
tax. In the event that HKM is required to make any such deduction, it will be required to gross-up<br />
each payment to the issuer to ensure that the issuer receives and retains a net sum equal to the<br />
sum which it would have received had no such deduction or withholding been made or required<br />
to be made. Further, all payments under the intercompany loan agreement will be made on a<br />
timely basis in order to ensure that the issuer may satisfy its payment obligations under the<br />
indenture and the notes when due, in each case, taking into account the administrative and<br />
timing concerns and limitations on making payments due on the notes.<br />
95
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