On December 20, 2016, CEELM reported that Inter Cars, an importer and distributer of automotive spare parts in CEE, obtained a loan facility from a consortium of banks. Jacek Piotrowiak, the General Counsel at Inter Cars, kindly agreed to share his experience managing the legal aspects of the deal.
CEELM: What projects at Inter Cars S.A. was the PLN 1.1 billion loan facility necessary for?
J.P: The PLN 1.1 billion loan facilities advanced to Inter Cars S.A. and our certain subsidiaries in Poland, Czech Republic, Slovakia, Romania, Lithuania, and Croatia received from a club of banks consisting of Bank BGZ BNP Paribas S.A., Bank Handlowy w Warszawie S.A., Bank Polska Kasa Opieki S.A., CaixaBank, S.A. (Spolka Akcyjna) Oddzial w Polsce, DNB Bank Polska S.A., ING Bank Slaski S.A., and mBank S.A. as mandated lead arrangers and Bank Polska Kasa Opieki S.A. as agent with mBank S.A. as the security agent, was used to refinance existing debt under the syndicated financing advanced to Inter Cars in 2009 and to finance our working capital needs. The new loan facilities also allow Inter Cars and its subsidiaries to utilize funds by way of overdrafts, guarantees, and letters of credit, under the so-called ancillary facility financing. This new financing will help expand our business in Poland and in Europe generally on more flexible terms than we had in the past.
CEELM: What, if any, were the challenges arising from the fact that the consortium of banks issuing the loan facility included banks from a multitude of jurisdictions?
J.P: We wanted to extend the line-up of financial institutions beyond the four of them that financed our business since 2009 and added Bank BGZ BNP Paribas S.A., CaixaBank, S.A. (Spolka Akcyjna) Oddział w Polsce, and DNB Bank Polska S.A. to the mix of our financiers. This move also helped enhance our ability to finance Inter Cars group by BNP Paribas, CaixaBank and DNB Bank outside Poland, where these institutions have strong presence. We were able to manage the relationship with seven financial groups well since from the outset of term sheet discussions we were quite open in terms of our business goals and found that these institutions were very upbeat about continued growth of our business and the direction we’re heading to.
CEELM: Why did you ask Norton Rose Fulbright for help on this loan?
J.P: We felt that Norton Rose Fulbright Warsaw offers the required experience in large scale syndicated financings in Poland and elsewhere in Europe. Also, its banking practice is well-respected among the banks. We also felt that Norton Rose Fulbright would be able to demonstrate many innovative ideas in structuring the new financing and help us achieve our goals, with a hands-on approach and determination to close the transaction on time.
CEELM: How did you divide the tasks between your internal legal team and external counsel?
J.P: My legal team and I co-ordinated the legal work of the transaction, while the financial matters were driven by our chief financial officer, Piotr Zamora. Norton Rose Fulbright was responsible for drafting and negotiating the term sheet and finance documents (the facilities agreement, the inter-creditor agreement, the security documents, and the fee letters) and negotiating the ancillary facility agreements prepared by the financial institutions. They also coordinated the work of our legal counsels outside Poland.
CEELM: In what way, if any, is your approach to splitting the responsibilities between your external counsel and your in-house team different in such financing deals from legal work outsourced on other matters?
J.P: I believe this refinancing transaction was a very complex and cross-border project, which took more than six months to close and required direct engagement on a daily basis from Norton Rose Fulbright. Due to the fact that they were able to allocate adequate resources and take care of many different streams of the work, we were successful at the end.