2016-11-03 12:33:57 CET
2016-11-03 12:33:57 CET
REGULATED INFORMATION
Leverator - Interim report (Q1 and Q3)
LEVERATOR PLC INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2016
Leverator Plc Interim Report 3 November 2016 at 1:30 p.m. EET
LEVERATOR PLC INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2016
Business
Leverator Plc’s (“Leverator” or the “Issuer”) business consists of the issue of
bonds and the grant of loans to CapMan Mezzanine IV L.P. mezzanine fund (“CMM
IV” or the “Fund”). 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 Helsinki).
Bonds
Leverator has issued a serial loan with a fixed coupon interest of 8.162% (the
“Bonds”). 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 Bonds totalled MEUR 192 on 18 June
2009. The maturity of the Bonds was extended by two years and they mature on 21
June 2018. Leverator has a call option to repay the Bonds or part thereof not
earlier than 22 June 2009.
The Bonds’ outstanding principal totalled EUR 33,291,264 on 30 September 2016.
Leverator repaid EUR 37,022,592 of the principal during the review period.
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 review period was EUR 0, because the Issuer’s
interest earnings and interest expenses are presented as financial items in the
income statement. Leverator’s operating loss was EUR 128,136 (EUR 38,525 for 1
Jan – 30 September 2015) and financial income and expenses totalled EUR 95,591
(EUR 131,838). The result for the review period was EUR -32,544 (EUR 74,650).
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 2016
MEUR
Outstanding balance to Leverator 33.3
CMM IV’s mezzanine loans and associated options and shares:
- acquisition cost* 19.8
- value appreciation* -12.2
Net cash assets
- bank deposits 2.0
- Leverator/accumulated interest -0.8
Commitments at call from Limited Partners 0.0
Clawback at call 6.0
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------
Total 14.8
* Figures by CMM IV's management company, as reported or with a discount.
CMM IV's financial assets were MEUR 18.5 below the total loan receivables of
Leverator on 30 September 2016 and therefore the latter's receivable due from
CMM IV presented below cannot be booked in full. CMM IV’s financial assets were
MEUR 17.4 below the total loan receivables of Leverator on 30 June 2016 and
MEUR 10.8 below on 30 September 2015.
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
original loan terms. Developments in the general market environment in the next
few years may continue to cause difficulties for Fund portfolio companies to
pay interest on their mezzanine loans and repay principal to the Fund in
accordance with the revised loan terms. Restrictions in the portfolio
companies’ senior loan agreements may in certain cases prevent the companies
from meeting their interest payments during 2016 despite revisions of the
original loan terms. The aforementioned issues might, in turn, weaken the
Fund’s ability to meet its debt to Leverator Plc in full, which would affect
Leverator’s solvency. It is possible that CMM IV’s solvency weakens further
during 2016 and 2017.
According to the management company the targeted exit valuations of CMM IV’s
mezzanine loans and associated options and shares are higher than their current
valuation, and therefore the Fund may potentially be able to pay back the loan
to Leverator. Given the two-year extension to the Bond’s maturity and the
maturity of Leverator’s loans to CMM IV, it is possible that the value of the
Fund’s portfolio by the time of the Bond’s maturity in June 2018, in addition
to commitments at call from Limited Partners, would be sufficient for the Fund
to meet its obligations to Leverator in full. This outlook is highly uncertain.
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 2016
MEUR
Balance of the Bonds at nominal value 33.3
Leverator’s receivable from CMM IV at nominal value 33.3
Net cash assets 1.1
CMM IV’s solvency deficit -18.5
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------
Total 15.9
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 4 May 2016 the shareholders of Leverator Plc elected the following members
to the Company’s Board of Directors: Mr Tatu Hemmo, Ms Nina Olander, Mr Staffan
Jåfs, Mr Harri Lemmetti, Mr Olli Liitola, Mr Tommi Mäkelä, Mr Antti Palkén, Ms
Katja Salovaara, and Mr Kyösti Ylikortes. The members elected Mr Tatu Hemmo as
Chairman of the Board.
Other significant events during the review period
Leverator’s bondholders approved on 20 January 2016 the proposal by the Board
of Directors to extend the maturity of the Bonds by two years. The consent
relating to this extension became effective on the conditions that Leverator
(i) makes an additional redemption (outside Condition 6 (b) of the terms and
conditions of the Bonds) in a total amount of MEUR 12.6 on 15 February 2016 to
the relevant bondholders holding Bonds on such date, and (ii) deposits a
consent fee of 2% of the outstanding principal amount after all redemptions
made as at 21 June 2016 to an escrow account. Leverator has made the additional
redemption of MEUR 12.6 and paid the consent fee of EUR 665,825 as per the
agreement. The conditions for the extension of the Bonds’ maturity have been
fulfilled and the maturity of the Bond is 21 June 2018. The coupon of the Bonds
and other terms remain the same.
Events after the end of the review period
Leverator’s Board of Directors have at their meeting on 3 November 2016 decided
to apply for a delisting of the Bonds from Nasdaq Helsinki. As of the date of
the meeting, holders of the Bonds representing 97 per cent of the principal of
the Bonds have given their consent to delisting. Leverator will make a separate
announcement regarding the decision of Nasdaq Helsinki and the subsequent
delisting of the Bonds.
Future outlook
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
original loan terms. Developments in the general market environment in the next
few years may continue to cause difficulties for Fund portfolio companies to
pay interest on their mezzanine loans and repay principal to the Fund in
accordance with the revised loan terms. Restrictions in the portfolio
companies’ senior loan agreements may in certain cases prevent the companies
from meeting their interest payments during 2016 despite revisions of the
original loan terms. The aforementioned issues might, in turn, weaken the
Fund’s ability to meet its debt to Leverator Plc in full, which would affect
Leverator’s solvency. It is possible that CMM IV’s solvency weakens further
during 2016 and 2017.
According to the management company the targeted exit valuations of CMM IV’s
mezzanine loans and associated options and shares are higher than their current
valuation, and therefore the Fund may potentially be able to pay back the loan
to Leverator. Given the two-year extension to the Bond’s maturity and the
maturity of Leverator’s loans to CMM IV, it is possible that the value of the
Fund’s portfolio by the time of the Bond’s maturity in June 2018, in addition
to commitments at call from Limited Partners, would be sufficient for the Fund
to meet its obligations to Leverator in full. This outlook is highly uncertain.
It is probable that Leverator’s interest earnings will cover its interest
payable and other operating expenses in 2016.
Leverator Plc will publish its Financial Statements Bulletin 1 January–31
December 2016 on 2 February 2017.
Helsinki 3 November 2016
LEVERATOR PLC
Board of Directors
For further information, please contact:
Olli Liitola, CEO, tel. +358 400 605 040
DISTRIBUTION
NASDAQ Helsinki
Principal media
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 2016 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 2015. The
information presented is unaudited.
LEVERA
TOR
PLC
INCOME
STATE
MENT,
IFRS
EUR 1.7.-30.9.2016 1.1.-30.9.2016 1.7.-30.9.2015 1.1.-30.9.2015
1.1.-31.12.2015
--------------------------------------------------------------------------------
-------
Turnov 0 0 0 0
0
er
Person 0 0 0 0
-28,800
nel
expen
ses
Other -5,948 -128,136 -7,315 -38,525
-88,880
opera
ting
expen
ses
Operat -5,948 -128,136 -7,315 -38,525
-117,680
ing
loss
Financ 20,807 95,591 43,946 131,838
175,863
ial
incom
e and
expen
ses
Profit 14,859 -32,544 36,631 93,313
58,184
/loss
befor
e
taxes
Income 0 0 -7,326 -18,663
-11,637
taxes
Profit 14,859 -32,544 29,305 74,650
46,547
/loss
for
the
finan
cial
year
Total
compr
ehensi
ve
incom
e,
IFRS
The
compa
ny
does
not
have
items
includ
ed in
compr
ehensi
ve
incom
e.
Earnin
gs per
share
:
Earnin 0.0144 -0.0316 0.0285 0.0726
0.0453
gs per
share
, €
LEVERATOR PLC
BALANCE SHEET, IFRS
EUR 30.9.2016 30.9.2015 31.12.2015
----------------------------------------------------------------------
ASSETS
Non-current assets
Other investments 33,291,264 70,313,856 0
Total non-current assets 33,291,264 70,313,856 0
Current assets
Other investments 0 0 70,313,856
Current receivables 825,658 1,666,674 184,606
Cash and bank 984,973 1,028,048 1,057,700
Total current assets 1,810,631 2,694,722 71,556,162
TOTAL ASSETS 35,101,895 73,008,578 71,556,162
EUR 30.9.2016 30.9.2015 31.12.2015
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity
Share capital 102,857 102,857 102,857
Retained earnings 985,531 938,984 938,984
Profit/loss for the financial year -32,544 74,651 46,547
Total shareholders' equity 1,055,844 1,116,492 1,088,388
Liabilities
Non-current liabilities 33,291,264 70,313,856 0
Current liabilities 754,787 1,578,230 70,467,774
Total liabilities 34,046,051 71,892,086 70,467,774
TOTAL SHAREHOLDERS' EQUITY 35,101,895 73,008,578 71,556,162
AND LIABILITIES
LEVERATOR PLC
STATEMENT OF CHANGES IN EQUITY, IFRS
Share capital Retained earnings Total equity
------------------------------------------------------------------------------
Equity on 31.12.2015 102,857 985,531 1,088,388
Loss for the review period -32,544 -32,544
-------------------------------------------------
Equity on 30.9.2016 102,857 952,987 1,055,844
------------------------------------------------------------------------------
Share capital Retained earnings Total equity
------------------------------------------------------------------------------
Equity on 31.12.2014 102,857 938,984 1,041,841
Profit for the review period 74,651 74,651
-------------------------------------------------
Equity on 30.9.2015 102,857 1,013,635 1,116,492
------------------------------------------------------------------------------
LEVERATOR PLC
CASH FLOW STATEMENT, IFRS
EUR 1-9/2016 1-9/2015 1-12/2015
-------------------------------------------------------------------------------
Cash flow from operations
Operating profit/loss -32,544 74,651 46,547
Other adjustments to operating profit/loss -117,050 -132,921 -163,057
Interest paid -2,509,559 -2,869,508 -5,739,017
Interest received 2,586,426 2,957,401 5,914,802
Cash flow from operations -72,727 29,622 59,275
Cash flow from investments
Change in long-term loan receivables 37,022,592 0 0
Consent fee received 665,825 0 0
Cash flow from investments 37,688,417 0 0
Financial cash flow
Change in long-term liabilities -37,022,592 0 0
Consent fee paid -665,825 0 0
Financial cash flow -37,688,417 0 0
Change in cash funds -72,727 29,622 59,275
Cash funds at start of the period 1,057,700 998,426 998,426
Cash funds at end of the period 984,973 1,028,048 1,057,700
Olli Liitola, CEO, tel. +358 400 605 040
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