Stock Code: 000553(200553) Stock Abbreviation: ADAMA A (B) NO. 2024-52
ADAMA Ltd.
Announcement on New Credit Facility from the
Related Party
The Company and all members of the Company’s Board of Directors confirm that all
information disclosed herein is true, accurate and complete, with no false or misleading statement
or material omission.
I. Overview of the Related Party Transaction
The 33rd meeting of the 9th session of the Board of Directors of ADAMA Ltd.
(hereinafter referred to as the “Company”) and the 1st Interim Shareholders Meeting
in 2024 approved the Proposal on Credit Facility from the Related Party, according to
which Adama Fahrenheit B.V. (hereinafter referred to as "ADAMA NL"), an
indirectly wholly-owned subsidiary of the Company signed an Facility Agreement
with Syngenta Group (NL) B.V. (hereinafter referred to as "SG NL"), a subsidiary of
the Company's controlling shareholder, Syngenta Group Co., Ltd. (hereinafter
referred to as "SG"), and SG NL provided an amount of USD 200 million in favor of
ADAMA NL. For details, please refer to the Announcement on Credit Facility of USD
200 million from a Related Party (Announcement No.2024-24) disclosed on April 26,
2024 (the "Previous Credit Facility").
In order to meet the capital requirements for its operation and development, ADAMA
NL intends to apply to SG NL for a new credit line with an estimated amount of no
more than USD 200 million and sign a new facility agreement (the "Transaction").
Since SG NL and ADAMA NL are both controlled by Sinochem Holdings
Corporation Ltd. (hereinafter referred to as " Sinochem Holdings”), the Transaction
constitutes a related party transaction.
Among the five directors of the Company, the related-party directors, Mr. Qin Hengde
and Mr. Liu Hongsheng refrained from voting, while among the remaining votes of the
three directors, there were three (3) affirmative votes, and no negative votes and or
abstentions. The Transaction has been reviewed by the Specialized Meeting of
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Independent Directors of the Company and approved by all independent directors.
The Transaction requires the approval of the Company’s shareholders. SG will refrain
from voting.
The Transaction does not constitute a Material Assets Restructuring as stipulated by
the Administrative Measures on Significant Asset Restructuring of Listed Companies.
II. Introduction to the Related Party
SG NL was established in 2016. Its legal representative is Edwin Pool, and its
registered address is Westeinde 62, 1601BK Enkhuizen, The Netherlands. It has
registered capital of USD 2 and mainly undertakes the businesses related to holding
and financing activities. The main financial data as of December 31, 2023 is: operating
revenue of USD 0, net profit of USD 501,249,000, total assets of USD 638,658,000,
net assets of USD 10,827,000.
Related-party relationship: Both SG NL and ADAMA NL are controlled by Sinochem
Holdings, the ultimate controlling shareholder of the Company. SG NL is related party
of the Company in accordance with Item 2, Paragraph 2 of Article 6.3.3 of the Listing
Rules of Shenzhen Stock Exchange.
Analysis of contract performance capability: To the best of the Company’s knowledge,
SG NL operates normally and is in good operational condition. After searching on the
website of disclosure of enforcement information of China, it is not a debtor subject
to judicial enforcement.
III. Basic Information on the Target of the Related-Party Transaction
The Transaction is an engagement in a USD 200 million short-term annually revolving
credit facility, at 3-month CME Term SOFR Reference Rate + 1.55% plus a
commitment fee of 0.70% per annum on the undrawn amount (for the entire amount
of USD 400 million, including on the Previous Credit Facility), subject to the Facility
Agreement signed between the two parties.
IV. Pricing Basis of the Related-Party Transaction
The Transaction is made on the principles of voluntariness, equality, mutual benefit,
justice and fairness. The terms of the Transaction were negotiated fairly on the basis
of market practice.
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V. Main Contents of the Facility Agreement
Contract Name: Facility Agreement between Adama Fahrenheit B.V. and Syngenta
Group (NL) B.V.
Borrower: Adama Fahrenheit B.V.
Lender: Syngenta Group (NL) B.V.
Main Terms: annually revolving credit facility in the aggregate amount of USD 200
million (on market terms), at 3-month CME Term SOFR Reference Rate + 1.55%
plus a commitment fee of 0.70% per annum on the undrawn amount (for the entire
amount of USD 400 million, including on the Previous Credit Facility).
Both parties may assign their rights and obligations under the Facility Agreement to
another entity within their respective group according to the terms of the Facility
Agreement.
Effective Date of the Agreement: following the approval of the Parties’ requisite
organs, as required. The requisite organs of the Company will review the terms of this
Agreement every three years.
Dispute Resolutions: Any controversy or claim that fails to be solved amicably shall
be finally submitted to the competent courts of Amsterdam under the laws of
Netherlands.
VI. Purpose of the Transaction and Its Impact on the Company
The Transaction expands and efficiently utilizes the Company's and its subsidiaries
funding sources with additional facilities providing an additional cash source not
included in bank covenants, and further supports the Company’s ongoing working
capital needs. The Facility Agreement follows the general practice of similar
transactions in the market and doesn’t contain unfair terms. The Transaction will not
adversely affect the interests of the Company and its non-related party shareholders,
nor will it affect the independence of the Company.
VII. Status of the Different Kinds of Related Party Transactions between the Company
and Sinochem Holdings
The related party transactions between the Company and subsidiaries of Sinochem
Holdings are as follows:
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1. As of June 30, 2024, the occurred amount of related party transactions with
subsidiaries of Sinochem Holdings in the ordinary course of business is around RMB
1,335.25 million. The estimated related party transaction amount in the ordinary course
of business approved by the 2023 annual shareholders meeting is RMB 4,143.71
million.
2. The Company and its subsidiaries’ Deposits and Loans in the Finance Company:
As of the date of this announcement, the balance of deposits remains RMB 379.79
million and USD 2.14 million, and the loan amount is RMB 50 million, which have
been approved by the 1st Interim Shareholders Meeting in 2022.
3. The 33rd meeting of the 9th session of the Board of Directors approved the Proposal
on Credit Facility from the Related Party according to which SG NL shall enter into
an Facility Agreement and provide an amount of USD 200 million credit facility in
favor of Adama NL, and the transaction has been approved by the 2024 1st Interim
Shareholders Meeting.
4. The 3rd meeting of the 10th session of the Board of Directors considered the Proposal
on the Purchase of Liability Insurance for Directors, Supervisors and Senior
Executives and the Related-party Transaction, according to which the Company will
purchase a Directors and Officers liability insurance policy by way of adding the
Company to the Directors and Officers liability insurance policy of SG, and the
transaction has been approved by the 2024 2nd Interim Shareholders Meeting.
VIII. Independent Directors’ Prior Approval
The Company’s Specialized Meeting of Independent Directors approved the
Transaction, and the independent directors have given approval opinions on the
Transaction: The Transaction is based on the funding needs of the Company and is normal
business operations. The Transaction conforms to relevant national laws and regulations,
as applicable, and market-oriented principles, and will not impact the independence of the
Company or harm the interests of the Company and its other shareholders. The decision-
making procedures for the Transaction conform to the Company Law, the Rules of
Shenzhen Stock Exchange for the Listing of Stocks, the Articles of Association of the
Company and other laws and regulations. Therefore, the independent directors pre-
approved the Transaction and agree to submit it to the Board of Directors.
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IX. Documents for Future Reference
1. The resolutions of the 7th Meeting of the 10th Session of the Board of Directors of the
Company.
2. The resolutions of the Specialized Meeting of Independent Directors.
It is hereby announced.
The Board of Directors of ADAMA Ltd.
November 7, 2024
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