2009-02-03 16:20:00 CET
2009-02-03 16:20:01 CET
REGULATED INFORMATION
Cencorp - Company Announcement
CHANGE REGARDING CONTEMPLATED CORPORATE TRANSACTION PUBLISHED BY CENCORP PLC AND SAVCOR GROUP LTD OY ON 28 NOVEMBER 2008 - ACQUISITION OF SAVCOR ALFA LTD DIRECTED SHARE ISSUE TO SAVCOR GROUP LTD OY
CENCORP CORPORATION STOCK EXCHANGE RELEASE 3.2.2009 5:20 p.m. CHANGE REGARDING CONTEMPLATED CORPORATE TRANSACTION PUBLISHED BY CENCORP PLC AND SAVCOR GROUP LTD OY ON 28 NOVEMBER 2008 - ACQUISITION OF SAVCOR ALFA LTD - DIRECTED SHARE ISSUE TO SAVCOR GROUP LTD OY Cencorp Plc (“Cencorp”) has by a stock exchange release dated 28 November 2008 published an agreement entered into between Cencorp, Savcor Group Ltd Oy (Savcor) and Sampo Bank Plc on 28 November 2008, by which the above mentioned parties have agreed on conditional financing arrangement (“Conditional Financing Arrangement”) concerning Cencorp. In connection with the above mentioned Conditional Financing Arrangement Savcor has with a stock exchange release dated 28 November 2008 (and with a supplement dated 1 December 2008) informed about an agreement entered into between Savcor, Markku Jokela and FT Capital Ltd being controlled by him (hereinafter “Jokela”) dated 28 November 2008 by which they have agreed on a plan to propose a corporate transaction to Cencorp. According to the planned transaction described in the above mentioned stock exchange releases Cencorp would have acquired the entire share capital of Savcor Alfa Ltd which is owned indirectly by Savcor, provided Savcor Alfa Ltd had immediately before that acquired businesses of Photonium Ltd (“Photonium”)and Akseli Lahtinen Ltd controlled by Jokela (“Transaction”). In connection with the planned Transaction Savcor would have made a voluntary public tender offer for all the shares and option rights in Cencorp (“Tender Offer”). In addition, Savcor and Sampo Bank Plc have agreed on certain sub-arrangements relating to the Conditional Financing Arrangement and the Tender Offer. Later on in this stock exchange release Conditional Financing Arrangement, Transaction, Tender Offer and below described directed share issue to Savcor as well as below described co-operation agreement between Cencorp and Photonium will be jointly referred to as the “Combined Transaction”. CHANGE REGARDING THE TRANSACTION In the negotiations between Cencorp, Savcor and Jokela regarding the Transaction the parties have concluded that the Transaction no more includes acquisition of businesses of Photonium and Akseli Lahtinen Ltd. Accordingly, upon the completion of the contemplated Transaction Cencorp would only purchase the total share capital of Savcor Alfa Ltd without Sacor Alfa Ltd having purchased businesses of Photonium and Akseli Lahtinen Ltd prior thereto. The co-operation with Photonium will be carried out by means of contractual arrangements whereby Photonium will continue its operations as a separate company from Cencorp and offer, among other things, R&D (and possibly contract manufacturing) services of automation equipment to Cencorp. The co-operation agreement has been described in more detail below in this stock exchange release. Change in the Transaction has no effect on the previously announced plans concerning the Conditional Financing Arrangement or Tender Offer. ACQUISITION OF SAVCOR ALFA LTD As part of the Transaction Cencorp and Savcor Face Group Ltd, fully owned subsidiary of Savcor, have on 3 February 2009 signed a conditional purchase agreement, according to which Cencorp will acquire the entire share capital of Savcor Alfa Ltd. Savcor Alfa Ltd is an industrial laser equipment integrator supplying work stations and work cells based on laser technology for laser marking, laser cutting, laser welding and laser micromachining applications. The company has strong knowhow in laser equipment and laser processing processes and the application of the same to various industry needs. The laser work stations developed by Savcor Alfa Ltd are used in telecommunications, electronics, pharmaceutical, metal and automobile industries. The purpose of the Transaction, as well as the co-operation made possible by the below described co-operation agreement between Cencorp and Photonium, is to make Cencorp an even more significant company specialised in automation solutions for the electronics industry and capable of offering more versatile and more effective automation solutions by way of combining laser know-how of Savcor Alfa Ltd and automation know-how brought into the company by Photonium based on the co-operation agreement in order to supplement Cencorp's product and service supply to the current and future customers. In the Transaction the enterprise value (EV) of Savcor Alfa Ltd is agreed to be 2.0 million euros. The interest-bearing net debts of Savcor Alfa Ltd by the completion of the Transaction Ltd are estimated to be approximately 1,1 million euros as a result of which the purchase price for the shares of Savcor Alfa Ltd would be approximately 0,9 million euros. Cencorp and Savcorp Face Group Ltd have agreed that Cencorp will become indebted to Savcor Face Group Ltd in the amount of final purchase price as from the closing of the Transaction. The shares of Savcor Alfa Ltd will remain as a pledge to Savcor Face Group Ltd. The conditions of the debt are in line with normal market terms. The board of directors of Cencorp has requested a statement (so called Fairness Opinion) from Pro Value Corporate Finance Ltd regarding the compensation paid in the Transaction. According to the statement the compensation agreed in the purchase agreement shall be considered, as a whole, reasonable for the shareholders of Cencorp in financial sense when taking into account the synergy benefits of the Combined Transaction. The entry into force of the purchase agreement of Savcor Alfa Ltd is conditional, among others, upon Savcor deciding to complete the Tender Offer related to the Transaction as described in more detail in the stock exchange releases published on 28 November 2008 (and as amended on 1 December 2008) and that no matter or circumstance has happened or occurred in Savcor Alfa Ltd after the signing of the purchase agreement which would, when assessing reasonably, prevented Cencorp from committing to the purchase agreement at the date of signing. The entry into force of the purchase agreement of Savcor Alfa Ltd is estimated to take place in March 2009 at the earliest. The figures below are based on the confirmed financial statements of Savcor Alfa Ltd (“Savcor Alfa”) from the financial period of 1 January 2007 - 31 December 2007 and unconfirmed interim accounts from the period from 1 January to 30 September 2008. The figures are based on the Accounting Act and the possible effects of conversion into the International Financial Reporting Standards (IFRS) have not been taken into account. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Turnover and profitability | | | | -------------------------------------------------------------------------------- | EUR 1 000 | 1 January | 1 January | | | | 2007 -31 | 2008 - 30 | | | | December | September | | | | 2007 | 2008 | | -------------------------------------------------------------------------------- | Turnover | 2 004 | 1 200 | | -------------------------------------------------------------------------------- | EBITDA | 220 | -218 | | -------------------------------------------------------------------------------- | Profit | 146 | -281 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Balance sheet | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 31 December | 30 September | | | | 2007 | 2008 | | -------------------------------------------------------------------------------- | Non-current assets | 541 | 910 | | -------------------------------------------------------------------------------- | R&D costs | 0 | 233 | | -------------------------------------------------------------------------------- | Other intangible rights | 6 | 54 | | -------------------------------------------------------------------------------- | Tangible assets | 535 | 623 | | -------------------------------------------------------------------------------- | Current assets | 800 | 789 | | -------------------------------------------------------------------------------- | Inventory | 83 | 151 | | -------------------------------------------------------------------------------- | Accounts receivables | 294 | 206 | | -------------------------------------------------------------------------------- | Other short-term receivables | 303 | 357 | | -------------------------------------------------------------------------------- | Liquid assets | 119 | 75 | | -------------------------------------------------------------------------------- | Total | 1 341 | 1 699 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity and liabilities | | | | -------------------------------------------------------------------------------- | Equity | 480 | 161 | | -------------------------------------------------------------------------------- | Untaxed reserves | 1 | 0 | | -------------------------------------------------------------------------------- | Long-term debt | 546 | 921 | | -------------------------------------------------------------------------------- | Short-term debt | 314 | 617 | | -------------------------------------------------------------------------------- | Accounts payable | 250 | 520 | | -------------------------------------------------------------------------------- | Other debts | 9 | 13 | | -------------------------------------------------------------------------------- | Accrued expenses | 54 | 84 | | -------------------------------------------------------------------------------- | Total | 1 341 | 1 699 | | -------------------------------------------------------------------------------- The following should be noted while assessing the figures mentioned above: Capitalized R&D costs are based on expected revenues from the specific development projects. Tangible assets consist mostly of machinery and equipment and advance payments. Inventory consists of materials and supplies and finished products. 92 thousand euro of the accounts receivables as per 30 September 2008 are intra-group receivables. Other short-term receivables include mostly POC (percentage of completion) -receivables. As per 30 September 2008, 300 thousand euro of long-term debts were loans from the financial institutions and rest were debts to the group companies. Accounts payable as per 30 Sepetmber 2008 include intra-group loans of 198 thousand euro. The accrued expenses consist mostly of accrued personnel costs. In 2007 and during the first three quarters of the year 2008 Savcor Alfa did not have business transactions with Cencorp. Savcor estimates the turnover of Savcor Alfa from the year 2008 to be somewhat less than in 2007. The EBITDA and profit of the year 2008 are expected to be negative. The investments made during the year 2008 to marketing, product development and increase of manufacturing capacity as well as building on the international maintenance network of the company burden the profitability of the year 2008. The aforementioned numbers are according to FAS. Capitalized R&D costs and the incompleted R&D projects 233 thousand euro do not meet the standards established by IFRS on capitalizing R&D costs and should therefore be adjusted to conform with IFRS by treating the respective items as costs. CO-OPERATION AGREEMENT BETWEEN CENCORP AND PHOTONIUM Cencorp and Photonium Ltd have signed a co-operation agreement on 3 February 2009 according to which the parties have an intention of beginning to have significantly closer co-operation than earlier with each other in different sectors. The co-opretion agreement will replace the supply agreement entered into between Cencorp and Photonium in 2004. As a part of this co-operation Cencorp (consolidated with Savcor Alfa Ltd) would purchase from Photonium at least R&D services and possibly later also contract manufacturing subcontracting services. In addition, Cencorp would act as a distributer of tailored automation solutions offered by Photonium. Co-operation agreement includes also an option, according to which Cencorp, should it so choose, has a right but not an obligation to buy businesses of Photonium and Akseli Lahtinen Ltd under the terms specified in the agreement during three (3) years' period beginning from the entry into force of the agreement. The entry into force of the co-operation agreement is conditional upon the Transaction entering into force. In connection with the signing of the co-operation agreement Savcor has granted Photonium a convertible loan of EUR 0.5 million in addition to the previously granted convertible loan of EUR 0.2 million to improve the financial situation and operational conditions of Photonium. Markku Jokela, the present Managing Director of Photonium, will transfer immediately to the service of Cencorp to become its Technology Director. DIRECTED SHARE ISSUE TO SAVCOR The board of directors of Cencorp has on 3 February 2009 decided, based on the authorization granted by the annual shareholders' meeting on 17 April 2008, on a directed share issue of total maximum of 10,000,00 new shares to Savcor. The subscription price is 0.08 euros per share. The purpose of the directed share issue is to meet the needs of Cencorp's acute financial situation. Savcor has subsribed all the new shares in the share issue directed to Savcor by Cencorp immediately after the decision made by the board of directors of Cencorp. The shares shall be paid by 5 February 2009 at the latest. As a result of the directed share issue the total amount of Cencorp's shares will raise to 64,873,722 shares. The terms of the share issue are attached hereto as appendix 1. The registration of new shares into trade register and entry of the new shares in the book-entry system is intended to be completed as soon as possible. Cencorp will apply for the admission of the new shares to public trading at the stock exchange list of the Helsinki Exchanges so that the new shares are estimated to be in public trading together with the old shares in April 2009, at the latest. In connection with the afore described, Savcor has given Cencorp a loan of 200.000 euros on market terms. Cencorp has notified of agreement regarding Conditional Financing Arrangement between Cencorp, Savcor and Sampo Bank with a stock exchange release on 28 November 2008. Directed share issue to Savcor has no effects on fulfilment or conditions of the planned Conditional Financing Arrangement. EFFECT OF THE COMBINED TRANSACTION ON CENCORP'S EQUITY RATIO Effects of the Conditional Financing Arrangement and Transaction to Cencorp's equity ratio have been assessed in the stock exchange release of Savcor, published on 1 December 2008. The above described change regarding Transaction as well as directed share issue to Savcor cause certain changes to the information published on 1 December 2008. In particular the following factors affect the equity ratio of the Cencorp group following the Combined Transaction: (i) the execution of the Conditional Financing Arrangement (ii) the amount of interest-bearing debt of Savcor Alfa at the time of entry into force of the Transaction (iii) the potential write-downs to be made with respect to certain balance sheet items in connection with the Combined Transaction; and (iv) reporting of the Combined Transaction in accordance with IFRS. As per the initial assessment of Cencorp, the equity ratio of Cencorp group after the Combined Transaction shall be 40-60% assuming the balance sheet position of Cencorp as per 30 September 2008, the balance sheet position of Savcor Alfa to be combined therewith as per 30 September 2008, Savcor's commitment to see to it that Cencorp will receive at minimum an amount of 1,6 million euros of new capital in the pre-emptive rights issue to be arranged as part of the Conditional Financing Arrangement, the commitment of two Board members of Cencorp to invest an amount of 450.000 euros in Cencorp in the share issue to be directed to them as part of the Conditional Financing Arrangement and also taking into account the aforementioned share issue of 0.8 million euros directed to Savcor. The final equity ratio may, however, deviate from this initial assessment. ESTIMATE ON SYNERGIES OF THE COMBINED TRANSACTION The purpose of the Combined Transaction is to make Cencorp an even more significant company specialised in automation solutions for the electronics industry and capable of offering more versatile and more effective automation and laser solutions. The Combined Transaction is expected to be likely to result in total in significant synergies in revenues, costs and financing and other benefits resulting in particular from the strengths of Cencorp and Savcor Alfa complementing each other and closer co-operation than earlier between Cencorp and Photonium based on afore described contemplated co-operation agreement: (i) Savcor Alfa's laser knowhow meets Cencorp's needs to partner in the field of laser technology, (ii) the versatile automation experience of Photonium to be utilised as a result of co-operation agreement enables the combination of the products of Cencorp and Savcor Alfa in a more flexible way into different and new solutions as well as development and manufacturing of new solutions, (iii) the combined product portfolio of Cencorp and Savcor Alfa - as well as products supplied by Photonium based on the co-operation agreement - covers a significant part of the process chain of electronics industry thus enabling the sale of larger combined solutions, (iv) Cencorp's brand recognition and position as an accepted supplier in wide customer base and global distribution and maintenance network further the product sales, (v) the functions and work processes of Cencorp and Savcor Alfa can be developed and rationalized, (vi) the strengthening of Cencorp's balance sheet and the improvements in its cash position enable the company to maintain its significant customer relationships and develop new ones, (vii) decreases in the costs for debt financing as a consequence of the Conditional Financing Arrangement, and (viii) changes that have already been partly completed in Cencorp's board of directors and management increase their industry and customer knowledge and experience in international management. The assessments presented above on the synergies and other benefits of the Combined Transaction are Cencorp's own initial assessments. EXEMPTION GRANTED BY THE FINANCIAL SUPERVISION AUTHORITY According to the decision of the Financial Supervision Authority, Savcor, Markku Jokela (and FT Capital Oy which is under his control in accordance with Chapter 1 Section 5 of the Securities Markets Act as well as Pirjo Jokela and Joni Jokela, jointly “Jokela”) and Sampo Bank Plc operate jointly in the above described Conditional Financing Arrangement, Tender Offer and Transaction in order to exercise decisive control over Cencorp in a manner referred to in the Securities Markets Act. The Financial Supervision Authority has on 3 February 2009 granted Savcor, Jokela and Sampo Bank Plc an exemption from the obligation to launch a tender offer as set forth in Chapter 6 Section 10 of the Securities Markets Act which obligation the said parties would otherwise have when operating jointly as referred to above. This exemption has no effect on the previous exemption granted for the same applicants on 26 November 2008. A precondition for the granting of the exemption by the Financial Supervision Authority to Savcor, Jokela and Sampo Bank is that the said parties will not operate jointly in order to exercise decisive control over Cencorp in other ways than in connection with the arrangement described in the application for exemption. In addition, a precondition for the exemption is that in connection with the publication of the arrangement the said parties publish material and sufficient information on the amendments to the already published arrangement and the effects of the same. CENCORP OYJ Additional information: Hannu Timmerbacka Managing Director Cencorp Oyj Telephone: +358 (0)400 620845 Email: hannu.timmerbacka@cencorp.com SAVCOR GROUP LTD OY Additional information: Hannu Savisalo Managing Director Savcor Group Ltd Oy Telephone: +358 50 2688 +61 417 268070 Email: hannu.savisalo@savcor.com The SAVCOR GROUP is a global technology and industrial services corporation serving customers in the areas such as rehabilitation of industrial and civil assets, telecom and electronic industries as well as forest related industries. Savcor has its chief operations in Australia, China and Europe. Savcor employs more than 1700 people in 13 countries. Its subsidiary, Savcor Group Ltd is listed at the Australian Securities Exchange, ASX since 2007. DISTRIBUTION Helsinki Stock Exchange Main APPENDIX 1: TERMS OF DIRECTED SHARE ISSUE TO SAVCOR GROUP LTD OY The board of directors of Cencorp Plc (“Company”) resolved on 3 February 2009, based on the authorization granted by the annual shareholders' meeting on 17 April 2008, to offer a total maximum of 10,000,00 new shares to Savcor Group Ltd Oy according to the following terms and conditions: Derogation from the pre-emptive subscription right of the shareholders is made and a total maximum of 10,000,00 new shares will be directed to Savcor Group Ltd Oy. In the share issue a derogation from the pre-emptive subscription right of the shareholders is made. Reason for the directed share issue is the Company's acute need for financing and poor possibilities to develope the Company's business without share issue which forms an integral part of the combined transaction agreed with Savcor Group Ltd Oy and certain other parties that is necessary for the survival of the Company as well as available alternatives in order to fulfil the acute need for financing. Accordingly, weightly financial reasons exist for the derogation from the pre-emptive subscription right. The subscription price is 0.08 euros per share. The subscription price is based on the agreement between the Company and Savcor Group Ltd Oy and takes into account the stock exchange price of the Company's share, the acute need for financing and available alternatives of the Company to fulfil said acute need for financing as well as poor possibilities to develop the Company's business without share issue and thereto integrally related combined transaction agreed with Savcor Group Ltd Oy and certain other parties. The subscription price shall be paid in full to the reserve of invested unrestricted equity. The subscription rights are not transferable. In the event that not all of the shares offered are subscribed, no other shareholder or any third party has a secondary subscription right to the shares. The shares shall be subscribed into a separate subscription list. The period for subscription begins immediately and ends on 4 February 2009 at 9 p.m. The subscription price shall be paid by 5 February 2009 at the latest to the bank account designated by the Company. With respect to shares that have been subscribed and paid in the share issue, the board of directors undertakes, without delay after the payment of subscription price, to take care of registration of the shares into the trade register, entry into the subscriber's book-entry account and admission to the public trading. The board of directors shall decide on all other aspects relating to the share issue.
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