2014-11-06 10:46:46 CET
2014-11-06 10:47:47 CET
REGULATED INFORMATION
Leverator - Interim report (Q1 and Q3)
LEVERATOR PLC INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2014
Leverator Plc Interim Report 6 November 2014 at 11.45 p.m. EET
LEVERATOR PLC INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2014
Business
Leverator Plc's (Leverator) business consists of the issue of bonds and the
grant of loans to CapMan Mezzanine IV L.P. mezzanine fund (CMM IV). Leverator's
result is formed by the difference between interest received from CMM IV's
loans and interest paid to bondholders. The issued bonds are listed on the
Helsinki Exchanges (Nasdaq OMX Helsinki).
Bonds
Leverator has issued a serial loan with a fixed coupon interest of 8.162%. The
bonds were issued in five tranches in accordance with the loan capital needed
by CMM IV, and investors subscribed all five tranches according to their
commitments. The final size of the bond totalled MEUR 192 on 18 June 2009. The
final loan maturity is 21 June 2016. Leverator has a call option to repay the
bonds or part thereof not earlier than 22 June 2009.
Leverator repaid 13.5%, equivalent of EUR 26,000,256, in accordance with the
terms of the loan on 23 June 2014. The outstanding bond loan totalled EUR
70,313,856 on 30 September 2014.
Issued tranches and Leverator's financial performance
Issued tranches (trading code LEVJ816216)
Tranche Issue date Size of the tranche, Date of Subscription
MEUR listing price, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1st 12 July 2004 8.0 13 July 2004 100.00
tranche
2nd 5 June 2006 40.0 13 June 2006 99.137
tranche
3rd 28 March 48.0 13 April 98.290
tranche 2007 2007
4th 28 April 36.0 5 May 2009 97.389
tranche 2009
5th 18 June 2009 60.0 25 June 2009 98.468
tranche
Leverator's turnover for the accounting period was EUR 0, because the Company's
interest earnings and interest expenses are presented as financial items in the
income statement. Leverator's operating loss was EUR 43,298 (EUR 47,639 for the
review period 1 January - 30 September 2013) and financial income and expenses
totalled EUR 162,714 (EUR 210,829). The result for the accounting period was
EUR 95,532 (EUR 123,209).
Leverator's solvency and risks
The security for the bonds is Leverator's receivable from CMM IV. The security
for this receivable to Leverator is CMM IV's mezzanine loan receivables from
portfolio companies as well as associated options and portfolio company shares
that are possibly subscribed on the basis of those options.
Leverator's solvency to pay the bonds' interest and principal is based on CMM
IV's solvency to pay the loan receivable and interest to Leverator. CMM IV's
solvency is dependent on its mezzanine loan receivables from portfolio
companies and on the value of associated options or shares as well as on CMM
IV's right to call the commitments and clawback of the Fund's Limited Partners.
The most significant risks or uncertainty factors in Leverator's operations are
that the portfolio companies would not be able to pay their debt to the fund,
that the fund's Limited Partners would not fulfil their obligations in
accordance with fund agreement or that the fund's solvency would be put at risk
due to some other cause.
An examination of CMM IV's solvency to manage the loan receivable to Leverator
is first carried out in order to determine Leverator's solvency.
CMM IV's solvency 30 September 2014
MEUR
Outstanding balance to Leverator 70.3
CMM IV's mezzanine loans and associated options and shares:
- acquisition cost* 39.8
- value appreciation* 1.0
Net cash assets
- bank deposits 3.5
- accumulated interest receivables** 0.5
- Leverator/accumulated interest -1.6
Commitments at call from Limited Partners 10.0
Clawback at call 10.9
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-----
Total 64.1
* Figures by CMM IV's management company, as reported or with a discount.
** Excludes interest receivables that are outstanding or have accumulated that
are not booked in the Fund's accounts because of the uncertainty whether they
can be collected.
CMM IV's financial assets were €6.2 million below the total loan receivables of
Leverator on 30 September 2014 and therefore the latter's receivable due from
CMM IV presented below cannot be booked in full. CMM IV's financial assets
exceeded the total loan receivables of Leverator by €8.7 million on 30
September 2013 and by €6.1 million on 30 June 2014.
According to the management company the targeted exit valuations of CMM IV
fund's mezzanine loans and associated options and shares are higher than their
current valuation, and therefore the fund should be able to pay the loans back
to Leverator Plc. However, in the current market conditions it is likely that
reaching the targeted exit valuations requires extension of the loan terms and
the holding period, which in turn means that the final loan payment will be
postponed further than the loan's estimated maturity 21 June 2016. CMM IV has
requested Leverator's Board of Directors to initiate negotiations about the
extension of the maturity of the bond. The extension requires approval from all
bond holders.
The values given above are reported by CMM IV's management company. The
management company's assessment of the value appreciation of mezzanine loans
and associated options and shares is based on reporting principles common to
the private equity industry. These principles aim at take into account risk
factors caused by the general economic environment. The amount of commitments
and clawback that the fund has a right to call from the Fund's Limited Partners
is based on CMM IV's fund agreement.
Leverator's solvency 30 September 2014
MEUR
Balance of bonds at nominal value 70.3
Leverator's receivable from CMM IV at nominal value 70.3
Net cash assets 1.0
CMM IV's solvency deficit -6.2
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-----
Total 65.1
At current value Leverator's solvency is below the balance of the bonds'.
Leverator's more detailed financial position is presented in the income
statement, balance sheet, statement of changes in equity and cash flow
statement in Appendix 1. There are no exceptional liabilities of Leverator or
CMM IV in the knowledge of Leverator's Board of Directors that should be
considered in the above calculations.
Leverator's ownership
The owners of Leverator Plc are CapMan Plc, Etera Mutual Pension Insurance
Company, Foundation for Economic Education, Ilmarinen Mutual Pension Insurance
Company, OP Life Assurance Company Ltd, Pharmacy Pension Fund, Mandatum Life
Insurance Company Limited, Varma Mutual Pension Insurance Company and
Yleisradio Pension Fund with equal holdings.
Leverator's Board of Directors
On 8 May 2014 the shareholders of Leverator Plc elected the following members
to the Company's Board of Directors: Mr Tatu Hemmo, Mrs Nina Härkönen, Mr
Staffan Jåfs, Mr Harri Lemmetti, Mr Olli Liitola, Mr Tommi Mäkelä, Mrs Katja
Salovaara, Mr Tomi Viia, and Mr Kyösti Ylikortes. The members elected Mr Tatu
Hemmo as Chairman of the Board.
Revised future outlook
Developments in the general market environment in the next few years may
continue to cause difficulties in the ability of fund's portfolio companies to
pay interest on their mezzanine loans and repay principal to the fund in
accordance with original loan terms. Restrictions in the portfolio companies'
senior loan agreements may in certain cases prevent the companies from meeting
their interest payments in accordance with the original loan terms during 2014
and 2015. The aforementioned issues might, in turn, weaken the fund's ability
to meet its debt to Leverator Plc in full, which would affect Leverator Plc's
solvency. It is possible that the fund's solvency weakens further during 2014
and 2015.
Addition to the outlook: According to the management company the targeted exit
valuations of CMM IV fund's mezzanine loans and associated options and shares
are higher than their current valuation, and therefore the fund should be able
to pay the loans back to Leverator Plc. However, in the current market
conditions it is likely that reaching the targeted exit valuations requires
extension of the loan terms and the holding period, which in turn means that
the final loan payment will be postponed further than the loan's estimated
maturity 21 June 2016. CMM IV has requested Leverator's Board of Directors to
initiate negotiations about the extension of the maturity of the bond. The
extension requires approval from all bond holders.
It is probable that Leverator Plc's interest earnings will cover its interest
payable and other expenses in 2014.
Leverator Plc will publish its Financial Statements Bulletin 1 January-31
December 2014 on 5 February 2015
Helsinki 6 November 2014
LEVERATOR PLC
Board of Directors
For further information, please contact:
Olli Liitola, CEO, tel. +358 207 207 506 or mobile +358 400 605 040
DISTRIBUTION
NASDAQ OMX Helsinki
Principal media
Bondholders
www.leverator.fi
APPENDIX 1. Income statement, balance sheet, statement of
changes in equity and cash flow statement
The Interim Report 1 January-30 September 2014 has been prepared in compliance
with International Financial Reporting Standards (IFRS) and the accounting
principles applied are the same as in the financial statements for 2013. The
information presented is unaudited.
APPENDIX 1. Income Statement, Balance Sheet, Statement of Changes in Equity and
Cash Flow Statement
LEVERA
TOR
PLC
INCOME
STATE
MENT,
IFRS
EUR 1.7.- 30.9.2014 1.1.-30.9.2014 1.7.- 30.9.2013 1.1.-30.9.2013
1.1.-31.12.2013
--------------------------------------------------------------------------------
---------
Turnov 0 0 0 0
0
er
Person 0 0 0 0
-24,000
nel
expen
ses
Other -15,133 -43,298 -19,110 -47,639
-69,632
opera
ting
expen
ses
Operat -15,133 -43,298 -19,110 -47,639
-93,632
ing
loss
Financ 43,946 162,714 70,276 210,829
280,196
ial
incom
e and
expen
ses
Profit 28,813 119,415 51,166 163,190
186,564
befor
e
taxes
Income -5,763 -23,883 -12,536 -39,982
-45,708
taxes
Profit 23,050 95,532 38,630 123,209
140,856
for
the
finan
cial
year
Total comprehensive
income, IFRS
The company does not
have items
included in
comprehensive income.
Earnin
gs per
share
:
Earnin 0,0224 0,0929 0,0376 0,1198
0,1369
gs per
share
, €
LEVERATOR PLC
BALANCE SHEET,
IFRS
EUR 30.9.2014 30.9.2013 31.12.2013
ASSETS
Non-current
assets
Investments 70,313,856 112,442,112 96,314,112
Other
investments
70,313,856 112,442,112 96,314,112
Total
non-current
assets
Current assets
1,673,296 2,653,556 230,712
Current 943,996 798,288 911,301
receivables
Cash and bank
2,617,292 3,451,844 1,142,012
Total current
assets
72,931,148 115,893,956 97,456,124
TOTAL ASSETS
EUR 30.9.2014 30.9.2013 31.12.2013
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders'
equity
Share capital 102,857 102,857 102,857
Retained 840,673 699,817 699,817
earnings
Profit for the 95,532 123,209 140,856
financial
year
Total 1,039,062 925,883 943,530
shareholders'
equity
Liabilities
Non-current 70,313,856 112,442,112 96,314,112
liabilities
Current 1,578,229 2,525,961 198,482
liabilities
Total 71,892,085 114,968,073 96,512,594
liabilities
TOTAL 72,931,148 115,893,956 97,456,124
SHAREHOLDERS'
EQUITY
AND
LIABILITIES
LEVERATOR PLC
STATEMENT OF CHANGES IN EQUITY, IFRS
Share capital Other Retained earnings Total equity
reserves
--------------------------------------------------------------------------------
Equity on 102,857 0 840,673 943,530
31.12.2013
Profit for 95,532 95,532
the
financial
year
------------------------------------------------------------------
Equity on 102,857 0 936,205 1,039,062
30.6.2014
--------------------------------------------------------------------------------
Share capital Other Retained earnings Total equity
reserves
--------------------------------------------------------------------------------
Equity on 102,857 0 699,817 802,674
31.12.2012
Profit for 123,209 123,209
the
financial
year
Equity on 102,857 0 823,026 925,883
30.6.2013
--------------------------------------------------------------------------------
LEVERATOR PLC
CASH FLOW STATEMENT, IFRS
EUR 1-9/2014 1-9/2013 1-12/2013
---------------------------------------------------------------------------
Cash flow from operations
Operating profit 95,532 123,209 140,856
Other adjustments to operating profit -183,230 -214,456 -259,641
Interest paid -3,930,579 -4,588,763 -9,177,525
Interest received 4,050,972 4,729,315 9,458,630
Cash flow from operations 32,695 49,305 162,319
Cash flow from investments
Change in long-term loan receivables 26,000,256 0 16,128,000
Cash flow from investments 26,000,256 0 16,128,000
Financial cash flow
Change in long-term liabilities -26,000,256 0 -16,128,000
Financial cash flow -26,000,256 0 -16,128,000
Change in cash funds 32,695 49,306 162,319
Cash funds at start of the period 911,301 748,982 748,982
Cash funds at end of the period 943,996 798,288 911,301
Olli Liitola, CEO, Leverator Plc
Phone: +358 207 207 506
Email: olli.liitola@capman.com
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