Tecnotree Oyj - Company Announcement

Tecnotree Corporation has decided to apply for restructuring proceedings

Tecnotree Corporation
Stock Exchange Release
5 March 2015 at 9.50 am EET

Tecnotree Corporation's business operations have been loss-making for several
years. In the unaudited financial review release for 1 January 2014 - 31
December 2014, published on 30 January 2015, the Company announced that the
result of the whole year 2014 remained a loss despite the encouraging final
part of the year. The Company's situation is still challenging, even though the
Company estimates that its operating result of 2015 will improve from 2014. 

The Company's fourth quarter net sales and adjusted operating result set new
records. During the same period the Company's customer deliveries included a
large number of third-party products (computers and licenses) leading to an
increase in the trade payables. Significant part of the Company's customers
operate in countries where central banks restrict the availability of currency,
for which reason the payments to the Company are delayed. The Company's
customers in these areas are leading operators, who have always made their
payments. 

In the financial review release the Company told that also its cash situation
remained tight during the review period.  The change in cash and cash
equivalents during 2014 was EUR -4.2 million. The Company had no unused credit
facilities at the end of the year. The Company has previously informed the
markets that it has restructured its financing, renegotiated the repayment
schedules and covenants of its loans as well as implemented certain cost
reduction measures.  The Company has been looking into obtaining additional
financing, primarily equity financing, to strengthen its financial position and
to reduce equity risks. 

In addition, in the financial review release Tecnotree announced that at the
end of the year the Group's shareholders' equity of stood at EUR 16.9 million.
However, the shareholders' equity of the parent company was only EUR 2.2
million while its share capital stood at EUR 4.7 million. This means that the
shareholders' equity of the parent company has fallen below half of the share
capital. According to section 23 of chapter 20 of the Limited Liability
Companies Act, if a public company's shareholders' equity according to the
balance sheet is less than half of its share capital, the Board of Directors
shall without delay convene a General Meeting to consider measures to remedy
the financial position of the company. On 26 February 2015 the Company notified
that it will postpone the publication of its official financial statements for
2014 and possibly also the date of the Annual General Meeting as the
presentation of these measures in the financial statements will need to be
ensured before publishing the official financial statements. 

The Company has actively searched for a solution to improve its financial
standing and carefully studied different options for solving the situation.
Based on the study the Company concludes that it would in the best interest of
the Company and its stakeholders, if the Company applied for restructuring
proceedings in accordance with the Act on Restructuring of Enterprises. The
Company assess that its difficulties are temporary, and via restructuring it
would be possible to remedy the Company's financing and equity structure and
thus secure the long-term continuation of the Company's business operations.
Restructuring, if materialized, would ease the debt liability of the Company
and consequently also the shareholders' equity. The main creditor of the
Company, Nordea Bank Finland Plc, together with another creditor, have
announced being in support of placing the Company in the restructuring
proceedings. 

Based on the above, the Board of Directors of Tecnotree has decided to file an
application for restructuring proceedings with the district court of Espoo. The
application will be filed today. According to section 24 of chapter 20 of the
Limited Liability Companies Act, the application has been filed by the Board of
Directors, as the matter is urgent. According to the same paragraph, the Board
of Directors shall without delay convene the General Meeting to decide on the
continuation of the application. 

The Board of Directors proposes to the Extraordinary General Meeting of
Shareholders to be held on Friday 27 March that the application for
restructuring proceedings will be continued. 

Measures to be taken based on the result shown by balance sheet and possible
other measures to be taken to remedy the Company's financial situation in
accordance with section 23 of chapter 20 of the Limited Liability Companies Act
will be handled in the Annual General Meeting of the Shareholders to be
convened later. In addition to the filing of the restructuring application and
the measure proposals to the general meetings of shareholders, the Company
continues to look into obtaining additional equity-type financing. 

The filing of the restructuring application has no direct effects on
Tecnotree's business operations and the Company continues to carry out the
agreed customer projects and serve its customers as usual. 

TECNOTREE CORPORATION

The Board of Directors

MORE INFORMATION
Ilkka Raiskinen, CEO, tel. +358 (0)45 311 3113
Ilkka.raiskinen@tecnotree.com

DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Main Media
www.tecnotree.com


About Tecnotree
Tecnotree is a global provider of telecom IT solutions for the management of
products, customers and revenue. Tecnotree helps communications service
providers to transform their business towards a marketplace of digital
services. Tecnotree empowers service providers to monetise on service bundles,
provide personalised user experiences and augment value throughout the customer
lifecycle. With over 1000 telecom experts, Tecnotree serves more than 100
service providers in over 70 countries. Tecnotree is listed on the main list of
NASDAQ OMX Helsinki with the trading code TEM1V. For more information on
Tecnotree, please visit www.tecnotree.com