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2012-03-30 16:15:00 CEST 2012-03-30 16:15:02 CEST REGULATED INFORMATION Cencorp - Company AnnouncementSummary of Cencorp's financing negotiationsCencorp Corporation Stock Exchange Release 30 March 2012 at 17:15 Finnish time SUMMARY OF CENCORP'S FINANCING NEGOTIATIONS Cencorp's auditor has in the draft Auditor's Report, issued on 29 March 2012, provided a so-called Emphasis of Matter, concerning the company's financing position. The draft Auditor's Report is of a standard format. Cencorp will publish the final Auditor's Report immediately upon its completion. The company currently believes that the draft Auditor's Report, issued on 29 March 2012, will not be changed. In the Emphasis of Matter, the auditor states the following: “Emphasis of Matter Without qualifying our opinion, we draw attention to the basis of preparation of the financial statements and to Note 28: Financial risk management. The financial statements have been prepared under the going concern assumption. The continuity of operations requires the company to be able to obtain supplementary funding and to negotiate changes to the terms of payment during 2012. The company has initiated discussions with its major financiers and shareholders on measures to strengthen the financing position until the company's cash flow is expected to return to positive. The company believes that these measures will secure the sufficiency of working capital for the next twelve (12) months. However, should the company fail to arrange financing, it is possible that the company will not be able to realize its assets and repay its liabilities within usual business operations to a sufficient extent or quickly enough. This would jeopardize the company's operations in their current form.” In Cencorp's view, the company's financing position will remain challenging, but the situation has improved since the end of 2011 and the publication of the financial statement release on 17 February 2012 as a result of the following measures, through which Cencorp believes that the company has secured sufficient working capital for the next twelve (12) months. The Extraordinary General Meeting authorized in its meeting on 30 January 2012 the Board of Directors to decide on share issues, share options and other share-entitling rights referred to in Chapter 10, Section 1 of the Limited Liability Companies Act. The Board justified the granting of the authorization with potential need for additional financing, for example for investments and working capital, with the use of equity derivatives and instruments for corporate transactions and incentive systems. This authorization gives the Board of Directors the possibility to act quickly if required, for example, to finance investments and to increase working capital through equity arrangements. The company has initiated discussions with its major financiers and shareholders on measures to strengthen the financing position until the company's cash flow is expected to return to positive. Cencorp announced on 28 March 2012 that its Chinese subsidiary Savcor Face (Beijing) Technologies Co., Ltd carried out a sale-leaseback of its plant building in Beijing with a real-estate investor in the amount of RMB 38.5 million, i.e. around EUR 4.7 million. The company will recognize a gain of approximately EUR 1.1 million on the real estate transaction. Cencorp used the consideration received for the property to repay the Bank of China a loan of RMB 32 million, i.e. some EUR 3.9 million. Cencorp announced on 31 December 2011 that the maturity of a loan of approximately EUR 1.2 million from Savcor Group Oy, the company's main owner, will be extended to 30 June 2012. At the same time Cencorp announced that it had been notified by the Australian company Savcor Group Ltd that the due date for the unpaid share of around EUR 560,000 of the purchase price for the Face (Telecom) corporate transaction will be extended to the end of March 2012. Cencorp has been notified on this date that the due date will be extended to 30 April 2013. On 31 January 2012 Cencorp announced that the company has agreed with AC Finance BV, a subsidiary of Ahlström Capital Oy, on transferring the maturity of a loan of one million euro from the end of January to 30 June 2012. At the same time the company announced that, due to the brighter market outlook particularly in the North American markets, Cencorp had decided to end the temporary lay-offs that started in September of 2011 and affected all of the company's employees in Finland. Cencorp expected the Group's order book to develop favorably over the next few months. The company was also seeking to increase its investments in product development, especially in the area of renewable energy technologies. Summary of the company's financial position The company has either paid off or agreed on the transfer of all major loan installments to the end of June 2012 at minimum. Cencorp's main financiers are long-term investors or shareholders in the company. The company has no reason to expect the further transfer of loan maturities to cause such problems which could jeopardize the company's current operations. The company has been authorized by the Annual General Meeting to issue at most 100,000,000 new shares. The Board thus has the authorization to act quickly to improve the company's financing position and to finance investments. Mikkeli, 30 March 2012 CENCORP CORPORATION BOARD OF DIRECTORS For more information: CEO Mats Eriksson, tel. +358 400 358 982, mats.eriksson@cencorp.com Distribution: NASDAQ OMX, Helsinki Main media www.cencorp.com Cencorp Corporation is a leading provider of industrial automation solutions. The equipment included in the product portfolio designed for depaneling, odd-form assembly, testing and laser materials processing substantially improves the efficiency of customers' production. The product range also includes EMI shielding solutions, flexible circuits, decorations and RFID antennas. Cencorp's customers are automotive electronics manufacturers and manufacturers operating in telecommunications, industrial automation and EMS. Cencorp's head office is located in Mikkeli, Finland. The company is part of the Finnish Savcor Group. |
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