RNS18 Sep 2015 12:36
Looks like FXPO's loan with Bank F&C is pledged with fixed assets so FXPO loses assets if loan demand is not met....
"The Group has transactional banking arrangements with Bank Finance & Credit ('Bank F&C') in Ukraine which is under common control of the majority shareholder of Ferrexpo plc. Finance income and expenses are disclosed in the table on page 32.
On 25 May 2013, the Group entered into a new uncommitted multicurrency revolving loan facility agreement and a documentary credit facility agreement with Bank F&C which will expire on 29 May 2016. The aggregate maximum limit of these facilities amounts to UAH80 million (30 June 2015: US$3,807 thousand; 30 June 2014: US$6,766 thousand; 31 December 2014: US$5,073 thousand) and, as required under Ukrainian legislation, fixed assets are pledged. The total value of pledges under the terms of the loan facility agreements is US$2,864 thousand as at 30 June 2015. The terms and conditions of both facilities were the subject of an independent confirmation. No amounts are drawn and no letters of credit are outstanding under this facility as at 30 June 2015 (30 June 2014: nil; 31 December 2014: nil).
Bank F&C provides mortgages and loans to employees of the Group for the acquisition, construction and renovation of apartments in Ukraine. This is part of a social loyalty programme started by the Group in December 2011 allowing certain employees of the Group to borrow at preferential interest rates. OJSC Ferrexpo Poltava Mining and LLC Ferrexpo Yeristovo GOK act as guarantors for the bank's loans to the employees of the Group and have deposited US$3,546 thousand at Bank F&C as security (30 June 2014: US$5,797 thousand; 31 December 2014: US$4,726 thousand). The interest rate margin earned by Bank F&C covers the costs of administrating the mortgages and loans. Detailed information on the social loyalty programme is provided in the Corporate Social Responsibility Review section of the Annual Report and Accounts 2014."
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