Report of the board of directors ex article 3:6 Belgian Code of Companies and Associations
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Pursuant to articles 3:5 and 3:6 of the Belgian Code of Companies and Associations, we are hereby reporting to you on the
operations of Nyrstar NV (the “Company”) with respect to the financial year as from 1 January 2021 until 31 December 2021.
This report comprises also the corporate governance statement and remuneration report in accordance with article 3:6 §2 and
§3 of the Belgian Code of Companies and Associations as attached to this report in annex C and D respectively.
1. Company facts and activities
The Company has its registered office at Zinkstraat 1, Balen, Belgium. The Company has been listed on Euronext Brussels
since 29 October 2007.
Until 31 July 2019, the Company was the holding company of the Nyrstar Group (consisting of Nyrstar NV and its subsidiaries).
In addition, until 31 July 2019 the Company delivered a number of support services to the Nyrstar Group, such as, but not
limited to, regional purchasing, IT, environment, innovation and development, continuous improvement and legal support
services. Following the completion of the restructuring of the Nyrstar group at 31 July 2019 (described in more detail in section
2 below), the Company intended to continue trading as an investment company, holding 2% of the equity in NN2 NewCo
Limited (“NN2”) for the benefit of the Company’s shareholders.
At 9 December 2019 the Extraordinary General Meeting (“EGM”) of the Company was held to deliberate on the continuation
of the Company's activities and a proposed capital decrease. The shareholders rejected the continuation of the Company's
activities. As such, the 31 December 2021 financial statements of the Company are prepared on a discontinuity basis. As the
result of an order of 26 June 2020 of the President of the Antwerp Enterprise Court (Antwerp division), at the request of a
group of shareholders, the Company is currently prohibited from holding a general meeting with the dissolution of the Company
on the agenda until three months after a final decision on the appointment of a college of experts (see below, under section
8.2) will have obtained res judicata effect.
Under article 3:23 of the Belgian Code of Companies and Associations, a parent company that controls one or more
subsidiaries is required to prepare consolidated financial statements, unless such subsidiaries have, in view of the consolidated
assets, financial position or results that are only of a negligible significance. Given as at 31 December 2021 Nyrstar NV did
not control any significant subsidiary, the Company was not required to prepare consolidated financial statements for the year
ended 31 December 2021. In accordance with article 12, §3, final paragraph, of the Royal Decree of 14 November 2007, the
Company has prepared the 31 December 2021 standalone statutory financial statements in accordance with Belgian GAAP.
2. Restructuring of the Nyrstar group
In October 2018, the former Nyrstar group initiated a review of its capital structure (the "Capital Structure Review") in response
to the challenging financial and operating conditions being faced by the Nyrstar group. The Capital Structure Review identified
a very substantial additional funding requirement that the Nyrstar group was unable to meet without a material reduction of
the Nyrstar group's indebtedness. As a consequence, the Capital Structure Review necessitated negotiations between the
Nyrstar group's financial creditors that ultimately resulted in the restructuring of the Nyrstar group, which became effective on
31 July 2019 (the “Restructuring”). As a result of the Restructuring, Trafigura Group Pte. Ltd., via its indirect 98% ownershipof the new holding company NN2 Newco Limited (“NN2”), became the ultimate parent company of the former (direct and
indirect) subsidiaries of the Company (the "Operating Group”), with the remaining 2% stake in NN2 (and thereby the Operating
Group) being owned by the Company.
The agreements to which the Company is currently a party are discussed in further detail below.
2.1. The NNV-Trafigura Deed
The lock-up agreement (“Lock-Up Agreement”) entered into on 14 April 2019 between, among others, the Company and
representatives of its key financial creditor groups, envisaged that the Company, Trafigura Pte Ltd (“Trafigura”) and Nyrstar
Holdings Limited ("Nyrstar Holdings", a Trafigura special-purpose vehicle incorporated, amongst other things, for the purpose
of implementing the Restructuring, now known as Nyrstar Holdings Plc) would enter into a deed confirming their agreement in
respect of (i) certain steps necessary for the implementation of the restructuring as envisaged in the Lock-Up Agreement and
(ii) the terms of the ongoing relationship between the Company and the Trafigura group (the "NNV-Trafigura Deed"). The NNVTrafigura Deed was duly executed on 19 June 2019. Certain key terms of the NNV-Trafigura Deed can be summarised as
follows.
- Distribution policy: under the NNV-Trafigura Deed, Trafigura and Nyrstar Holdings have assumed obligations which
are intended to ensure, as far as possible, that any profits realised by the Operating Group are distributed to the
shareholders of NN2 (including the Company as 2% minority shareholder). To this end, Nyrstar Holdings has agreed
to procure that: (i) the board of NN2 will meet at least on an annual basis to assess whether NN2 has any profits
lawfully available for distribution (and if so, NN2 will make such distribution in accordance with applicable law); and
(ii) NN2 and the other members of the Operating Group will not, under the terms of any financing or other agreement
to which they are or shall be party (other than financing or other agreements entered into on arm's length terms with
third parties), be subject to any limitations on making dividends or other distributions to their respective shareholders.
- Drag / tag rights: under the terms of the NNV-Trafigura Deed, if Nyrstar Holdings or any Trafigura entity or entities
which hold(s) the 98% stake in NN2 (being the "Majority Shareholder(s)") proposes at any time a transfer of any right
or interest to a third party purchaser (on arms' length terms, for cash or non-cash consideration) that would result in
a member of the Trafigura group holding 50% or less of the shares in NN2, then the Majority Shareholder(s) proposing
the transfer will have the right to oblige the Company to transfer (a "drag right"), and the Company will have an
equivalent right to participate in such transfer (a "tag right"), its entire 2% equity stake in NN2 on the same terms and
for the same consideration per share as for the Majority Shareholder(s).
- NN2 change of control: the NNV-Trafigura Deed obliges Trafigura and Nyrstar Holdings to procure that the Trafigura
group shall only implement any intragroup reorganisation which would result in at least 75% of the net assets (by
value) of the Operating Group no longer being held by NN2 but being held by another member of the Trafigura group
(the "Replacement HoldCo"), if (i) it is bona fide and undertaken in good faith, (ii) the financial position of Replacement
Holdco is substantially the same as that of NN2 immediately prior to such intragroup reorganisation, (iii) arrangements
are put in place such that shareholders of the Replacement Holdco (including the Company) have substantially
equivalent rights and obligations with respect to Replacement Holdco as they did with respect to NN2, and (iv) the
Company has an equity interest in the Replacement Holdco equivalent to its equity interest in NN2 immediately prior
to the intragroup reorganisation, with substantially the same rights and protections. If such conditions are met, then
the Company shall take all steps and provide such reasonable assistance as is necessary to effectuate the intragroup
reorganisation, and shall cooperate in good faith. Any costs reasonably incurred by the Company in doing so
(including reasonable advisor fees), shall be borne by Trafigura.
2.2. The Put Option Deed
Pursuant to the NNV-Trafigura Deed, the Company and Trafigura also agreed that Trafigura shall grant to the Company an
option to require a Trafigura entity to purchase the Company's entire interest in NN2. The terms of this option are set out in a.separate deed, dated 25 June 2019, between the Company, Trafigura and Nyrstar Holdings (the "Put Option Deed"). Under
the terms of the Put Option Deed, the Company can put all (but not only a part) of its 2% holding in NN2 to Trafigura at a price
equal to EUR 20 million (the "Put Option"). We refer in this respect to the related party disclosures included in the annual
accounts for the financial year ended 31 December 2021 in respect of the mandatory prepayment obligations and limited
recourse provisions under the Limited Recourse Loan Facility (as defined below) that will apply to the proceeds of the Put
Option. The Put Option can be exercised by the Company until 31 July 2022, subject to limited triggers allowing earlier
termination of the Put Option before 31 July 2022.
2.3. Release from parent company guarantees in favour of Trafigura
As stated above, prior to the effective date of the Restructuring which was 31 July 2019 (the “Restructuring Effective Date”),
the Company was the ultimate parent company of the Nyrstar group, and had previously issued various parent company
guarantees (the “PCGs”) in respect of the obligations of its subsidiaries, including, but not limited to, two parent company
guarantees (the "Trafigura PCGs") granted in respect of the primary financial obligations of the Company's indirect subsidiary
at that time, Nyrstar Sales & Marketing AG ("NSM"), to Trafigura, namely under the USD 650 million Trade Finance Framework
Agreement ("TFFA") and the USD 250 million Bridge Finance Facility Agreement ("BFFA"). The Trafigura PCGs as well as all
other security and / or guarantees provided to Trafigura by the Operating Group in respect of the TFFA and BFFA, were
released in full on the Restructuring Effective Date.
2.4. Release from parent company guarantees in favour of third parties and the Company's rights to indemnification by NN2
under the NNV-NN2 SPA
Prior to, and as part of the implementation of, the Restructuring, the Company entered into an agreement for the sale and
transfer by the Company of substantially all of its assets including 100% of its shareholding in Nyrstar Netherlands (Holdings)
BV and also its holdings (direct and indirect) in its subsidiaries, but excluding its shares in NN1 NewCo Limited ("NN1"), to
NN2 (the “NNV-NN2 SPA”). Under the NNV-NN2 SPA, the Company benefits from contractual agreements with NN2 and
Trafigura in respect of its release from, or indemnification for, liabilities for existing financial indebtedness and obligations owed
to third parties in respect of financial, commercial or other obligations of the then current members of the Operating Group (the
"PCGs"), such that those third parties should no longer have recourse to the Company. The release and / or indemnification
obligations of NN2 from which the Company benefits can be summarised as follows.
- Release of PCGs and general indemnity: The NNV-NN2 SPA includes a commitment by NN2 to use reasonable
endeavors to procure the release of obligations owed by the Company under third-party PCGs. This obligation is
combined with an obligation on NN2 to indemnify the Company, to the extent such PCGs are not released, for any
and all liabilities in relation to such PCGs in respect of the failure by the applicable member of the Operating Group
to comply fully with its principal obligations.
- Indemnity for specified historic liabilities: Further, the NNV-NN2 SPA also contains an obligation on NN2 to indemnify
the Company, to the extent not covered by the release and/or indemnification of PCGs mentioned above, in respect
of certain specified liabilities, including certain liabilities arising in relation to certain historic disposals by the former
Nyrstar group and/or from certain historic mine closures, which are specified in a schedule to the NNV-NN2 SPA.
- Limitation on recourse to the Company of former subsidiaries: To limit and release further any financial obligations
on the Company, the NNV-NN2 SPA obliges NN2 to procure that, and the NNV-Trafigura Deed obliges Trafigura to
procure that, no former subsidiaries of the Company will make any demands for payment from the Company except
(i) under the Limited Recourse Loan Facility, (ii) as otherwise agreed following the completion of the Restructuring;
or (iii) to the extent that the Company has sufficient funds available (excluding any dividends or sale proceeds in
respect of the Company's direct 2% shareholding in NN2).

2.5. Financial transactions with Trafigura entities - the Limited Recourse Loan Facility
2.5.1. Introduction
On 23 July 2019, the Company entered into a EUR 13.5 million committed, limited recourse, loan facility (the "Limited Recourse
Loan Facility") provided to it by NN2 (as "Lender"). The key terms of the Limited Recourse Loan Facility are described below.
The Limited Recourse Loan Facility is made available in two separate tranches: (i) up to EUR 8.5 million to be applied towards
the Company's ongoing ordinary course operating activities ("Facility A"); and (ii) up to EUR 5 million intended for the payment
of certain costs related to litigation defense ("Facility B"). No security, collateral or guarantees have been granted in respect
of the Company's obligations under the Limited Recourse Loan Facility.
2.5.2. Available commitments, amounts outstanding and interest
As at 31 December 2021, the Company owed EUR 5.5 million (2020: EUR 4.6 million) under Facility A. Facility A can be used
by the Company to cover day-to-day operating costs, including, without limitation, reasonable director and employee costs,
D&O insurance premium (to the extent not paid prior to the Restructuring Effective Date), audit fees, legal costs (except those
relating to litigation or other actual or threatened proceedings against the Company, which should be funded from Facility B
(defined below)), listing fees and investor relations costs. The funding under Facility A is provided to the Company based on
the quarterly cash flow forecast prepared by the Company and provided to Trafigura as a condition of the funding. The total
quantum of funds to be made available under Facility A was agreed based on the Company's forecast operating costs for a
five year period following the completion of the Restructuring, taking into account the ongoing operational services provided
to the Company by NN2, as agreed in the NNV-NN2 SPA, for a period of three years from the Restructuring Effective Date (or
less subject to agreed early termination triggers) (the "Ongoing Services"). The Ongoing Services to be provided by NN2 to
the Company include finance, tax, corporate counsel, IT and administration services. The provision of the Ongoing Services
to the Company is intended to reduce the Company's operating costs in the period following the Restructuring Effective Date.
As at 31 December 2021, the Company had drawn EUR 2.8 million (2020: EUR 0.9 million) under Facility B. Subject to the
restrictions detailed below, Facility B can be applied by the Company towards payment or reimbursement of costs in respect
of any litigation, proceeding, action or claims (including tax claims) made, asserted or threatened against the Company, NN1
Newco Limited ("NN1") or any of their current or former directors or officers (each being a "Claim").
Under Facility A, the Company can borrow up to EUR 4.9 million before 31 July 2021 and then up to a further EUR 1.2 million
annually until 2024. Funding under Facility B can be drawn based on costs incurred in respect of any Claim (subject to the
restrictions detailed below, and on the delivery of an invoice for such costs). Utilisation of each Facility is limited to a maximum
of three drawings per financial quarter per Facility (excluding any PIK Loans (defined below)). As at the date of this report, the
Company has drawn EUR 5.8 million under Facility A and EUR 3.2 million under Facility B.
The rate of interest on amounts outstanding under the Limited Recourse Loan Facility is the aggregate of EURIBOR plus a
margin of 0.5% per annum. It shall be payable within 10 business days of the anniversary of the date on such amount was
made available, provided that such interest will be capitalised if it has accrued for a period of one year or more and the
Company has given a notice in the form prescribed by the Limited Recourse Loan Facility. Any interest which is capitalised
shall be treated as a new loan (a "PIK Loan") under the relevant Facility. Any PIK Loan shall itself accrue interest, and that
interest may also be capitalised. No payments of interest have been made by the Company as all payable interest until 31
December 2021 of EUR 43k (2020: 15k) has been capitalised into a new PIK Loan.
2.5.3. Restrictions on use of proceeds
The Company must not use any amount borrowed under either Facility A or Facility B for funding (directly or indirectly) any of
the costs related to asserting or bringing or assisting in the pursuit of claims (including any counterclaim or defense) against
Trafigura, other members of the Trafigura group, NN2 and / or any Replacement Holdco, and / or any other member of the
Operating Group), against any of such entities' current or former directors, officers, or advisers, against any creditor in respect
of such entities (other than with the consent of NN2, such consent not to be unreasonably withheld or delayed) or in connectionwith any challenge to the Restructuring, including in relation to the TFFA and the BFFA or any other document contemplated
by the Restructuring implementation deed.
2.5.4. Mandatory prepayment obligations
If at any time after 31 July 2020, the amount of the available cash, after allowing for the minimum headroom amount of EUR
1 million, of the Company (less any amount of the proceeds of any Facility B intended to be applied towards costs incurred by
the Company to which Facility B Loan relates, but not yet so applied)) exceeds EUR 1.5 million, the Company has to apply,
within five business days of the excess cash arising, the relevant excess cash to prepay any amounts outstanding under
Facility B. If any excess cash remains after such repayment, the Company shall apply 50% of that remaining excess cash to
repay the outstanding amount under Facility A, and shall (to the extent permitted under applicable law and regulation) apply
the remaining 50% of that excess cash towards payment of dividends to the Company's shareholders. The above only applies
until the later of (i) the date on which the Company ceases to own its 2% equity interest in the Operating Group (such equity
interest being as a result of a direct shareholding either in NN2 or in the Replacement Holdco (as defined above) - the
"Company Equity Interest", and such date being the "Company Exit Date") and (ii) the receipt of all proceeds (subject to any
deductions permitted / required under the terms of the Limited Recourse Loan Facility) from any disposal(s) of the Company
Equity Interest which result(s) in the occurrence of the Company Exit Date (the "Disposal Proceeds") (which is, for the
avoidance of doubt, also triggered by the exercise of the Put Option).
Immediately upon receipt of any Disposal Proceeds, and subject to the limited recourse provisions described below, the
Company shall procure that these shall be applied first to prepay any amount outstanding under Facility B, and secondly, if (i)
any Disposal Proceeds remain after any required prepayment of Facility B, and (ii) the aggregate amount of all amounts
outstanding under Facility A exceeds EUR 5 million, to prepay such Facility A amounts to or towards an aggregate amount of
EUR 5 million.
The Company shall ensure that, if any distribution is paid to the Company's shareholders on or after the Company Exit Date,
an amount equal to that distribution is applied to repay or prepay amount outstanding under Facility A before or simultaneously
with such distribution.
Accordingly, as at the date of this report funds have been drawn under Facility B, the exercise of the Put Option would not
only result in a draw-stop under the Limited Recourse Loan Facility, but repayment of the funds drawn under the Limited
Recourse Loan Facility would so need to be repaid with the proceeds of the exercise of the Put Option, subject to the limited
recourse provisions described below. At the date of this report the amount of EUR 20 million would need to be used to
reimburse those amounts drawn under the Limited Recourse Loan Facility which are required to be paid from the Put Option
proceedsin accordance with the mandatory prepayment obligations and limited recourse provisions described below.
The Company has also agreed that, if it receives any amounts from costs awards, damages awards and / or any other recovery
from any counterparty to a Claim (such amounts constituting "Claim Proceeds"), then such Claim Proceeds must be used
immediately to repay or prepay any amounts outstanding under Facility B.
Additionally, there are customary provisions that require mandatory prepayment of amounts outstanding under either or both
Facility A and B in the case of certain events of default that allow for acceleration by the Lender.
However, in accordance with “limited recourse” provisions of the Limited Recourse Loan Facility (as detailed further at 2.5.5.
below), NN2’s recourse to the Company in respect of repayment of funds drawn or any other obligation thereunder is limited
to the Company's net assets, if any.
2.5.5. Limited recourse
As mentioned above, the recourse of NN2 as Lender under the Limited Recourse Loan Facility in respect of repayment thereof
or any other obligation of the Company thereunder is limited to the “Company Net Assets”, being the assets (including all
present and future properties, revenues and rights of every description) of the Company (other than assets held or receivedon trust for a person which is not a member of Nyrstar or its subsidiaries) having satisfied or provided for its “Liabilities”
(meaning all present or future liabilities and obligations, both actual and contingent and whether incurred solely or jointly or as
principal or surety or in any other capacity), except for Liabilities of the Company under the Limited Recourse Loan Facility
and related finance documents which shall be disregarded for this purpose.
Further, to the extent that the Company Net Assets are insufficient to discharge the Company’s obligations under the Limited
Recourse Loan Facility, such obligations shall be deemed to be limited to the amount of the Company Net Assets, and the
Lender shall not be entitled to make a claim and shall have no further recourse against the Company and the Company shall
have no liability to pay or otherwise.
However, this limitation on NN2’s recourse against the Company shall not apply to the extent that the value of the Company
Net Assets is impaired, or NN2 suffers loss as a result of any breach by the Company of any provision of the Limited Recourse
Loan Facility (or any related finance document) other than the repeating representations / warranties thereunder or the
provisions requiring payment of interest / fees or repayment / prepayment of principal thereunder.
2.5.6. Information, consultation and litigation strategy undertakings
If any Claim arises as a result of which the Company reasonably anticipates that it may make a utilisation under Facility B, the
Company must:
- promptly notify NN2 and Trafigura of the Claim;
- subject to compliance with applicable law or confidentiality obligations to third parties, make available to NN2 and
Trafigura all information in its possession and control as reasonably requested by NN2 or Trafigura in connection
with assessing, contesting, disputing, defending, appealing or compromising the Claim, provided that NN2 and
Trafigura shall maintain confidentiality and/or privilege with regard to such information;
- keep NN2 and Trafigura informed of the progress / developments in respect of the Claim, and promptly provide any
correspondence or other information received in connection with the Claim;
- consult and take into account the views of NN2 and Trafigura as to the applicable legal advisors that will represent
the Company, NN1, or the applicable directors or officers. The Company shall also procure that such legal advisors
provide fee estimates as requested by NN2 or Trafigura;
- consult with and take into account the views of NN2 and Trafigura in relation to the conduct of the defense /
negotiations / settlements in respect of the Claim; and
- whilst any amount is outstanding under Facility B in relation to a civil Claim, not make any admission of liability,
agreement, settlement or compromise in relation to that Claim without the prior written approval of Trafigura.
The Company must also consult with Trafigura prior to taking any action relating to insolvency or bankruptcy proceedings,
including under Book XX of the Belgian Code of Economic Law.
The Company is also obliged to provide NN2 with certain financial information, including quarterly cashflow forecasts (and any
revisions thereto required under the terms of the Limited Recourse Loan Facility), half-yearly financial statements and audited
annual financial statements, drawn up on a consolidated basis (to the extent the Company has subsidiaries) and in accordance
with the accounting principles agreed under the terms of the Limited Recourse Loan Facility.
2.6. Relationship Agreement
At the completion of the Restructuring at 31 July 2019, the "Relationship Agreement" between Trafigura Group Pte Ltd and
the Company (dated 9 November 2015) was terminated. The Relationship Agreement governed the relationship between the. see & read more on

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