INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K
Geely Term Loan Facility
On November 8, 2023, Polestar Automotive Holding UK PLC (“Polestar”), as borrower, entered into the credit agreement in relation to a USD 250,000,000 term loan facility (the “Term Loan Facility”) with Geely Sweden Automotive Investment AB, as original lender and agent (“GSAI”). GSAI is a wholly-owned subsidiary of Geely Sweden Holdings AB, the parent company of Volvo Car AB (publ), and one of Polestar’s affiliates.
The Term Loan Facility consists of a term loan denominated in U.S. dollars available for general corporate purposes. The term of the facility is until 30 June 2027 and the Term Loan Facility is required to be repaid on the final termination date, subject to GSAI exercising an option to convert all or part of the loan and accrued interest into shares of Polestar in connection with a QEO at the QEO Conversion Price (such shares, the “Conversion Shares”). A “QEO” refers to an offer of shares (or depositary receipts or other securities representing shares) of any class in the share capital of Polestar, where the proposed capital raising is in an amount equal to at least USD 350,000,000 (or such other amount as Polestar and GSAI may agree from time to time), and in which no fewer than five (or such other number as Polestar and GSAI may agree from time to time) institutional investors participate in the offering. The “QEO Conversion Price” refers to the price per share at which the relevant shares are offered for sale pursuant to the QEO, converted into U.S. dollars (if the offering price is not in U.S. dollars) at the Prevailing Rate (as defined in the Term Loan Facility). Polestar may not reborrow any part of the Term Loan Facility which has been repaid.
The interest rate applicable to borrowings under the Term Loan Facility is Term SOFR (as described in the Term Loan Facility and subject to a zero floor) plus 4.97%. The interest period of the Term Loan Facility is 6 months and default interest is calculated as an additional 1% on the overdue amount. Polestar may voluntarily prepay loans or reduce commitments under the Term Loan Facility, in whole or in part, subject to minimum amounts and subject to any Break Costs (as defined in the Term Loan Facility), with prior notice but without premium or penalty. Polestar has an obligation to prepay the loan on the occurrence of a change of control or illegality.
Polestar’s obligations under the Term Loan Facility are not guaranteed or secured. The Term Loan Facility contains customary negative covenants, including, but not limited to, restrictions on Polestar’s ability to make certain acquisitions, loans and guarantees. The Term Loan Facility also contains certain affirmative covenants, including, but not limited to, certain information undertakings and access to senior management.
The Term Loan Facility contains certain customary representations and warranties, subject to certain customary materiality, best knowledge and other qualifications, exceptions and baskets, and with certain representations and warranties being repeated, including: (i) status; (ii) binding obligations; (iii) non-conflict with constitutional documents, laws or other obligations; (iv) power and authority; (v) validity and admissibility in evidence; (vi) governing law and enforcement; (vii) ranking; and (viii) financial information.
The Term Loan Facility provides that, upon the occurrence of certain events of default, Polestar’s obligations thereunder may be accelerated. Such events of default include payment defaults to GSAI thereunder, material inaccuracies of representations and warranties, covenant defaults, cross acceleration with respect to Polestar’s other indebtedness, corporate arrangement, winding-up, liquidation or similar proceedings, creditors’ process affecting assets over a certain minimum amount, and other customary events of default. The Term Loan Facility is governed by English law.
