2015-04-30 15:18:23 CEST
2015-04-30 15:19:43 CEST
REGULATED INFORMATION
Talvivaaran Kaivososakeyhtiö Oyj - Financial Statement Release
Talvivaara Mining Company annual results review for the year ended 31 December 2014
Stock Exchange Release
Talvivaara Mining Company Plc
30 April 2015
Talvivaara Mining Company annual results review for the year ended 31 December
2014
Talvivaara Sotkamo Ltd filed for bankruptcy on 6 November 2014
Creditors' voting procedure for approval of Talvivaara's draft restructuring
programme ongoing
Key events of 2014
* Following the bankruptcy of Talvivaara Sotkamo Ltd ("Talvivaara Sotkamo") on
6 November 2014, Talvivaara Mining Company Plc ("Talvivaara" or the"Company") has not had control over the operations at the Sotkamo mine and
is therefore no longer in a position to continue reporting on the status and
development of the Sotkamo mining operations
* On 6 November 2014, trading of Talvivaara's shares on the Helsinki Stock
Exchange was suspended. The suspension of trading continues on the date of
publication of the Company's financial statements 30 April 2015
* The Company's financial statements for the financial year ended 31 December
2014 have been prepared on a basis other than going concern. The chosen
reporting basis results from the existence of material uncertainty that
casts significant doubt upon the Company's ability to realise its assets and
discharge its liabilities in the normal course of business and from the lack
of visibility on the Company's operational environment twelve months beyond
the date of reporting
* Following the bankruptcy of Talvivaara Sotkamo, Talvivaara has financed and
continues to finance its operations by providing administrative and
technical services and by leasing certain critical machinery and equipment
to the bankruptcy estate of Talvivaara Sotkamo under agreements entered into
by the Company and the bankruptcy estate on 19 November 2014
* On 19 December 2014, Talvivaara placed its dormant subsidiaries in
liquidation and converted all its receivables from these companies into
equity while the subsidiaries wrote off all their receivables from the
bankruptcy estate of Talvivaara Sotkamo. After these actions and the sale of
all the shares of the Company's overseas subsidiary on 30 December 2014, the
Company's plan to become the single reporting entity was completed
* Following the decision by the Annual General Meeting of the Company on 12
June 2014, the listing of the Company's shares on the Official List of the
United Kingdom Listing Authority was cancelled with effect from (and
including) 14 July 2014
* On 1 April 2014, the Company as a guarantor and Talvivaara Sotkamo entered
into a Loan and Streaming Holiday Agreement with Nyrstar Sales and Marketing
AG, under which Nyrstar made available to Talvivaara Sotkamo a loan facility
of up to EUR 20 million, enabling the Talvivaara group's process to identify
potential investor(s) to participate in a long-term, overall financial
solution for the Talvivaara group
* Reported operating loss EUR 702.6 million
Key events of 2015 to date
* Talvivaara is continuing its operations for the time being with the target
of securing sufficient financing to participate in the acquisition of the
mining operations from the bankruptcy estate of Talvivaara Sotkamo or
securing a different financial and/or operative arrangement that will secure
the continuance of the Company's eligible business
* The supplemented draft restructuring programme of the Company was submitted
by the Administrator to the District Court of Espoo on 13 March 2015,
proposing a haircut of 99% for the unsecured restructuring debts and leaving
1% of the amount of such debt to be repaid. The restructuring debts secured
by business mortgage would not be cut and no payments would be made on debts
with lowest priority. The draft restructuring programme does not include a
provision on a duty to make supplementary payments
* The confirmation and entry into force of the draft restructuring programme
requires the fulfilment of a number of conditions, including Talvivaara
negotiating an agreement with the party that purchases Talvivaara Sotkamo
mining operations based on which Talvivaara can obtain sufficient cash flow
to cover the costs of its business operations and has the right to make an
investment sufficient to acquire a significant minority stake in the Sotkamo
operations, or Talvivaara completes a different financial and/or operative
arrangement that will secure the continuance of the Company's eligible
business
* Following the termination notice by the bankruptcy estate of Talvivaara
Sotkamo on 30 March 2015, Nyrstar contested the right of the bankruptcy
estate to terminate the Zinc Streaming Agreement or the Streaming Holiday
Agreement. Simultaneously, Nyrstar sent a notice to the Company, reserving
their right to issue a demand to the Company as a guarantor for a payment of
all sums due by Talvivaara Sotkamo under the Zinc Streaming Agreement and
the Streaming Holiday Agreement, should the bankruptcy estate of Talvivaara
Sotkamo fail to do so. Due to previous intercreditor arrangements, the
extent of the Company's guarantee liability towards Nyrstar remains unclear
* On 14 April 2015, the District Court of Espoo initiated a creditors' voting
procedure on the draft restructuring programme. The approval of the draft
restructuring programme requires express support from the necessary number
of creditors. The voting period expires on 6 May 2015
CEO Pekka Perä comments: "Despite of all hard work, technical success and
intense negotiations by the Talvivaara team, the Company had no option but file
the operating subsidiary Talvivaara Sotkamo Oy in bankruptcy in November 2014.
As a result, the nature of the Company's business changed radically from
operating a world class mine to renting operational assets and selling services
to the bankruptcy estate. The re-structuring process had been started in the end
of the year 2013 in the Company and in the operating subsidiary, but due to
complexity of the deal and the weakness of commodities market, the Company and
the Administrator did not find a solution in time to continue funding the
operation.
In the new situation, after the operating company's bankruptcy, the Company
signed Lease and Services Contracts with the bankruptcy estate. The contracts
ensured that the bankruptcy estate has access to all the knowledge and necessary
operating assets of the Company at its disposal and that the Company is able to
continue investigating the best possible solution for its shareholders,
creditors and employees.
One of the biggest hurdles for new investors was the environmental permitting
situation as the existing permits did not allow environmentally safe operation
of the mine. The new environmental permit decision received in April 2014 made
the situation for re-financing of the operation even worse. All year the Company
expected to receive a resolution for appeals submitted in June 2013 regarding
the water release permits from Administrative Court only to be informed, after
almost a year and a half of waiting, that the Court will combine the appeals
with appeals submitted for the new environmental permit granted 12 months later.
This seriously undermined the Company's possibilities for re-financing.
Talvivaara was under unprecedented public attention throughout the period, and
as before, the total lack of relativity was the striking element in the media
coverage. No doubt, this perverted publicity had significant effects on
investors, authorities and politicians.
Those familiar with the operation had no doubt on the viability of the
operation, and the success in the metals plant operation proved that previously
encountered ramp up-problems had been solved. The achieved utilisation rates
clearly above 90% demonstrated the learning curve. Over the reporting period
until the operating company's bankruptcy, the water management was carried out
effectively and responsibly under very challenging conditions.
Regardless of all the hardship during the year 2014, the personnel once again
proved their perseverance and their commitment to Talvivaara for which I
sincerely thank them. The Board of Directors and the management have been under
enormous pressure from every direction, but they still have rationally and
tenaciously pursued the best long term solution for all the Talvivaara
stakeholders. Many of the key components required for a viable future are not in
the hands of Company, but all the paths have been and will be investigated."
Enquiries:
Talvivaara Mining Company Plc Tel. +358 20 712 9800
Pekka Perä, CEO
Pekka Erkinheimo, Deputy CEO
Talvivaara's annual results review 2014
Introduction
Following the bankruptcy of Talvivaara Mining Company Plc's ("Talvivaara" or the"Company") operating subsidiary Talvivaara Sotkamo Ltd ("Talvivaara Sotkamo") on
6 November 2014, trading of Talvivaara's shares on the Helsinki Stock Exchange
was suspended. The suspension of trading continues as at the date of the
publication of the Company's financial statements 30 April 2015.
Talvivaara has been in corporate reorganisation throughout the review period of
1 January 2014 - 31 December 2014. The corporate reorganisation continues as at
the date of publication of the Company's financial statements 30 April 2015.
Talvivaara's financial statements for the financial year ended 31 December 2014
have been prepared on a basis other than going concern. As described in more
detail in the financial statements 2014, the chosen reporting basis results from
the existence of material uncertainty that casts significant doubt upon the
Company's ability to realise its assets and discharge its liabilities in the
normal course of business and from the lack of visibility on the Company's
operational environment twelve months beyond the date of reporting.
Currently, Talvivaara finances its operations by providing administrative and
technical services and by leasing certain critical machinery and equipment to
the bankruptcy estate of Talvivaara Sotkamo and for the time being continues to
pursue its target of securing sufficient financing to participate, as a member
of a consortium, in the acquisition of the mining operations from the bankruptcy
estate of Talvivaara Sotkamo or securing a different financial and/or operative
arrangement that will secure the continuance of the Company's eligible business.
Review of Operations
Following the bankruptcy of Talvivaara Sotkamo on 6 November 2014, Talvivaara
has not had control over the operations at the Sotkamo mine and is therefore no
longer in a position to continue reporting on the status and development of the
Sotkamo mining operations, including information on production levels and water
management.
Prior to the bankruptcy, the activities of the Talvivaara group comprised of the
operations at the Talvivaara mine primarily carried out by Talvivaara Sotkamo
and a broad range of support functions and expert services provided by the
Company. Throughout its existence, the Company has employed the majority of the
group's managerial resources and technical experts and therefore provided the
operating subsidiary with e.g. administrative, financial, communications,
technical, laboratory, commercial, legal and sustainability services against
agreed fees. In addition, the Company owns a lime and limestone handling plant
and reception station, which are critical for the production and water treatment
processes of the mine, and which the Company has been leasing to Talvivaara
Sotkamo since 2009.
In order to minimise any environmental risks, assist the running of the ongoing
operations and to facilitate the sales process of the mining assets, Talvivaara
and the bankruptcy estate of Talvivaara Sotkamo agreed that the services and
equipment leases provided by the Company shall continue. To this effect, the
parties entered on 19 November 2014 into the Administration and Laboratory
Services Agreement and the Agreement on Lease of Lime and Limestone Handling
Plant and Reception Station. The agreements detail the Company's personnel
resources and equipment that are available and critical for the environmentally
and occupationally safe operations at the Sotkamo mine and state the agreed
pricing for the services provided. Invoicing of personnel resources is based on
hourly rates, expenses incurred in the provision of the services are charged at
cost added with an administrative margin, and for the limestone plant a monthly
rent has been agreed. The new agreements are largely in line with those
previously in place between Talvivaara and Talvivaara Sotkamo with only minor
modifications resulting from the changed circumstances following Talvivaara
Sotkamo's bankruptcy.
On 19 December 2014, Talvivaara decided to place its dormant subsidiaries
Talvivaara Exploration Oy, Talvivaara Infrastructure Oy, Bream Lake Energy Oy,
and Talvivaara Management Oy in liquidation. Prior to the decision to liquidate
these subsidiaries, Talvivaara converted all its receivables from these
companies into equity and the subsidiaries wrote off all their receivables from
the bankruptcy estate of Talvivaara Sotkamo. In addition, Talvivaara sold on 30
December 2014 all the shares of its subsidiary incorporated under the laws of
Sweden, Hyena Holding AB, to a third party independent of the management and
significant shareholders against a nominal purchase price basing on the amount
of liquid assets of Hyena Holding AB at the time of transaction. Placing the
subsidiaries in liquidation and the conveyance of the shares in Hyena Holding AB
was in line with the Company's plan to simplify the group structure and leave
the Company as the single reporting entity. Consequently, the Company's
financial statements for the year ended 31 December 2014, which have been
prepared in accordance with IFRS, encompass solely the Company and do not
include consolidated statements of the former Talvivaara group.
The Annual General Meeting of the Company resolved on 12 June 2014 to authorise
the Board of Directors to cancel the listing of the Company's shares on the
official list maintained by the UK Financial Services Authority and remove such
shares from trading on the main market for listed securities of London Stock
Exchange plc. The listing of the shares on the Official List of the United
Kingdom Listing Authority was cancelled with effect from (and including) 14 July
2014.
Financial review
Financial result
The operating loss for 2014 was EUR (702.6) million (2013: EUR (697.8) million),
consisting mainly of impairment charges, write-offs and provisions resulting
from the bankruptcy of Talvivaara Sotkamo on 6 November 2014 and from the
application of the non-going concern principle. An impairment charge of EUR
(470.6) on subsidiary investments was made at the year-end 2014. In addition,
the provision for the potential 203.4 EUR million termination sum guarantee
liability towards Nyrstar as well as the write-off of the Company's 24.9 EUR
million unsecured receivable from Talvivaara Sotkamo were booked in other
operating expenses.
Finance income for 2014 was EUR 37.5 million (2013: EUR 40.9 million) and
consisted mainly of interests on deposits and receivables. Finance costs of EUR
(109.7) million (2013: EUR (48) million) resulted mainly from recognition of the
guarantee liability for the debts owed by Talvivaara Sotkamo to Finnvera and
Nystar as well as from interest and related financing expenses on borrowings.
The loss for 2014 amounted to EUR (774.9) million (2013: EUR (709.1) million)
reflecting the impairment charges, write-offs and provisions resulting from the
bankruptcy of Talvivaara Sotkamo and from the application of the non-going
concern principle. Earnings per share was EUR (0.41) (2013: EUR (0.50)).
Liquidity
As at 1 January 2014, the Talvivaara group had cash and cash equivalents
amounting to EUR 5.9 million. With the existing cash, income generated from
nickel and cobalt sales to Norilsk Nickel Harjavalta Oy and the loan drawn down
from Nyrstar Sales and Marketing AG ("Nyrstar") upon zinc deliveries, the group
was able to continue operations until 6 November 2014. On that date, following
intensive financing discussions with key stakeholders, potential new investors
and the Republic of Finland, Talvivaara was informed that short term financing
required to meet Talvivaara Sotkamo's immediate working capital needs was not
available in the required time frame. As a result, the Board of Directors of
Talvivaara Sotkamo decided to file Talvivaara Sotkamo for bankruptcy. The filing
was done jointly with the Administrator of Talvivaara Sotkamo's corporate
reorganisation proceedings and later the same day approved by the District Court
of Espoo.
Subsequent to Talvivaara Sotkamo's bankruptcy, the Company declared EUR 31.5
million, including EUR 5.6 million in value added tax ("VAT"), of its sales
receivables from Talvivaara Sotkamo as credit losses and accordingly claimed and
received a refund of the associated VAT.
To date, the Company finances its day-to-day operations by providing
administrative and technical services and the lease of critical machinery and
equipment to the bankruptcy estate of Talvivaara Sotkamo.
As at 31 December 2014, the Company's cash and cash equivalents amount to EUR
5.3 million.
Financing
On 1 April 2014, the Company as a guarantor and Talvivaara Sotkamo entered into
a Loan and Streaming Holiday Agreement (the "Streaming Holiday Agreement') with
Nyrstar Sales and Marketing AG ("Nyrstar"). Under the Streaming Holiday
Agreement, Nyrstar made available to Talvivaara Sotkamo a loan facility of up to
EUR 20 million. Nyrstar made the facility available in several tranches with the
amount of each advance calculated with reference to a corresponding delivery by
Talvivaara Sotkamo of zinc in concentrate under the original Zinc Streaming
Agreement of February 2010.
In the short term, the Agreement enabled the continuation of the Company and
Talvivaara Sotkamo's corporate reorganisation and the process, whereby
Talvivaara group explored the options of identifying potential investor(s) to
participate in a long-term, overall financial solution for the Talvivaara group.
Nyrstar's obligation to extend financing under the loan facility was to cease at
the earlier of the aggregate amount outstanding including accrued interest
exceeding EUR 20 million or the commencement of a streaming holiday. Prior to
the bankruptcy of Talvivaara Sotkamo, Talvivaara Sotkamo had drawn down EUR
12.8 million of the Nyrstar loan facility (including interest through October
2014).
Equity
Following Talvivaara Sotkamo's bankruptcy, the Company wrote off fully its
receivables from and the shares held in Talvivaara Sotkamo. As a result,
Talvivaara lost its equity, which has been acknowledged by the Company's Board
of Directors and notified to the trade register. Talvivaara recognised its
weakening financial position already in November 2013 and took measures to
mitigate this by applying for corporate reorganisation. The corporate
reorganisation proceedings of the Company were commenced on 29 November 2013 and
its continuation was approved by the Annual General Meeting of Shareholders of
the Company on 12 June 2014.
Furthermore, even if the Company's restructuring debts were cut in accordance
with the Administrator's final draft restructuring programme, the assets of the
Company would still be less than the aggregate amount of the Company's remaining
liabilities following the 99-percent-haircut of the unsecured restructuring
debts or even following a 100% conversion of the unsecured restructuring debts
into equity of the Company. More information on the negative equity is provided
under Note 1.
Provisions and other items recognised based on restructuring programme
Under the Loan and Streaming Holiday Agreement, the Company has issued a
guarantee for the termination sum amounting to 203.4 million euros that
Talvivaara Sotkamo would have to pay to Nyrstar due to a premature termination
of the zinc streaming agreement between the companies. The liability of the
guarantor in respect of the termination sum would, if applicable, fall due for
payment on the date falling 12 months after the date on which Talvivaara Sotkamo
was placed in bankruptcy. As at 31 December 2014, the Zinc Streaming Agreement
had not been terminated, despite the bankruptcy of Talvivaara Sotkamo. However,
as explained in more detail in paragraphs "Reporting basis - other than going-
concern" and "Events after the review period", the Company has provided the full
amount as a provision on the balance sheet based on uncertainties related to the
treatment of the Company's guarantee obligation.
In addition, the Company has issued a floating charge security for the loans
drawn from Finnvera by Talvivaara Sotkamo, amounting in aggregate to 58.7
million euros, including accrued interest. The aggregated amount consists of two
parts: 50.7 million euros the Company has guaranteed as its own debt, and 8.0
million euros the Company has secured with a floating charge security issued as
a third-party-security. In the Administrator's final draft restructuring
programme, liability of the Company under the floating charge security to
Finnvera has been valued to 3.4 million euros. This is a liability referred to
in section 3(3) of the Restructuring of Enterprises Act, and it is subject to
the same rules as the secured debt of the Company. As Finnvera's 8.0 million
euros claim is not the Company's own debt, it has not been taken into account as
restructuring debt. However, this liability has been taken into account in the
calculation of the amount of secured and business mortgage debt, and payments
will be made on it in the same manner as on the Company's debts secured by
collateral and business mortgages. However, due to the applied non-going concern
principle, the Company has also recognised the full 8.0 million euros as a
liability on the balance sheet.
Off-balance sheet and contingent liabilities
Talvivaara Sotkamo has largely covered the environmental bond requirement under
the current environmental permit by a guarantee insurance provided by Atradius
Credit Insurance NV ("Atradius"). The coverage amounts to EUR 31.9 million as at
the date of the publication of the Company's financial statements 30 April
2015. According to the environmental permit, the required bond is to be placed
to cover the cost of the restoration of waste areas (gypsum ponds, heap areas),
which is anticipated to take place partly during the life of the mine, as waste
areas are filled to their maximum levels, and partly as part of the eventual
closure of the mine. In the event such restoration activities took place without
Talvivaara Sotkamo carrying the cost, the expenses would initially be covered by
Atradius. However, eventually Atradius would claim the cost back from the
Company, which has given counter-indemnity for such costs to Atradius. The
guaranteed liability is part of the Company's restructuring debt and any
payments that fall due under the guarantee are finally determined in the
Company's restructuring programme and repaid according to the authorized payment
schedule.
Furthermore, even if the Company's restructuring debts were cut in accordance
with the Administrator's final draft restructuring programme, the assets of the
Company would still be less than the aggregate amount of the Company's remaining
liabilities following the 99-percent-haircut of the unsecured restructuring
debts or even following a 100% conversion of the unsecured restructuring debts
into equity of the Company. The exact amount of the negative funding balance
will depend, among others, on the extent to which unsecured restructuring debts
are converted into equity of the Company, and on the aggregate amount of the
Company's other liabilities not subject to restructuring at the date of entry
into force of the restructuring programme. More information on the negative
equity is provided under Note 1.
Assets
On the statement of financial position as at 31 December 2014, property, plant
and equipment totalled 5.0 million euros (31 December 2013: 8.9 million euros)
after an impairment charge of EUR 3.1 million. Intangible assets totalled 0.6
million euros (31 December 2013: 2.4 million euros) after an impairment charge
of 1.7 million euros.
Shares with a value of 7.2 million euros in Majakkavoima Oy and Katternö
Kärnkraft Ab, companies holding shares in Fennovoima nuclear power company, were
fully written down as under the reporting basis other than going concern, the
Company does not recognise any value in such holdings with a view to its current
business operations.
Value of the buildings located in the Talvivaara Sotkamo site were fully written
down as the Company lost control of the asset due to the real estate mortgage
given by Talvivaara Sotkamo as a result of its bankruptcy.
Following the bankruptcy of Talvivaara Sotkamo, the Company wrote down its sales
receivables of approximately EUR 24.9 million from Talvivaara Sotkamo.
On 31 December 2014, cash and cash equivalents totalled EUR 5.3 million (31
December 2013: EUR 4.7 million).
Corporate reorganisation
The Company and Talvivaara Sotkamo applied for corporate reorganisation on 15
November 2013 by filing related applications with the District Court of Espoo,
Finland. The District Court of Espoo took the decision to commence a corporate
reorganisation process in respect of the Company on 29 November 2013 and in
respect of Talvivaara Sotkamo on 17 December 2013. The District Court of Espoo
appointed Mr. Pekka Jaatinen, Attorney-at-Law, from Castrèn & Snellman Attorneys
to act as the Administrator in respect of the corporate reorganisation of both
the Company and Talvivaara Sotkamo.
In reorganisation proceedings governed by the Finnish Restructuring of
Enterprises Act (47/1993, as amended), both the business operations and the
debts of a company may be reorganised and restructured. As a result of such
reorganisation, a company can either continue its operations or, if the
reorganisation fails, initiate bankruptcy proceedings.
The central task of the Administrator is to draw up a proposal for a
reorganisation plan in collaboration with the various parties within a time
limit set by the District Court of Espoo. An important part of the
reorganisation plan is the payment arrangements for debts. In the reorganisation
plan, debts may be restructured in any of the following ways: (i) through
changing the payment schedule; (ii) applying payments made by the debtor first
in amortisation of the principal amount of the debt and only thereafter as
payments of other debt related costs, such as interest; (iii) reducing debt
related costs, including the interest rate; and (iv) reducing the amount of the
unpaid debt. The commencement of a reorganisation process does not result in all
the debts of the relevant debtor becoming due and payable. Any debts that are
not considered restructuring debts are to be repaid in accordance with their
original terms.
The reports on the financial status of the Company and Talvivaara Sotkamo were
completed by the Administrator of the corporate reorganisation on 14 April
2014. According to the Administrator, an executable restructuring programme can
be set up for both companies, provided that financing solutions for the interim
period and for the longer term are achieved.
Proposals for both companies' respective reorganisation plans were submitted by
the Administrator on 30 September 2014. Under the draft restructuring programme
of Talvivaara Sotkamo, a one-off payment was suggested to be made to the
creditors with the possibility to make supplementary payments, while a customary
eight-year restructuring programme would be drafted for Talvivaara. The payments
to creditors would take place during 2017-2022 so that the creditors would be
paid 10% of the capital cut in accordance with the programme during each of the
first two years (2017-2018) and 20% thereafter (2019-2022). The secured debts
and leasing debts of Talvivaara would be paid off according to the same schedule
as the unsecured debts. The Administrator estimated that the part of all the
secured restructuring debt of Talvivaara Sotkamo (in aggregate EUR 130 million)
that constitutes financing debt is EUR 53 million after the deduction of
liquidation costs. The Administrator proposed that EUR 21.9 million of these
secured debts would be payable upon execution of the realisation restructuring
process. The secured creditors and the parties to the sale and purchase of
Talvivaara Sotkamo's business would have to agree separately on how the
remaining balance of the secured financing debt (EUR 31.1 million) would be
paid.
The Administrator estimated that the amount of debt secured by a floating charge
issued by Talvivaara is EUR 7.5 million and the amount of debt secured by other
securities would be EUR 3 million after the deduction of liquidation costs. The
Administrator proposed that the capital of unsecured debts of Talvivaara Sotkamo
(in aggregate not less than EUR 956 million) and Talvivaara (in aggregate EUR
478 million) be cut by 99% for Talvivaara Sotkamo and by 97% for Talvivaara. No
payments would be made on debts with lowest priority of either of the companies.
Finally, the draft restructuring programmes proposed that the holders of
unsecured debt of Talvivaara Sotkamo and Talvivaara would be entitled to receive
supplementary payments under certain circumstances. The duty to make
supplementary payments would remain valid for eight years.
The District Court of Espoo gave on 2 October 2014 an interim decision relating
to the draft restructuring programmes of Talvivaara and Talvivaara Sotkamo,
ruling that the processing of the draft restructuring programmes filed by the
Administrator on 30 September 2014 shall be continued, and that the creditors
shall present their claims regarding the receivables listed in the draft
restructuring programmes to the Administrator by 24 October 2014. The
Administrator shall in its turn supplement the draft restructuring programmes by
2 December 2014, and the creditors will thereafter have a possibility to give
their statement on the draft programmes by 19 December 2014.
On 28 November 2014, the District Court extended the deadline for the re-
submission of the restructuring programme proposal until 30 January 2015.
Reporting basis - other than going concern
Talvivaara's financial statements for the financial year ended 31 December 2014
have been prepared on a basis other than going concern. The chosen reporting
basis results from the existence of material uncertainty that casts significant
doubt upon the Company's ability to realise its assets and discharge its
liabilities in the normal course of business and from the lack of visibility on
the Company's operational environment twelve months beyond the date of
reporting. However, Talvivaara currently finances its day-to-day operations by
providing administrative and technical services and the lease of machinery and
equipment critical to the bankruptcy estate of Talvivaara Sotkamo. These
contractual arrangements have helped the Company to discharge all of its new
liabilities as and when they fell due. Therefore, the requisite adjustments
resulting from the chosen reporting basis have, where applicable, been made in
the 2014 financial statements to the carrying amounts of the Company's assets
and liabilities, but no reserve has been made in the Company's balance sheet for
the costs relating to winding down of the operations.
Talvivaara's ability to revise its reporting basis and to regain its status as a
going concern is dependent, among other things, on the successful completion of
the Company's corporate reorganisation proceedings, which requires that (i) a
requisite number of the Company's creditors vote in favour of the
Administrator's draft restructuring programme submitted on 13 March 2015, (ii)
Talvivaara succeeds in completing an arrangement that will secure the necessary
cash flow for the Company to discharge all of its liabilities and the
continuance of the Company's eligible business, and (iii) the shareholders of
Talvivaara approve the possibility for a conversion of unsecured restructuring
debts into shares in the Company as well as the financial arrangement required
to discharge the remaining restructuring debts and for covering other possible
liabilities to the extent the Company's other funds are not sufficient for such
purpose. As of the date of the Company's financial statements 29 April 2015,
there is no certainty as to whether the Company can fulfil all the set
requirements within the given time frame.
Talvivaara Sotkamo has drawn down EUR 12.8 million (including interest through
October 2014), in loans from Nyrstar under the Streaming Holiday Agreement
between Talvivaara, Talvivaara Sotkamo and Nyrstar. Upon the bankruptcy of
Talvivaara Sotkamo, Nyrstar is entitled to declare that all or part of the
loans, together with accrued interest, be payable on demand by Talvivaara
Sotkamo or Talvivaara, in its capacity as the guarantor. If Nyrstar was to
demand immediate repayment of the EUR 12.8 million loans guaranteed by the
Company, the Company might not have sufficient cash reserves or access to
additional liquidity to make the required payment.
Furthermore, the Company has issued a guarantee for the termination sum
amounting to approximately 203.4 million euros that Talvivaara Sotkamo would
have to pay to Nyrstar due to a premature termination of the Zinc Streaming
Agreement between the companies. On 30 March 2015, the bankruptcy estate of
Talvivaara Sotkamo notified Nyrstar that it does not commit to the Zinc
Streaming Agreement or the Streaming Holiday Agreement. Consequently, on 9 April
2015 Nyrstar sent a notice to the Company, reserving their right to issue a
demand to the Company as a guarantor for a payment of all sums due by Talvivaara
Sotkamo under the Zinc Streaming Agreement and the Streaming Holiday Agreement,
should the bankruptcy estate of Talvivaara Sotkamo fail to do so. However, based
on the Intercreditor Agreements binding on the Company and Nyrstar, the Company
cannot make any payments to Nyrstar in relation to the termination sum if full
payment has not been made to the Company's other lenders having receivables with
a higher ranking priority. As the lenders having a higher ranking priority will
not receive a full payment on their receivables due to Talvivaara Sotkamo's
bankruptcy and the Company's restructuring proceedings, the Company cannot make
payments relating to the termination sum to Nyrstar due to the subordinate
position of Nyrstar's claim. Based on the above, the Administrator did not
include the Company's guarantee liability for the termination sum in the
restructuring debts or in the new liabilities arisen during the proceedings in
his final draft restructuring programme, which decision was not contested by
Nyrstar within the given time frame expiring on 27 March 2015. However, if
Nyrstar was later to contest the treatment of the Company's guarantee liability
successfully and thereby be allowed to demand payment from the Company under the
guarantee, the Company would likely not have sufficient cash reserves or access
to additional liquidity to make the required payment. In addition, any
uncertainty surrounding the issue would have a significant negative effect on
the Company's ability to raise new funds required for the successful fulfilment
of the conditions for the entry into force of the Company's restructuring
programme. Based on the above and on the applied non-going concern principle,
the Company has provided the full amount of the guarantee liability as a
provision on its balance sheet.
Business development projects
Talvivaara acquired in 2011-2012 an approximately 60MW capacity share in the
Fennovoima nuclear project in Finland. Due to the Company's ongoing corporate
reorganisation proceedings, Talvivaara is currently not in a position to make
further investments into the project and has therefore not been able to commit
to payments that would, according to plan, fall due during the course of 2014.
Talvivaara had an option until the early autumn of 2014 to recommit to
Fennovoima's financing and get an ownership corresponding to 47 MW of
electricity, but this option was not exercised.
Legal proceedings
As at the date of the Company's financial statements on 29 April 2015, there are
a number of on-going legal proceedings in relation to environmental and
occupational health and safety issues concerning a number of current and former
managers of Talvivaara.
Talvivaara announced on 22 September 2014 that the consideration of charges,
which related to Talvivaara Sotkamo's gypsum pond leakages of November 2012 and
April 2013 and the sodium, sulphate and manganese discharges that exceeded the
anticipated amounts, were completed. The prosecutor decided not to bring charges
against thirteen specialists and members of the middle management that were
heard as suspects. Instead, charges were brought against four members of
Talvivaara's management, including CEO Pekka Perä and former CEO Harri Natunen.
The charges concern aggravated impairment of the environment. According to the
Company, the completed pre-trial investigation and consideration of charges have
given the Company no reason to change its previously announced view of no crime
having been committed, and the Company does not share the prosecutor's view of
the threshold for charges having been met. The Company is however looking
forward to the opportunity to have the facts relating to the matter as well as
the then-current operating conditions of the Company discussed in an open court.
On 22 October 2014, Talvivaara announced that the consideration of charges
relating to the industrial accident of March 2012 at the Sotkamo mine were
completed. Following the accident, an employee of Talvivaara Sotkamo who was not
wearing appropriate safety equipment lost his life due to a localised, temporary
excess gas discharge nearby the metals recovery plant. Three former managers of
Talvivaara Sotkamo's metals recovery plant are charged with involuntary
manslaughter and work safety offence. The prosecutor is requesting a fine to be
imposed on the accused. The persons being charged include an employee of the
Company but does not include any current or former members of the Executive
Committee of Talvivaara. The Company does not share the prosecutor's view of the
threshold for charges having been met.
Risk management and key risks
Talvivaara's near-term risk factors include particularly such risks that relate
to its ongoing corporate reorganisation proceedings, financing and sufficiency
of funds to meet its actual and potential liabilities.
The approval and authorisation of the proposed restructuring programme of
Talvivaara is conditional, among other things, on (i) a requisite number of the
Company's creditors voting in favour of the Administrator's draft restructuring
programme, (ii) Talvivaara succeeding in completing an arrangement that will
secure the necessary cash flow for the Company to discharge all of its
liabilities and the continuance of the Company's eligible business, and (iii)
the shareholders of Talvivaara approving the possibility for a conversion of
unsecured restructuring debts into shares in the Company as well as the
financial arrangement required to discharge the remaining restructuring debts
and to cover other possible liabilities to the extent the Company's other funds
are not sufficient for such purpose. As at the date of the Company's financial
statements 29 April 2015, there is no certainty as to whether the Company can
fulfil all the set requirements within the given time frame.
Although the Board of Directors believes that a corporate reorganisation is a
viable option for Talvivaara, there can be no assurance that the proposed
restructuring programme of the Company will be approved and authorised or be
ultimately successful. The corporate reorganisation process can fail for a
number of reasons, including due to an insufficiency of funds to implement or
complete the restructuring programme, changes in circumstances affecting the
financial viability of Talvivaara, including, for example, termination of the
service and lease agreements between the Company and the bankruptcy estate of
Talvivaara Sotkamo, or insufficient income from the services provided to the
bankruptcy estate or the contemplated new entity running the mining operations.
If the corporate reorganisation fails for these or any other reasons, it could
result in the bankruptcy of the Company.
Failure by the Company to reach final clarity on the treatment of its guarantee
obligation for the termination sum set forth in the Zinc Streaming Agreement may
impair or even hinder the Company's efforts to raise new funds for the
successful fulfilment of the conditions for the entry into force of the
Company's restructuring programme. Whilst the Company shares the view of the
Administrator on the treatment of the guarantee obligation for the termination
sum under the Zinc Streaming Agreement and considers the view well-founded,
there is no certainty that a competent court or a dispute resolution authority
would arrive at the same outcome, should Nyrstar take legal actions to contest
the chosen view. Furthermore, even if such legal actions were not initiated by
Nyrstar, any uncertainty surrounding the issue would have a significant negative
effect on the Company's ability to raise new funds required for the successful
fulfilment of the conditions for the entry into force of the Company's
restructuring programme.
The right of conversion of debt into equity included in the restructuring
programme of Talvivaara and/or the issuance of new equity instruments may lead
to a significant dilution of the existing shareholding of the Company. The
extent of dilution will eventually be determined by the aggregate amount of the
restructuring debts to be converted into shares at the determined conversion
rate of EUR 0.1144 per share as well as by the subscription price of the newly
issued shares offered and the amount of funds raised in, the potential equity
financing.
The Sotkamo mine has faced various difficulties since the commissioning of the
mine in 2008 and 2009. These difficulties include, among others, operational
difficulties concerning the mine's production and performance, environmental
issues as well as legal and administrative proceedings involving the Sotkamo
mine and certain members of Talvivaara's management. Therefore, even in case
Talvivaara acquires a stake in the company carrying on the Sotkamo mining
operations, the Sotkamo mine may not be able to successfully address various
operational, environmental and other difficulties facing the Sotkamo mine and
shareholders could ultimately lose their entire investment in the Company.
Further, there can be no certainty that the financing potentially available to
Talvivaara would be sufficient to ramp-up production at the Sotkamo mine or that
it would ever achieve profitability.
Personnel
Headcount and remuneration
Talvivaara's headcount decreased somewhat from the previous year and was 53 at
the end of 2014 (2013: 61). At the end of 2014, 49 % (2013: 46%) of Talvivaara's
employees were men and 51 % (2013: 54 %) were women. The average age of the
Company's employees was 40.4 years (2013: 40.3 years).
In 2014, Talvivaara decided to lay-off 3 employees for an undefined period to
support the reorganization process.
Talvivaara's personnel comprises an expert organisation, the core competences of
which include, for example, analytical laboratory services, bioheapleaching and
other production processes, procurement, environmental safety, risk management
and communications. The organisation has in the past provided critical services
to Talvivaara Sotkamo and it continues to provide the same services to the
bankruptcy estate of Talvivaara Sotkamo as agreed between the Company and the
bankruptcy estate. The salaries and wages of Talvivaara's personnel are based on
industry-wide collective agreements.
The total compensation of the key individuals has traditionally consisted of a
base salary and short and long term incentive schemes based on annual bonuses,
stock options and other share-based incentive schemes. The subscription periods
for the Company's Stock Options 2007A, 2007B and 2007C expired on 31 March
2012, on 31 March 2013 and on 31 March 2014 respectively, and the vesting
criteria set by the Board of Directors for the Company's Stock Options
2011A, 2011B and 2011C were not fulfilled and subsequently the Stock Options
2011A, 2011B and 2011C were cancelled. The group personnel fund set up to manage
the earnings bonuses was dismantled following the bankruptcy of Talvivaara
Sotkamo. In addition, the management holding company Talvivaara Management Oy
was dismantled in December 2014. Consequently, the Company does not currently
have any long term incentive schemes in place.
However, due to exceptional circumstances surrounding the Company during 2014,
the Company focused on securing the engagement of its key individuals by
strengthening and rewarding the engagement of the key individuals through a
retention bonus scheme at the end of 2013. As of 1 January 2014, the scheme
concerned approximately 20 employees of the Company. The CEO of the Company did
not participate in the scheme. The maximum bonus potential under the scheme
equalled three or four months' base salary of a participant. The scheme expired
at the end of the year 2014, and it has not been extended into the year 2015.
Management changes
Lassi Lammassaari, M.Sc. (Environmental Engineering) was appointed Chief
Corporate Development Officer as of 27 February 2014. In his position he is a
member of the Executive Committee and reports to CEO Pekka Perä.
Chief Operating Officer Darin Cooper resigned from his position on 7 March 2014
to pursue his career outside the Company. Chief Technology Officer Pertti
Pekkala subsequently assumed interim responsibility for the Sotkamo mine's
operations and kept the position until the bankruptcy of Talvivaara Sotkamo on
6 November 2014.
Non-Executive Director Kirsi Sormunen announced her resignation from the
Company's Board of Directors due to personal reasons on 7 March 2014.
On 30 October 2014, the Company announced that Saila Miettinen-Lähde who had
been CFO of the Company since 2005 and Deputy CEO since 2012 had decided to
leave the Company during the spring of 2015. In preparation for her departure,
Chief Commercial Officer Pekka Erkinheimo was appointed Deputy CEO with
immediate effect. The finance function has been reporting to Mr. Erkinheimo
since 1 February 2015.
Corporate governance statement
Talvivaara issues its Corporate Governance Statement of 2014 and publishes it on
the Company's website at www.talvivaara.com on 30 April 2015. The Corporate
Governance Statement does not form part of the Board of Directors' Report.
Resolutions of the Annual General Meeting
Talvivaara's Annual General Meeting was held on 12 June 2014 in Sotkamo,
Finland. All the resolutions proposed, as set out in the notice of the meeting,
were duly passed. The resolutions of the AGM included:
* that no dividend be paid for the financial year 2013;
* that the annual fee payable to the members of the Board for the term until
the close of the Annual General Meeting in 2015 be as follows: Chairman of
the Board of Directors: EUR 84,000/year, Deputy Chairman (Senior Independent
Director): EUR 48,000/year, Chairmen of the Board Committees: EUR
48,000/year, other Non-executive Directors: EUR 33,500/year and Executive
Directors EUR 33,500/year. In addition to the annual fee, a fee of EUR 600
per meeting of the Board of Directors or the Board Committees taking place
in the member's domicile shall be payable. Should the venue of the meeting
be in a European country other than the member's domicile, the fee payable
per meeting shall be EUR 1,200. However, a fee of EUR 2,400 per meeting
shall be payable, if the member's domicile or the venue of the meeting is
outside Europe. For teleconference meetings the fee payable shall be EUR
600 per meeting;
* that the number of Board members be seven and that Mr. Tapani Järvinen, Mr.
Pekka Perä, Mr. Graham Titcombe, Mr. Edward Haslam, Mr. Stuart Murray and
Ms. Maija-Liisa Friman be re-elected as Board members and Ms. Solveig
Törnroos-Huhtamäki be appointed as new member of the Board;
* that the auditor be reimbursed according to the auditor's approved invoice
and authorised public accountants PricewaterhouseCoopers Oy be elected as
the Company's auditor for the financial year 2014;
* thatthe corporate reorganisation application of the Company be continued;
* that the Board of Directors be authorised to cancel the listing of the
Company's shares on the official list maintained by the UK Financial
Services Authority and remove such shares from trading on the main market
for listed securities of London Stock Exchange plc;
* that the Articles of Association of the Company be amended. The resolution
was conditional upon the completion of the cancellation of the listing of
the Company's shares on the official list maintained by the UK Financial
Services Authority and removing such shares from trading on the main market
for listed securities of London Stock Exchange plc;
* a share issue of 190,615,000 new shares to the Company without consideration
and authorization of the Board to resolve on the conveyance of such shares.
The share conveyance authorisation is valid until 11 June 2019.However, the
shares may not be conveyed in any debt to equity conversion in accordance
with the potential corporate reorganisation plan of the Company.
* authorisation of the Board of Directors to decide on the repurchase, in one
or several transactions, of a maximum of 190,615,000 of the treasury
shares.The repurchase authorisation is valid until 11 December 2015.
Shares and shareholders
The number of shares issued and outstanding and registered on the Euroclear
Shareholder Register as of 31 December 2014 was 2,096,782,480. Including the
effect of the EUR 225 million convertible bond of 16 December 2010, the
authorized full number of shares of the Company amounted to 2,195,400,415.
The share subscription period for Stock Options 2007A was between 1 April 2010
and 31 March 2012. By the end of the subscription period a total of 2,279,373
Talvivaara's new shares were subscribed for under the stock option rights
2007A. A total of 53,727 Stock Options 2007A remained unexercised following the
end of the subscription period and expired.
The share subscription period for Stock Options 2007B was between 1 April 2011
and 31 March 2013. By the end of the subscription period a total of 48,763
Talvivaara's new shares were subscribed for under the Stock Options 2007B. A
total of 2,284,337 Stock Options 2007B remained unexercised following the end of
the subscription period and expired.
After the adjustments to the terms and conditions of the Option Scheme of 2007
in April 2013, a total of 16,289,000 Stock Options 2007C were issued to
employees and the subscription period for the Stock Options 2007C was between 1
April 2012 and 31 March 2014. No new shares of Talvivaara were subscribed for
under the Stock Options 2007C between 1 January and 31 March 2014. A total of
16,289,000 Stock Options 2007C remained unexercised following the end of the
subscription period and expired.
The vesting criteria for Stock Options 2011A were not fulfilled and the Stock
Options 2011A were cancelled at the end of 2012. As the vesting criteria for
Stock Options 2011B were not fulfilled the options were cancelled at the end of
2013. Similarly, the vesting criteria for Stock Options 2011C were not fulfilled
and the Stock Options 2011C were cancelled at the end of 2014.
In March 2013, an Extraordinary General Meeting of Talvivaara resolved to to
authorize the Board of Directors to undertake a share issue for consideration in
accordance with the shareholders' pre-emptive subscription rights. The share
issue was completed in April 2013 and the total number of shares in Talvivaara
increased to 1,906,167,480 shares.
In June 2014, the Annual General Meeting of shareholders of Talvivaara resolved
on a share issue to the Company without consideration. The 190,615,000 new
shares that were issued were registered with the Finnish Trade Register on 25
July 2014. Following the registration of the treasury shares, the total number
of shares in Talvivaara is 2,096,782,480. The new shares, when held in treasury
by the Company, will not carry voting rights or any other shareholder rights in
the Company.
In December 2014, the Board of Directors of the Company dismantled the
shareholding scheme organized through Talvivaara Management Oy for members of
the Talvivaara Executive Committee and other key personnel of the Talvivaara
group. The scheme was dismantled by the Company acquiring all shares of
Talvivaara Management Oy from the participants for a nominal purchase price.
Talvivaara Management Oy was placed in liquidation on 19 December 2014. On 31
December 2014, Talvivaara Management Oy held 2,268,000 shares of the Company.
As at 31 December 2014, the only shareholders who held more than 5% of the
shares and votes of Talvivaara were Solidium Oy (15.2%) and Mr. Pekka Perä
(5.9%). Talvivaara held directly 9.1% and indirectly through Talvivaara
Management Oy (in liquidation) 0.1 % of the shares in the Company. The shares
held in treasury by the Company do not carry any voting rights.
Share based incentive plans
The Annual General Meeting of Shareholders held on 3 May 2007 approved the Board
of Directors' proposal to issue Stock Options to the Talvivaara group's key
personnel. The number of Stock Options is 6,999,300, each entitling to subscribe
one new share. A total of 2,333,100 of the Stock Options were designated
2007A, 2,333,100 were designated as 2007B and 2,333,100 were designated as
2007C. Following the rights issue completed in 2013, the subscription price and
the number of shares that can be subscribed to via Stock Options 2007 were
adjusted in accordance with the terms and conditions of the Option Scheme. The
subscription price for the Stock Option 2007C was adjusted to GBP 0.5110 per
share and the number of shares that can be subscribed for through the exercise
of Stock Option 2007C was increased by 13,998,600 shares (previously 2,333,100
shares). The subscription periods for 2007A, 2007B and 2007C Stock Options
expired on 31 March 2012, 31 March 2013 and 31 March 2014, respectively.
During 2014, no Stock Options were allocated and no shares with the Stock
Options 2007C (by their expiration on 31 March 2014) were subscribed for. There
are no further Stock Options 2007C outstanding. The vesting criteria for Stock
Options 2011A were not fulfilled and the Stock Options 2011A were cancelled at
the end of 2012. As the vesting criteria for Stock Options 2011B were not
fulfilled the options were cancelled at the end of 2013. Similarly, the vesting
criteria for Stock Options 2011C were not fulfilled and the Stock Options 2011C
were cancelled at the end of 2014.
In December 2010, The Board of Directors of the Company decided on a new
shareholding plan directed to members of executive management and certain other
key employees. The plan enabled the participants to acquire a considerable long-
term shareholding in the Company. Through this plan, the participants personally
invested a significant amount of their own funds in the Company shares. Part of
the investment was financed by a loan provided by the Company. The EUR 5.7
million loan granted by the Company to Talvivaara Management Oy for the purpose
of acquiring Company shares carries an interest of 3.0%. The 1,104,000 shares
held by Talvivaara Management Oy were pledged to the Company as security for the
loan.
Originally the plan was to be valid until the publication of Talvivaara's 2013
Financial Statements, after which event the intention was to dissolve the plan
and to repay the loan in full on 31 March 2014. However, based on the terms of
the plan, the plan was continued for one year, as the Talvivaara share price
after the publication of Talvivaara's 2013 Financial Statements was lower than
the average price which Talvivaara Management paid for its Talvivaara shares.
The repayment date of the loan was also postponed correspondingly.
On 19 December 2014, Talvivaara decided to dismantle the shareholding plan. The
scheme was dismantled by Talvivaara acquiring all shares of Talvivaara
Management Oy from the participants for a nominal purchase price.
Events after the review period
Termination of the Zinc Streaming Agreement
On 30 March 2015, the bankruptcy estate of Talvivaara Sotkamo notified Nyrstar
that, pursuant to Chapter 3, Section 8 of the Bankruptcy Act, it does not commit
to the Zinc Streaming Agreement or the Streaming Holiday Agreement.
Consequently, Nyrstar has on 9 April 2015 sent a notice to the bankruptcy estate
of Talvivaara Sotkamo, contesting the right of the bankruptcy estate to
terminate the Zinc Streaming Agreement or the Streaming Holiday Agreement by
reason of its own insolvency, and declaring that all the amounts due by
Talvivaara Sotkamo under the Loan and Streaming Holiday Agreement have become
immediately due and payable by Talvivaara Sotkamo. Nyrstar also gave the
bankruptcy estate of Talvivaara Sotkamo a 30-day-notice under the Zinc Streaming
Agreement, during which period Talvivaara Sotkamo as a seller under the Zinc
Streaming Agreement should try to remedy the seller event of default, failing
which the Zinc Streaming Agreement shall terminate. Simultaneously, Nyrstar sent
a notice to the Company, reserving their right to issue a demand to the Company
as a guarantor for a payment of all sums due by Talvivaara Sotkamo under the
Zinc Streaming Agreement and the Streaming Holiday Agreement, should the
bankruptcy estate of Talvivaara Sotkamo fail to do so.
However, based on the Intercreditor Agreement binding on the Company and
Nyrstar, the Company cannot make any payments to Nyrstar in relation to the
termination sum if full payment has not been made to the lenders having
receivables with a higher ranked priority. As the lenders having a higher ranked
priority will not receive a full payment on their receivables due to Talvivaara
Sotkamo's bankruptcy and the Company's restructuring proceedings, the Company
cannot make payments relating to the termination sum to Nyrstar, as Nyrstar's
claim for termination sum is in a subordinate position. Based on the above, the
Administrator did not include the Company's guarantee liability for the
termination sum in the restructuring debts or in the new liabilities arisen
during the proceedings in his final draft restructuring programme.
On 13 April 2015, the Facility Agent of the lenders under the Revolving Credit
Line Facility Agreement, which have receivables with the highest ranking
priority, notified Nyrstar, the Company and the bankruptcy estate of Talvivaara
Sotkamo that an Event of Default under the Revolving Credit Line Facility
Agreement has occurred and is continuing and that all payments, which would
otherwise be permitted for the Company or Talvivaara Sotkamo have thereby become
prohibited.
Status of the corporate reorganisation
On 30 January 2015, the District Court of Espoo granted an extension to the
deadline for re-submitting the proposal for the reorganisation programme of
Talvivaara until 13 March 2015.
On 12 March 2015, Talvivaara was informed that Audley Capital Advisors LLP, a
UK-based investment and capital advisory firm, has entered into a conditional
asset purchase agreement to acquire the assets of Talvivaara Sotkamo from its
bankruptcy estate. At the same time, the Republic of Finland, through its
wholly-owned special purpose company Terrafame Ltd, has entered into an
investment agreement with Audley Capital Advisors LLP. The purpose of the asset
purchase agreement and the investment agreement is to re-establish the
operations and continue the business of the Sotkamo mine within a new mining
company that will be established in connection with the transaction. Before the
transaction can close and operations at the mine can be ramped up under the
direction of the new mining company, a number of steps must still be taken
including the provision of the necessary regulatory permits and the obtaining of
committed financing. The Company announced on 12 March 2015 that the process of
selling the Sotkamo mining operations had progressed in the expected sequence,
and the milestone reached by the parties to the conditional asset purchase
agreement enables the start of serious discussions on Talvivaara's potential
role in the future of the Sotkamo mining operations.
On 13 March 2015, the Administrator of the corporate reorganisation of
Talvivaara filed the supplemented draft restructuring programme to the District
Court of Espoo. The supplemented draft restructuring programme was based on the
plan presented in the original draft restructuring programme dated 30 September
2014, whereby the business operations of the mine are to be sold to a new
company with which Talvivaara shall have a sufficient functional connection that
is based on ownership, operations or other type of economic co-operation.
The total amount of the restructuring debts to be taken into account in the
restructuring proceedings is approximately 513 million euros, out of which 508
million euros is considered unsecured debt. This amount does not include debts
with lowest priority. In addition, the Company has approximately 8 million euros
liability relating to a granted third-party security. The Administrator proposed
that the restructuring debts be cut by 99% which would leave 1% of the amount of
such debt to be repaid. The restructuring debts secured by business mortgage
will not be cut and no payments would be made on debts with lowest priority. The
draft restructuring programme does not include a provision on a duty to make
supplementary payments. The total amount of the restructuring debts includes
also approximately 31.9 million euros of conditional restructuring debt, which
consists mainly of counter indemnity given as a guarantee for the guarantee
insurance provided by Atradius Credit Insurance N.V to Kainuu ELY Centre. The
guarantee insurance relates to the certain obligations prescribed in Talvivaara
Sotkamo's environmental permit.
The term of the restructuring programme would consist of one instalment. After
the 1% restructuring debt repayment has been made to the remaining restructuring
creditors and after the other measures obligating the Company in the draft
restructuring programme have been completed, Talvivaara would not be subject to
any restriction on payment of dividends.
The Administrator's estimate is that after the completion of the above
referenced restructuring measures - and assuming that none of the restructuring
creditors would use their conversion right included in the draft restructuring
programme - the balance sheet of the Company would include approximately 25.1
million euros of financial debt, comprising of approximately 12.5 million euros
of new debts arisen during the proceedings and approximately 12.6 million euros
of cut restructuring debts and other liabilities.
The confirmation and entry into force of the draft restructuring programme
requires the fulfilment of all of the following conditions:
a. Talvivaara succeeds in negotiating an agreement with the party that
purchases Talvivaara Sotkamo mining operations from the bankruptcy estate
based on which:
1. Talvivaara can obtain sufficient cash flow to cover the costs of its
business operations if the Company's other assets or other cash flows
are not sufficient to cover said costs; and
2. Talvivaara has the right to make an investment sufficient to acquire a
significant minority stake in the company engaging in the mining
operations, or the parties complete a different financial and/or
operative arrangement that will secure the continuance of the Company's
eligible business;
b. The general meeting of shareholders of Talvivaara:
1. approves the opportunity to be offered to all holders of unsecured
restructuring debts to convert the full amount (but not a part thereof)
of their unsecured restructuring debt into shares in the Company with
due regard to any limitations of prohibitions set by foreign securities
laws that would make the offering of the conversion right to certain
foreign creditors either illegal or unreasonably difficult to implement.
If all unsecured restructuring creditors exercise said opportunity, the
percentage of holdings of the Company's current shareholders would be
diluted by 70%. The conversion rate would be EUR 0.1144 per share; and
2. executes or authorises the Company's Board of Directors to execute a
financial arrangement (e.g. issuance of shares or bonds or execution of
other financing instrument) to raise the funds needed to execute an
arrangement referred to in section a) 2. and/or for paying the remaining
restructuring debts and for covering other possible liabilities to the
extent the Company's other funds are not sufficient for such purpose;
c. The proceedings for converting the restructuring debts into shares in the
Company have been completed in accordance with the section b) 1. above, and
the new shares have been registered in the Trade Register.
A share issue or an issuance of another instrument entitling to the shares of
the Company, which are among the possible means to satisfy the condition for the
entry into force of the restructuring programme, would, if fully subscribed for
and depending on the amount to be raised in the transaction, dilute the holdings
of the existing shareholders significantly.
In addition to what has been provided on the lapse of restructuring programme
and corporate reorganization, if the special conditions set for the entry into
force of the restructuring programme have not been met by 13 March 2017, the
Administrator will make a request to the District Court to have the
restructuring proceedings interrupted. In addition, the draft restructuring
programme included a specific condition entitling the Administrator to make a
request to the District Court for the cancellation of the corporate
reorganization in case the Company does not have the funds for paying the
restructuring debts within two years of the confirmation of the programme.
Talvivaara as a debtor in the restructuring proceedings was given a similar
right as the creditors of the corporate reorganisation to give a statement on
the supplemented draft restructuring programme and propose changes to it by the
deadline of 27 March 2015 set by the District Court of Espoo. No statement on
the restructuring programme was given by Talvivaara.
On 14 April 2015, the District Court of Espoo gave a decision to initiate a
creditors' voting procedure on the draft restructuring programme of the Company
in accordance with section 76 of the Restructuring of Enterprises Act. By
initiating the voting procedure, the creditors of the Company are given the
opportunity to either support or oppose the Administrator`s draft restructuring
programme. The approval of the draft restructuring programme requires express
support from the necessary number of creditors.
Legal proceedings
Based on the pre-trial investigation relating to the discharge of raffinate from
the metals recovery plant of Talvivaara Sotkamo and dilute secondary heap
solutions into the open pit during the period of 19 December 2013 - 31 January
2014, the prosecutor decided on 11 February 2015 to bring charges against CEO
Pekka Perä. During the pre-trial investigation, the police moderated the type of
the suspected crime to an environmental infraction (petty crime), while the
prosecutor changed the type of the suspected crime back to impairment of the
environment in his application for a summons. The prosecutor requested the
District Court to handle the case together with the case concerning the gypsum
pond leakages and the discharges into water ways. The Company does not share the
prosecutor's view of the threshold for charges having been met.
On 28 April 2015, Talvivaara confirmed that a number of current and former
members of Talvivaara's Board of Directors and management have been or will be
heard in connection with an investigation relating to the Company's disclosure
practices. Talvivaara believes that the investigation will establish the
appropriateness of the Company's conduct in all respects, and emphasizes that
the Company has already in the past gone through the applied disclosure
practices extensively and in great detail with the Financial Supervisory
Authority. None of the inquiries has given rise to any administrative sanctions
available for the Financial Supervisory Authority.
Short-term outlook
The operational outlook for Talvivaara is greatly dependent on the successful
completion of the Company's corporate reorganisation proceedings and the success
to closing, timing and extent of the necessary financing solutions currently
under contemplation. Whilst the Administrator's final draft restructuring
programme gives the Company reasonably ample time fulfil the requirements set
forth for the entry into force of the restructuring programme, there is no
certainty that the Company can fulfil all the requirements within the given time
frame.
Board of Directors' proposal for the measures to be taken owing to the loss for
the financial year
The Board of Directors is proposing to the Annual General Meeting that no
dividend is declared in respect of the year 2014 and that the loss of the
financial period is entered into the Company's profit/loss account on the
balance sheet.
Talvivaara Mining Company Plc
Board of Directors
STATEMENT OF FINANCIAL POSITION
Audited Audited
As at As at
(All amounts in EUR) 31 Dec 2014 31 Dec 13
------------------------------
ASSETS
Non-current assets
Property, plant and equipment 5,010,758 8,949,490
Intangible assets 554,887 2,392,727
Investments in associates - 6,967,599
Other receivables 31,094 -
Other receivables from group companies - 262,260,463
Investments in group companies - 16,606,591
------------------------------
5,596,738 297,176,871
Current assets
Trade receivables 284,466 26,726,280
Other receivables 35,336 152,166,410
Cash and cash equivalents 5,346,381 4,697,666
------------------------------
5,666,183 183,590,356
TOTAL ASSETS 11,262,921 480,767,226
------------------------------
EQUITY AND LIABILITIES
Equity attributable to the owners
Share capital 80,000 80,000
Share premium 8,085,842 8,085,842
Other reserves 771,648,200 771,648,200
Retained deficit (1,509,757,176) (734,857,490)
------------------------------
(729,943,134) 44,956,551
------------------------------
Total equity (729,943,134) 44,956,551 ------------------------------
Provisions
Current liabilities 203,444,455 0
Borrowings 500,720,066 422,612,956
Trade payables 2,759,678 3,018,008
Other payables 34,281,855 10,179,710
------------------------------
741,206,055 435,810,675
------------------------------
Total liabilities 741,206,055 435,810,675
TOTAL EQUITY AND LIABILITIES 11,262,921 480,767,226
------------------------------
The notes are an integral part of the financial statements.
INCOME STATEMENT
Audited Audited
twelve twelve
months to months to
(All amounts in EUR) 31 Dec 2014 31 Dec 2013
----------------------------
Other operating income 12,339,864 15,309,461
Materials and services (305,207) (497,715)
Personnel expenses (5,316,937) (6,591,189)
Depreciation and amortisation (996,610) (2,246,859)
Impairment charges on property, plant and equipment (3,113,402) (14,232,843)
Impairment charges on intangible assets (1,676,000) -
Impairment charges on subsidiary investments (470,596,157) (680,527,616)
Other operating expenses (232,984,659) (9,056,364)
Operating loss (702,649,108) (697,843,126)
Finance income 37,492,941 40,891,096)
Finance cost (109,742,838) (47,981,001)
----------------------------
Finance cost (net) (72,249,897) (7,089,905)
Loss before income tax (774,899,005) (704,933,031)
Income tax (181) (4,168,624)
----------------------------
LOSS FOR THE FINANCIAL YEAR (774,899,185) (709,101,655)
----------------------------
Loss attributable to the owners of the Company, (€/share)
2014 2013
----------------
Diluted and undiluted -0.41 -0.50
The notes are an integral part of the financial statements.
STATEMENT OF CHANGES IN EQUITY
Share Share Share Other Retained
EUR capital issue premium reserves deficit Total
------------------------------------------------------------------
31 Dec 2012 80,000 - 8,085,842 520,821,335 (25,756,335 503,230,842
------------------------------------------------------------------
Rights issue - - - 250,826,864 - 250,826,864
Profit (loss)
for the year - - - - (709,101,655) (709,101,655)
------------------------------------------------------------------
31 Dec 2013 80,000 - 8,085,842 771,648,200 (734,857,990) 44,956,051
------------------------------------------------------------------
Rights issue - - - - - -
Profit (loss)
for the year - - - - (774,899,185) (774,899,185)
------------------------------------------------------------------
31 Dec 2014 80,000 - 8,085,842 771,648,200 (1,509,757,176) (729,943,134)
------------------------------------------------------------------
STATEMENT OF CASH FLOWS
(all amounts in EUR)
Audited Audited
As at As at
31 Dec 14 31 Dec 2013
----------------------------
Cash flows from operating activities
Loss for the year (774,899,185) (709,101,655)
Adjustments for
Tax 181 4,168,624
Depreciation and amortisation 996,610 2,246,859
Other non-cash income and expenses 229,395,770 -
Impairment charges on property, plant and equipment 3,113,402 14,232,843
Impairment charges on other non-current assets 472,272,157 680,527,616
Interest income (37,492,941) (40,891,096)
Interest expenses 109,742,838 47,981,001
Other adjustments - 2,650,862
----------------------------
Cash flow before change in working capital 3,128,831 1,815,054
Change in working capital
Decrease(+)/increase(-) in trade and other 344,830 (17,707,209)
receivables
Decrease(-)/increase(+) in trade and other payables 179,970 6,413,322
----------------------------
Change in working capital 524,801 (11,293,887)
Net cash used in operating activities before 3,653,632 (9,478,833)
financing activities and taxes
Interest and other finance cost paid (1,078,564) (44,043,967)
Interest and other finance income 328,170 841,009
----------------------------
Net cash generated (used) in operating activities 2,903,237 (52,681,791)
Cash flows from investing activities
Purchases of property, plant and equipment - (2,874,413)
Purchases of intangible assets (9,439) (70,694)
Purchases of other shares (279,702) (1,273,727)
Investments to subsidiaries (1,965,381) (157,404,606)
----------------------------
Net cash generated (used) in investing activities (2,254,522) (161,623,440)
Cash flows from financing activities
Proceeds from share issue - 261,417,254
Payment of interest-bearing liabilities - (76,900,000)
----------------------------
Net cash generated from financing activities - 184,517,254
Net (decrease)/increase in cash and bank overdrafts 648,715 (29,787,977)
Cash and bank overdrafts at beginning of the year 4,697,666 34,485,642
Cash and bank overdrafts at end of the year 5,346,381 4,697,666
NOTES
1. Basis of preparation
This year-end report has been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union taking
into account the corporate reorganisation proceedings that commenced in respect
of the Company on 29 November 2013, and IAS 1.25 and IAS 1.26 requirements
regarding the disclosure under the non-going concern basis.
As described elsewhere in this earnings release and in the financial statements
under Note 2, Talvivaara's financial statements for the financial year ended 31
December 2014 have been prepared on a basis other than going concern. The
financial statements for year ended 31 December 2013 have not been restated to
take into account the non-going concern assumption. For the basis of
presentation for the financial statements of 2013, please refer to the 2013
financial statements. The chosen reporting basis results from the existence of
material uncertainty that casts significant doubt upon the Company's ability to
realise its assets and discharge its liabilities in the normal course of
business and from the lack of visibility on the Company's operational
environment twelve months beyond the date of reporting. Therefore, the requisite
adjustments resulting from the chosen reporting basis have, where applicable,
been made in the financial statements to the carrying amounts of the Company's
assets and liabilities (see Note 2), but no reserve has been made in the
Company's balance sheet for the costs relating to winding down of the
operations.
Talvivaara's ability to revise its reporting basis and to regain its status as a
going concern is dependent, among other things, on the successful completion of
the Company's corporate reorganisation proceedings, which requires that (i) a
requisite number of the Company's creditors vote in favour of the
Administrator's draft restructuring programme submitted on 13 March 2015, (ii)
Talvivaara succeeds in completing an arrangement that will secure the necessary
cash flow for the Company to discharge all of its liabilities and the
continuance of the Company's eligible business, and (iii) the shareholders of
Talvivaara approve the possibility for a conversion of unsecured restructuring
debts into shares in the Company as well as the financial arrangement required
to discharge the remaining restructuring debts and for covering other possible
liabilities to the extent the Company's other funds are not sufficient for such
purpose. As of the date of the Company's financial statements 29 April 2015,
there is no certainty as to whether the Company can fulfil all the set
requirements within the given time frame.
Should the restructuring programme draft be approved as proposed by the
Administrator, following illustrative calculations on equity position can be
drawn. First calculation assumes that none of the restructuring creditors
convert their debt to equity as per the restructuring programme and latter
calculation assumes that all of the non-secured creditors convert their
restructuring debt to equity.
Illustrative calculation of the Company equity, if the
restructuring programme would be approved
(Assuming none of the restructuring creditors convert to equity)
2014
--------------
Recognised equity (729,943,134)
Debts under the restructuring programme recognised on balance
sheet (including all accrued interest) 521,993,095
--------------
Equity after full write down of recognised restructuring debts (207,950,039)
--------------
Restructuring debts remaining if programme is approved (12,586,849)
Interest on secured restructuring debts during the restructuring
proceedings (205,547)
--------------
Equity after the approval of the restructuring programme (220,742,435)
--------------
Reversal of Nyrstar provision 203,444,456
--------------
Equity excluding Nyrstar provision (17,297,980)
--------------
Illustrative calculation of the Company equity, if the
restructuring programme would be approved
(Assuming all of the non-secured restructuring creditors convert
to equity)
2014
--------------
Recognised equity (729,943,134)
Debts under the restructuring programme recognised on balance
sheet (including all accrued interest) 521,993,095
--------------
Equity after full write down of recognised restructuring debts (207,950,039)
--------------
Restructuring debts remaining if programme is approved (7,500,000)
Interest on secured restructuring debts during the restructuring
proceedings (205,547)
--------------
Equity after the approval of the restructuring programme (215,655,586)
--------------
Reversal of Nyrstar provision 203,444,456
--------------
Equity excluding Nyrstar provision (12,211,131)
--------------
This year-end report should be read in conjunction with our financial statements
for year 2014 authorized for issue on 29 April 2015. Please refer in particular
to Note 2 for more information on the reporting basis and to Notes 10 and 11 for
more information on restructuring debts.
2. Property, plant and equipment
Machinery Construction
and in
(All amounts in EUR) Buildings equipment progress Total
-----------------------------------------------
Gross carrying amount at 1 Jan
2013 11,668,778 17,229,150 2,616,393 31,514,321
Additions - 36,330 2,838,083 2,874,413
Deductions - - (2,652,095) (2,652,095)
Transfers 230,267 2,572,115 (2,802,381) -
-----------------------------------------------
Gross carrying amount at 31 Dece
2013 11,899,045 19,837,595 - 31,736,640
-----------------------------------------------
Accumulated depreciation and
impairment losses at 1 Jan 2013 2,502,813 4,046,898 - 6,549,711
Depreciation for the year 764,674 1,239,922 - 2,004,596
Impairment losses 5,253,671 8,979,171 - 14,232,843
-----------------------------------------------
Accumulated depreciation and
impairment losses at 31 Dec 2013 8,521,159 14,265,990 - 22,787,149
-----------------------------------------------
Carrying amoung at 1 Jan 2013 9,165,965 13,182,253 2,616,393 24,964,610
-----------------------------------------------
Carrying amount at 31 Dec 2013 3,377,885 5,571,605 - 8,949,490
-----------------------------------------------
Gross carrying amount at 1 Jan
2014 11,899,045 19,837,595 - 31,736,640
Additions - - -
Deductions - - -
Transfers - - -
-----------------------------------------------
Gross carrying amount at 31 Dec
2014 11,899,045 19,837,595 - 31,736,640
-----------------------------------------------
Accumulated depreciation and
impairment losses at 1 Jan 2014 8,521,159 14,265,990 - 22,787,149
Depreciation for the year 292,173 560,847 853,020
Impairment losses 3,085,712 3,085,712
-----------------------------------------------
Accumulated depreciation and
impairment losses at 31 Dec 2014 11,899,045 14,826,837 - 26,725,882
-----------------------------------------------
Carrying amoung at 1 Jan 2014 3,377,885 5,571,605 - 8,949,490
-----------------------------------------------
Carrying amount at 31 Dec 2014 - 5,010,758 - 5,010,758
-----------------------------------------------
3. Borrowings and capital loans
EUR 2014 2013
------------------------
Restructuring loans
Bonds 110,000,000 110,000,000
Convertible bonds 249,620,846 242,036,675
Revolving credit facility 70,000,000 70,000,000
Absolute guarantee 50,703,476 -
Interest during proceedings 7,465,075 -
Other borrowings during procedure 12,930,668 576,281
------------------------
500,720,066 422,612,956
------------------------
Absolute guarantee includes a floating charge security for the loans drawn from
Finnvera by Talvivaara Sotkamo, which the Company has guaranteed as its own
debt. Please refer to Board of Directors' review and Note 22.
Other borrowings include Nyrstar loan facility of EUR 12.8 million.
The Company has assessed the carrying value and fair value to be equal for all
borrowings and capital loans.
The Company's borrowings are denominated in euros.
Of the above tabled borrowings and capital loans, all except other borrowings
during the procedure are reorganisation debts that may be restructured as part
of the corporate reorganisation programme. The secured borrowings, which
comprise the Revolving Credit Facility and the Investment and Working Capital
Loan, may only be reduced if and to the extent the security pledged to them does
not cover their nominal amount.
4. Contingencies and commitments
Counter indemnity given as a guarantee for the guarantee insurance provided by
Atradius Credit Insurance N.V to Kainuu ELY Centre
EUR 2014 2013
---------------------------------------------
Counter indemnity given as a
guarantee 31,940,000 31,940,000
31,940,000 31,940,000
---------------------------------------------
The future aggregate minimum lease
payments under non-cancellable
operating leases
EUR 2014 2013
---------------------------------------------
No later than 1 year 97,637 156,941
Later than 1 year and not later
than 5 years 4,672 47,608
102,309 204,549
---------------------------------------------
5. Deferred tax assets
As the Company's 2014 financial statements have been prepared on a basis other
than going concern, the Company has not recorded any deferred tax assets or
liabilities on its balance sheet. Detailed information is disclosed in notes 20
to the audited financial statements for year 2014.
Talvivaara Mining Company Plc
Key financial figures
Twelve Twelve
months to months to
31 Dec 14 31 Dec 13
------------------------
Other operating income EUR '000 12,340 15,309
Operating loss EUR '000 (702,649) (697,843)
Operating loss percentage (5,694.1) % (4,558.2) %
Loss before tax EUR '000 (774,899) (704,933)
Loss for the period EUR '000 (774,899) (709,102)
Return on equity N/A (1,687.9) %
Equity-to-assets ratio (6480.9) % 9.4 %
Net interest-bearing debt EUR '000 495,374 417,915
Debt-to-equity ratio (67.9) % 929.6 %
Return on investment (558.1) % (132.4) %
Capital expenditure EUR '000
Property, plant and equipment EUR '000 5,011 8,949
Borrowings EUR '000 500,720 422,613
Cash and cash equivalents EUR '000 5,346 4,698
Share-related key figures
Twelve Twelve
months to months to
31 Dec 14 31 Dec 13
----------------------------
Earnings per share EUR (0.41) (0.50)
Equity per share EUR (0.38) 0.03
Development of share price at LondonStock Exchange
Average trading price(1) EUR 0.08 0.12
GBP 0.07 0.10
Lowest trading price(1) EUR 0.04 0.30
GBP 0.03 0.30
Highest trading price(1) EUR 0.12 1.34
GBP 0.10 1.14
Trading price at the end of the EUR 0.06 0.08
period(2)
GBP 0.05 0.07
Change during the period (28.5) % 93.2 %
Price-earnings ratio neg. neg.
Market capitalization at the end of the EUR '000 124,840 159,759
period(3)
GBP '000 100,646 133,622
Development in trading volume
Trading volume 1000 shares 430,639 776,597
In relation to weighted average number 20.5 % 54.2 %
of shares
Development of share price at OMX
Helsinki
Average trading price EUR 0.07 0.11
Lowest trading price EUR 0.03 0.03
Highest trading price EUR 0.12 1.39
Trading price at the end of the period EUR 0.03 0.08
Change during the period (62.2) % (93.9) %
Price-earnings ratio neg. neg.
Market capitalization at the end of the EUR '000 63,533 145,059
period
Development in trading volume
Trading volume 1000 shares 2,039,404 3,086,423
In relation to weighted 97.3 % 215.6 %
Average number of shares 1,906,068,061 1 431,677,258
Fully diluted average number of shares 2,004,685,996 1 530,295,193
Number of shares at the end of the 2,096,782,480 1 906,167,480
period
(1)) Trading price is calculated on the average of EUR/GBP exchange rates
published by the European Central Bank during the period.
(2)) Trading price is calculated on the EUR/GBP exchange rate published by the
European Central Bank at the end of the period
(3)) Market capitalization is calculated on the EUR/GBP exchange rate published
by the European Central Bank at the end of the period.
Employee-related key figures
Twelve Twelve
months to months to
31 Dec 14 31 Dec 13
--------------------
Wages and salaries EUR '000 4,436 5,515
Average number of employees 56 66
Number of employees at the end of the period 53 61
Talvivaara Mining Company Plc
Key financial figures of the Company
Return on equity Loss for the period
------------------------------------------------------
(Total equity at the beginning of period + Total
equity at the end of period)/2
Equity-to-assets ratio Total equity
------------------------------------------------------
Total assets
Net interest-bearing debt Interest-bearing debt - Cash and cash equivalent
Debt-to-equity ratio Net interest-bearing debt
------------------------------------------------------
Total equity
Return on investment Loss for the period + Finance cost ------------------------------------------------------
(Total equity at the beginning of period + Total
equity at the end of period)/2 + (Borrowings at the
beginning of period + Borrowings at the end of
period)/2
Share-related key figures
Earnings per share Loss attributable to equity holders of the Company
------------------------------------------------------
Adjusted average number of shares
Equity per share Equity attributable to equity holders of the Company
------------------------------------------------------
Adjusted average number of shares
[HUG#1917492]
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