Hungarian geothermal heat company PannEergy secures long-term refinancing

PannErgy secures long-term refinancing for bank loans PannErgy Plc. hereby informs capital market players that its member companies implementing the Györ and Miskolc Geothermal Projects — namely DD Energy Kft., Arrabona Koncessziós Kft., Miskolci Geotermia Zrt. and Kuala Kft. — as borrowers and providers of collateral have entered into a HUF 11 billion financing agreement with the banking consortium comprising UniCredit Bank Hungary Zrt. and CIB Bank Zrt. As part of the financing agreement, other member companies of the PannErgy Group were also involved in the transaction as providers of collateral.

As a result of the financing transaction, a loan portfolio of HUF 9.5 billion (EUR 28.7 million) in total of the PannErgy Group — maturing in the short and medium term and with a substantial balloon — has been refinanced with a 10-year long-term loan, thereby ensuring the Group’s predictable and economical financing in the long run. The remainder of financing can provide coverage for investment and project needs arising in the near future, while also representing a stable financial background in the new economic and operating environment that has come about as a result of the COVID-19 pandemic.

The refinancing was implemented from the FGS Go! (NHP Hajrá) scheme launched by the MNB at a value of HUF 8.25 billion (EUR 25m). The remaining HUF limit of 2.75 billion (EUR 8.3m) was denominated and drawn down in EUR. FGS loans have fixed interest for the entire loan term, while the remaining loan parts have variable interest. For the latter, the Company concludes interest rate swap transactions to hedge interest rate risk in the long run.

As a result of refinancing, the Group’s consolidated debt servicing obligation drops by approximately HUF 200 million (EUR 604,000) per year. The refinancing was realised this day with the disbursement of credit limits.

Source: Company release