2015-05-07 09:30:38 CEST
2015-05-07 09:31:38 CEST
REGULATED INFORMATION
Leverator - Interim report (Q1 and Q3)
LEVERATOR PLC INTERIM REPORT 1 JANUARY – 31 MARCH 2015
Leverator Plc Interim Report 7 May 2015 at 10.30 a.m. EET
LEVERATOR PLC INTERIM REPORT 1 JANUARY - 31 MARCH 2015
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 31 March 2015.
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, %
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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 review 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 15,022 (EUR 17,306 for the
review period 1 January - 31 March 2014) and financial income and expenses
totalled EUR 43,946 (EUR 60,196). The result for the review period was EUR
23,139 (EUR 34,312).
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 31 March 2015
MEUR
Outstanding balance to Leverator 70.3
CMM IV's mezzanine loans and associated options and shares:
- acquisition cost* 39.8
- value appreciation* -0,7
Net cash assets
- bank deposits 1.5
- 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 60,4
* 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 €9.9 million below the total loan receivables of
Leverator on 31 March 2015 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 €7.0 million on 31 March 2014 and
were below the total loan receivables by €6.6 million on 31 December 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 on 21 June 2016. Due to
the requirement from the senior lenders, CMM IV has been required to partly
convert its loans to portfolio companies into preferred shares and extend the
loan terms of the remaining loans to portfolio companies beyond the maturity of
the bond. CMM IV has requested Leverator's Board of Directors to initiate
negotiations about the extension of the maturity of the loan to Leverator and
the bond with an aim to postpone the final loan payments by two years i.e. no
later than 21 June 2018. The extension requires approval from all bond holders.
Negotiations in the beginning of the year regarding the extension of the bond
did not result in universal approval. Due to the aforementioned reasons, it is
necessary to extend the maturity in order to repay the bond in full.
Negotiations will therefore continue after the summer when further updates on
the portfolio companies are available.
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 31 March 2015
MEUR
Balance of bonds at nominal value 70.3
Leverator's receivable from CMM IV at nominal value 70.3
Net cash assets 1.1
CMM IV's solvency deficit -9,9
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Total 61,5
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 7 May 2015 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 Jari Pussinen, and Mr Kyösti Ylikortes. The members elected Mr
Tatu Hemmo as Chairman of the Board.
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 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 2015.
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 on 21 June 2016. Due to
the requirement from the senior lenders, CMM IV has been required to partly
convert its loans to portfolio companies into preferred shares and extend the
loan terms of the remaining loans to portfolio companies beyond the maturity of
the bond. CMM IV has requested Leverator's Board of Directors to initiate
negotiations about the extension of the maturity of the loan to Leverator and
the bond with an aim to postpone the final loan payments by two years i.e. no
later than 21 June 2018. The extension requires approval from all bond holders.
Negotiations in the beginning of the year regarding the extension of the bond
did not result in universal approval. Due to the aforementioned reasons, it is
necessary to extend the maturity in order to repay the bond in full.
Negotiations will therefore continue after the summer when further updates on
the portfolio companies are available.
It is probable that Leverator Plc's interest earnings will cover its interest
payable and other expenses in 2015.
Leverator Plc will publish its Interim Report 1 January-30 June 2015 on 6
August 2015
Helsinki 7 May 2015
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-31 March 2015 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 2014. The
information presented is unaudited.
APPENDIX 1. Income Statement, Balance Sheet, Statement of Changes in Equity and
Cash Flow Statement
LEVERATOR PLC
INCOME STATEMENT, IFRS
EUR 1.1.- 31.3.2015 1.1.- 31.3.2014 1.1.-31.12.2014
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Turnover 0 0 0
Personnel expenses 0 0 -26,400
Other operating expenses -15,022 -17,306 -56,679
Operating loss -15,022 -17,306 -83,079
Financial income and expenses 43,946 60,196 206,740
Profit before taxes 28,924 42,890 123,661
Income taxes -5,785 -8,578 -25,350
Profit for the review period 23,139 34,312 98,311
Total comprehensive income,
IFRS
The company does not have
items
included in comprehensive
income.
Earnings per share:
Earnings per share, € 0.0225 0.0334 0.0956
LEVERATOR PLC
BALANCE SHEET, IFRS
EUR 31/03/2015 31/03/2014 31/12/2014
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ASSETS
Non-current assets
Investments
Other investments 70,313,856 96,314,112 70,313,856
Total non-current assets 70,313,856 96,314,112 70,313,856
Current assets
Current receivables 1,666,388 2,270,657 186,890
Cash and bank 976,822 869,004 998,426
Total current assets 2,643,210 3,139,661 1,185,316
TOTAL ASSETS 72,957,066 99,453,773 71,499,173
EUR 31/03/2015 31/03/2014 31/12/2014
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SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity
Share capital 102,857 102,857 102,857
Retained earnings 938,984 840,673 840,673
Profit for the review period year 23,139 34,312 98,311
Total shareholders' equity 1,064,980 977,843 1,041,841
Liabilities
Non-current liabilities 70,313,856 96,314,112 70,313,856
Current liabilities 1,578,230 2,161,818 143,475
Total liabilities 71,892,086 98,475,930 70,457,331
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 72,957,066 99,453,773 71,499,173
LEVERATOR PLC
STATEMENT OF CHANGES IN EQUITY, IFRS
Share Other Retained Total
capital reserves earnings equity
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Equity on 31.12.2014 102,857 0 938,984 1,041,841
Profit for the review 23,139 23,139
period
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Equity on 31.3.2015 102,857 0 962,123 1,064,980
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Share Other Retained Total
capital reserves earnings equity
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Equity on 31.12.2013 102,857 0 840,673 943,530
Profit for the review 98,311 98,311
period
Equity on 31.12.2014 102,857 0 938,984 1,041,841
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LEVERATOR PLC
CASH FLOW STATEMENT, IFRS
EUR 1-3/2015 1-3/2014 1-12/2014
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Cash flow from operations
Operating profit 23,139 34,312 98,311
Other adjustments to operating profit -44,743 -76,609 -219,551
Interest paid 0 0 -6,800,087
Interest received 0 0 7,008,453
Cash flow from operations -21,604 -42,297 87,126
Cash flow from investments
Change in long-term loan receivables 0 0 26,000,256
Cash flow from investments 0 0 26,000,256
Financial cash flow
Change in long-term liabilities 0 0 -26,000,256
Financial cash flow 0 0 -26,000,256
Change in cash funds -21,604 -42,297 87,126
Cash funds at start of the period 998,426 911,301 911,301
Cash funds at end of the period 976,822 869,004 998,426
Olli Liitola, CEO, tel. +358 207 207 506 or mobile +358 400 605 040
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