Jul 24, 2012. Gascogne SA signs an agreement with its banks and its shareholder EEM following discussions that have been ongoing since the start of 2012.

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Gascogne signs a protocol agreement with its bank partners and its shareholder EEM

Jul 24, 2012. /Lesprom Network/. Gascogne SA signs an agreement with its banks and its shareholder EEM following discussions that have been ongoing since the start of 2012, as the company said in a press release received by Lesprom Network. Recently Gascogne SA stated that losses in 2011 had led the company to renegotiate its syndicated loan with the bank pool. In line with IFRS standards, on 31 December 2011, the amount outstanding was classified as short-term debt. In this context, the Group has started discussions with all of its bank partners in order to ensure that means of funding operations and development are made sustainable. During the discussion phase, the banks agreed not to ask for advance repayment, to postpone the principal deadline from the end of March, and to maintain the bilateral lines of credit. On 20 February 2012, the banks also gave Gascogne a bridge loan of Euro 11.6 million, with the due date of July 2012, and on 12 April 2012, the French government loaned the company Euro 1.93 million which was used to partially repay the bridge loan, thus reducing the amount outstanding on this loan to Euro 9.66 million (both loans constitute the “New Loan”). In a tough economic environment, the Group had to face, early in July, a more important cash flow pressure than expected when discussions started with the bank pool. The company had to deal with this new context in its discussions with the bank pool and pending the outcome of these negociations, the Group has decided to request the suspension of the trading of its shares. This situation gave rise to the signing of a conciliation agreement with the Group’s banks and its shareholder EEM. It was approved by the Commercial Court of Dax on 18 July 2012. The main elements of the agreement signed between the Group, the banks and its shareholder EEM are: 1. As announced at the start of the year, Gascogne took the decision to sell its "Laminates" division entities in order to reduce the Group’s debt. The sale of the Swiss subsidiary’s assets was announced within the context of a sales contract signed on 31 May 2012, with the company UPM AG. The Group is awaiting the completion of conditions precedent pertaining to competition law in some countries. 2. Gascogne has requested the support of its shareholder EEM, which has agreed to make a shareholder’s current account advance of Euro 6m. This advance benefits from collateral on Gascogne's current account receivable from Gascogne Laminates Switzerland, its Swiss subsidiary. This guarantee is shared with the New Loan. 3. Gascogne also negotiated - that the New Loan amounting to Euro 11.6m and the shareholder’s current account advance of which the principal amount is Euro 6 million, be paid off proportionally to the amount of the outstanding debt, up to Euro 7.4 million by 31 December 2012 at the latest, and then in lump sums of Euro 1.7m between January and June 2013. - that the current Euro 17.6 million short term bilateral credit lines be fully maintained until 2014 for the same amounts and under the same financial conditions as previously. The terms and conditions of repayment of bilateral credit lines will be examined in September 2013. - the maintaining until July 2014 of factoring contracts with the Group’s French companies for a net budget of Euro 40 million. - a renegotiation of the margin, lower than the previous, and a new repayment schedule for syndicated loans. A new payment schedule was therefore fixed for the Euro 52.9 million refinancing loan. The lenders agreed to an exemption of the repayment due dates of the principal amount owed between 30 March 2012, and the 30 March 2014. The principal must be repaid starting on 30 March 2014 in 18 quarterly payments of Euro 2 million. The remaining balance of Euro 16.9 million must be paid by 31 July 2018. In addition, the repayment of a current revolving credit of Euro 17 million, which will be reduced to Euro 10.5 million with the sale of Gascogne Laminates, was fixed to 31 July 2018 at the latest. Gascogne also made several commitments within the framework of this agreement, in particular with respect to certain financial aggregates. The Groups, the banks and EEM have agreed to meet in September 2012 to continue their discussions and negotiations concerning the suitability of terms and conditions with identified developments.