Loans and Borrowings

12 Months Ended

Dec. 31, 2020

12.	LOANS AND BORROWINGS

12.1.

Breakdown of convertible loan

On October 16, 2017, the Company issued 6,081,081 OCEANEs at par with a nominal unit value of €29.60 per bond for an aggregate nominal amount of €180 million. The exchange or conversion premium is 30% of the reference share price of €22.77. Annual nominal interest rate is a fixed 3.5% payable semi-annually in arrears. The effective interest rate is 7.2%. The OCEANEs are due October 16, 2022. Redemption prior to maturity is at the option of the Company from November 6, 2020 if the arithmetic volume-weighted average price of the Company's share price and the then-prevailing conversion ratio (over a 20-day trading period) exceeds 150% of the nominal value of the OCEANEs.

As of December 31, 2018, 2019 and 2020, the Group recorded a liability of €160,489, €165,454 and €170,782 respectively, related to the OCEANEs net of the equity portion and debt issue costs. Of this amount €1,312, €1,312 and €1,312 respectively, was classified as current and €159,176, €164,142 and €169,470 respectively, was classified as non-current.

As indicated in Note 2.2 “Renegotiation of the convertible bond debt (OCEANEs), these convertible bonds were renegotiated subsequent to December 31,2020.

12.2.

Breakdown of other loans and borrowings

Other loans and borrowings consisted of the following:

Other loans and borrowings - Total	As of
(in € thousands)	2018/12/31		2019/12/31		2020/12/31
Refundable and conditional advances		3,229		3,229		3,229
Bank loans		3,964		2,645		1,540
Obligations under leases		1,900		12,281		10,131
Accrued interests		3		1		1
Other financial loans and borrowings		7		7		7
TOTAL		9,104		18,165		14,908

Other loans and borrowings - Current	As of
(in € thousands)	2018/12/31		2019/12/31		2020/12/31
Refundable and conditional advances		—		—		—
Bank loans		1,319		1,105		942
Obligations under leases		520		2,112		2,085
Accrued interests		3		1		1
Other financial loans and borrowings		7		7		7
TOTAL		1,848		3,226		3,035

Other loans and borrowings - Non current	As of
(in € thousands)	2018/12/31		2019/12/31		2020/12/31
Refundable and conditional advances		3,229		3,229		3,229
Bank loans		2,645		1,540		598
Obligations under leases		1,381		10,169		8,046
Accrued interests		—		—		—
Other financial loans and borrowings		—		—		—
TOTAL		7,255		14,939		11,873

12.2.1.

Refundable and conditional advances

The following table summarizes advances outstanding at December 31, 2020, 2019 and 2018.

Total

Net book value

Refundable and conditional advances - general overview

Grant

amount

Effects of

As of

(in € thousands)

date

allocated

Receipts

Repayments

discounting

2020/12/31

BPI FRANCE - IT-DIAB

12/23/2008

3,229

—

3,229

Development of a global strategy for the prevention and management of type 2 diabetes

TOTAL

3,229

Total

Net book value

Refundable and conditional advances—general overview

amount

Effects of

As of

(in thousands of euros)

Grant date

allocated

Receipts

Repayments

discounting

2019/12/31

BPI FRANCE—IT-DIAB

12/23/2008

3,229

—

3,229

Development of a global strategy for the prevention and management of type 2 diabetes

TOTAL

3,229

Total

Net book value

Refundable and conditional advances—general overview

amount

Effects of

As of

(in € thousands)

Grant date

allocated

Receipts

Repayments

discounting

2018/12/31

BPI FRANCE—IT-DIAB

12/23/2008

3,229

—

3,229

Development of a global strategy for the prevention and management of type 2 diabetes

TOTAL

3,407

BPI FRANCE IT-DIAB		On December 23, 2008, the Group received an advance from BPI France (the BPI France IT-DIAB) as part of a framework innovation aid agreement involving several scientific partners and for which the Group was the lead partner. The contribution expected at each stage by each of the partners in respect of work carried out and results achieved is defined in the framework agreement. With respect to the Group, the aid consisted of a €3,229 conditional advance and a €3,947 non-repayable government grant.

		The conditional advance is not refundable except in the event of success. The program ended on December 31, 2014. In the event of success, defined as the commercial spin-offs of the IT-Diab program which involves products for the treatment or diagnosis of type 2 diabetes, in that case, the financial returns generated will be used initially to repay the €3,229 conditional advance and the agreement stipulates that the conditional advance will be regarded as repaid in full when the total payments made in this regards by the recipient, discounted at the rate of 5.19%, equal the total amount, discounted at the same rate, of the aid paid. Any further amounts will be classified as additional payments, up to a maximum amount of €14,800.

As provided in the project assistance contract, we sent a letter to BPI in December 2019 in order to notify it of our LabCorp and Terns contracts while indicating that elafibranor was now aimed at treating hepatic diseases and no longer type 2 diabetes as provided for in the aid agreement. We proposed to BPI to establish a statement of abandonment of the IT DIAB project on which the above advance is based. Following this letter, the parties met in March 2020 for the presentation of our arguments, and in June 2020 following the publication of the results of the RESOLVE-IT study, and a new letter was sent in November 2020. In this context, we are awaiting a proposal from BPI on new financial terms related to this situation and a draft amendment to the repayable advance agreement.

12.2.2.

Bank loans

The Group did not take any new bank loan in 2020.

Bank loans are primarily used to finance research and laboratory equipment. Bank loans consisted of the following as of December 31, 2018:

							Available			Outstanding
Bank loans	Loan	Facility		Interest			As of			As of
(in € thousands)	date	size		rate			2018/12/31		Installments	2018/12/31
CDN 5	November 2018		500		0.46	%		—	48 monthly		490
CIC 5	July 2017		1,000		0.69	%		—	60 monthly		753
CDN 4	June 2017		600		0.36	%		—	48 monthly		376
BNP 4	April 2017		800		0.87	%		—	60 monthly		695
CIC 4	December 2016		265		0.69	%		—	60 monthly		164
BNP 3	October 2016		1,050		0.80	%		—	20 quarterly		735
NEUFLIZE 2	June 2016		500		1.10	%		—	12 quarterly		84
BNP 2	June 2016		500		0.80	%		—	20 quarterly		277
CDN 3	April 2016		500		0.72	%		—	60 monthly		236
CIC 3	March 2015		500		0.85	%		—	16 quarterly		32
BNP	December 2014		500		2.00	%		—	20 quarterly		103
Other			—					—			19
TOTAL			6,715								3,964

Bank loans consisted of the following as of December 31, 2019:

							Available			Outstanding
Bank loans	Loan	Facility		Interest			As of			As of
(in € thousands)	date	size		rate			2019/12/31		Installments	2019/12/31
CDN 5	November 2018		500		0.00	%		—	48 monthly		365
CIC 5	July 2017	1000			0.00	%	0		60 monthly		554
CDN 4	June 2017	600			0.00	%	0		48 monthly		226
BNP 4	April 2017	800			0.00	%	0		60 monthly		537
CIC 4	December 2016		265		0.00	%		—	60 monthly		111
BNP 3	October 2016	1050			0.00	%	0		20 quarterly		525
NEUFLIZE 2	June 2016	500			0.00	%	0		12 quarterly		0
BNP 2	June 2016	500			0.00	%	0		20 quarterly		177
CDN 3	April 2016		500		0.00	%		—	60 monthly		135
CIC 3	March 2015	500			0.00	%	0		16 quarterly		0
BNP	December 2014	500			0.00	%	0		20 quarterly		0
Other		0					0				14
TOTAL			6,715								2,645

Bank loans consisted of the following as of December 31, 2020:

							Available			Outstanding
Bank loans	Loan	Facility		Interest			As of			As of
(in € thousands)	date	size		rate			2020/12/31		Installments	2020/12/31
CDN 5	November 2018		500		0.00	%		—	48 monthly		241
CIC 5	July 2017	1000			0.00	%	0		60 monthly		354
CDN 4	June 2017	600			0.00	%	0		48 monthly		75
BNP 4	April 2017	800			0.00	%	0		60 monthly		377
CIC 4	December 2016		265		0.00	%		—	60 monthly		58
BNP 3	October 2016	1050			0.00	%	0		20 quarterly		315
NEUFLIZE 2	June 2016	500			0.00	%	0		12 quarterly		0
BNP 2	June 2016	500			0.00	%	0		20 quarterly		76
CDN 3	April 2016		500		0.00	%		—	60 monthly		34
CIC 3	March 2015	500			0.00	%	0		16 quarterly		0
BNP	December 2014	500			0.00	%	0		20 quarterly		0
Other		0					0				9
TOTAL			6,715					—			1,540

12.4.

Maturities of financial liabilities

Maturity of financial liabilities	As of		Less than		Less than		Less than		Less than		Less than		More than
(in € thousands)	2020/12/31		1 year		2 years		3 years		4 years		5 years		5 years
BPI FRANCE - IT-DIAB		3,229		—		—		—		—		—		3,229
TOTAL - Refundable and conditional advances		3,229		—		—		—		—		—		3,229
Convertible loans		170,782		1,313		169,470		—		—		—		—
Bank loans		1,540		942		544		54		—		—		—
Leases		10,131		2,085		1,564		1,150		1,109		1,039		3,184
Accrued interests		1		1		—		—		—		—		—
Other financial loans and borrowings		7		7		—		—		—		—		—
TOTAL - Other loans and borrowings		182,461		4,348		171,577		1,205		1,109		1,039		3,184
TOTAL		185,691		4,348		171,577		1,205		1,109		1,039		6,413

Under the initial terms, the convertible bond results in the payment of yearly interest of €6,300 and a reimbursement at par in October 2022. The nominal amount of the convertible loan of €180 million is due in less than 2 years. Regarding the renegotiation of this bond debt, please see Note 2.2 “Renegotiation of the convertible bond debt (OCEANEs)”.

Regarding the IT-DIAB advance, please see Note 12.2.1 “Refundable and conditional advances”.