Stock Code: 000553(200553) Stock Abbreviation: ADAMA A (B) NO. 2023-29
ADAMA Ltd.Announcement on Credit Facility from the
Related Party
I. Overview of the Related Party Transaction
On August 28, 2023, the 24
th meeting of the 9
th
session of the Board of Directors ofADAMA Ltd. (hereinafter referred to as the “Company”) approved entering into aCredit Facility Agreement by and between the Company's controlling shareholder,Syngenta Group Co., Ltd. (hereinafter referred to as "SG") or any of its subsidiariesand Adama Agricultural Solutions Ltd. (directly, or through one of its subsidiaries)(hereinafter referred to as "Adama Solutions"), a wholly-owned subsidiary of theCompany, according to which SG shall provide an amount of up to RMB 2 billion infavor of Adama Solutions (the "Transaction").Since SG is the controlling shareholder of the Company, the Transaction constitutesa related party transaction.Among the five directors of the Company, the related-party directors, Mr. Erik Fyrwald,Mr. Chen Lichtenstein and Mr. An Liru refrained from voting. As the number of non-related directors present at the board meeting was less than three and the transactionamount reaches the threshold of Listing Rules, the Transaction shall be submitted tothe Shareholders for approval while SG will refrain from voting. The independentdirectors also issued their independent opinion.The Transaction does not constitute a Material Assets Restructuring as stipulated bythe Administrative Measures on Significant Asset Restructuring of Listed Companies.II. Introduction to the Related Party
SG was established in 2019. Its legal representative is Li Fanrong, and its registeredaddress is Unit 08 of the 30th Floor, No. 88 of Shiji Avenue, Shanghai Pilot Free-Trade Zone of China. It has registered capital of RMB 11,144,544,602. Its mainbusiness covers the research and development, production and sales of crop protection,seeds and crop nutrition products, and modern agricultural services. The shareholderand shareholding proportion is: China National Agrochemical Co., Ltd 99.1%,Maidao Agrochemical Co., Ltd. 0.9%. The State-owned Assets Supervision andAdministration Commission of the State Council (SASAC) is the actual controller ofSG. The main financial data as of December 31, 2022 is: operating revenue of RMB224,844.89 million, net profit of 11,405.69 million, total assets of 573,101.98 million,net assets of 269,392.03 million.Related-party relationship: SG is the controlling shareholder of the Company. SG is arelated party of the Company in accordance with Item 1, Paragraph 2 of Article 6.3.3of the Listing Rules of Shenzhen Stock Exchange.Analysis of contract performance capability: To the best of the Company’s knowledge,SG operates normally and is in good operational condition. After searching on thewebsite of disclosure of enforcement information of China, it is not a debtor subjectto judicial enforcement.III. Basic Information on the Target of the Related-Party Transaction
The Transaction is an engagement in a RMB 2 billion long-term committed credit line,at 1-year Loan Prime Rate variable interest as controlled by People's Bank of China(LPR) minus a 0.65% margin (the "Credit Facility Agreement”).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 basisof market practice.V. Main Contents of the Credit Facility Agreement
Contract Name: Credit Facility AgreementBorrower: Adama Agricultural Solutions Ltd. (directly, or through one of itssubsidiaries)
Lender: Syngenta Group Co., Ltd. or any of its subsidiariesMain Terms: committed long-term credit facility in the aggregate amount of up toRMB 2 billion, for up to 3 years at 1-year LPR – 0.65%. Both parties may assign theirrights and obligations under the Credit Facility Agreement to another entity withintheir respective group according to the terms of the Credit Facility Agreement.Effective Date of the Agreement: following the approval of corporate requisite organs,as required.Dispute Resolutions: Any controversy or claim that fails to be solved amicably shallbe finally submitted to the competent courts of Tel-Aviv under the laws of the Stateof Israel.VI. Purpose of the Transaction and Its Impact on the Company
The Transaction expands and efficiently utilizes the Company's and its subsidiariesfunding sources with committed facilities providing an additional cash source notincluded in bank covenants. The Credit Facility Agreement follows the general practiceof similar transactions in the market and doesn’t contain unfair terms. The Transactionwill not adversely affect the interests of the Company and its non-related partyshareholders, nor will it affect the independence of the Company.VII. Status of the Different Kind of Related Party Transactions between the Company
and SinoChem HoldingThe related party transactions between the Company and subsidiaries of SinochemHolding are as follows:
1.
From January 1, 2023 till June 30, 2023, the occurred related party transactions with
subsidiaries of SinoChem Holding in the ordinary course of business is RMB1,903.89m. The estimated related party transaction amount in the ordinary course ofbusiness approved by the 2022 annual shareholders meeting is RMB 5,030.45m.
2. Deposits and loans of the Company and its subsidiaries in the Sinochem Finance Co.,Ltd.: As of the date of this announcement, the balance of deposits remains RMB195,485,584 and USD 1,984,117, and the loan amount is RMB 30,000,000, whichhave been approved by the 1st interim shareholders meeting of the Company in 2022.
3. The 18th meeting of the 9th session of the Board of Directors approved the Proposal
on Credit Facilities of $250m from the Related Party according to which SyngentaGroup (NL) B.V., a subsidiary of the Company's controlling shareholder SG, shallenter into an additional Credit Facility Agreement and provide an amount of USD250 million credit facility in favor of Adama Fahrenheit B.V., an indirectly wholly-owned subsidiary of the Company, and the transaction has been approved by the2022 annual shareholders meeting.VIII. Independent Directors’ Opinions
The Company’s independent directors have given separate opinions on the Transaction:
The Transaction is based on the funding needs of the Company and is normal businessoperations. The Transaction conforms to relevant national laws and regulations, asapplicable, and market-oriented principles, and will not impact the independence of theCompany 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 ofShenzhen Stock Exchange for the Listing of Stocks, the Articles of Association of theCompany and other laws and regulations. Therefore, the independent directors approvedthe Transaction.IX. Documents for Future Reference
1.
The resolutions of the 24
th
Meeting of the 9
thSession of the Board of Directors of theCompany;2.
Independent directors’ opinion and their prior written approval.
It is hereby announced.
The Board of Directors of ADAMA Ltd.
August 31, 2023