2015-11-05 10:45:36 CET
2015-11-05 10:46:37 CET
REGULATED INFORMATION
Leverator - Interim report (Q1 and Q3)
LEVERATOR PLC INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2015
Leverator Plc Interim Report 5 November 2015 at 11.45 a.m. EET
LEVERATOR PLC INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 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
loan matures on 21 June 2016. Leverator has a call option to repay the bonds or
part thereof not earlier than 22 June 2009.
The outstanding bond loan totalled EUR 70,313,856 on 30 September 2015.
Leverator did not repay any instalments of the bond in 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 Company's
interest earnings and interest expenses are presented as financial items in the
income statement. Leverator's operating loss was EUR 38,525 (EUR 43,298 for the
review period 1 January - 30 September 2014) and financial income and expenses
totalled EUR 131,838 (EUR 162,714). The result for the review period was EUR
74,651 (EUR 95,533).
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 2015
MEUR
Outstanding balance to Leverator 70.3
CMM IV's mezzanine loans and associated options and shares:
- acquisition cost* 39.8
- value appreciation* -1.5
Net cash assets
- bank deposits 1.8
- accumulated interest receivables** 0.5
- Leverator/accumulated interest -1.6
Commitments at call from Limited Partners 9.6
Clawback at call 10.9
-----
-----
Total 59.5
* 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 €10.8 million below the total loan receivables
of Leverator on 30 September 2015 and therefore the latter's receivable due
from CMM IV presented below cannot be booked in full. CMM IV's financial assets
were €10.7 million below the total loan receivables of Leverator on 30 June
2015 and €6.2 million below on 30 September 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 may potentially be able to pay back
the loan to Leverator Plc. Given the current market conditions, it is very
unlikely that the value of the fund's portfolio in June 2016, in addition to
commitments at call from Limited Partners, would be sufficient for the fund to
meet its obligations to Leverator in full, unless an extension is granted to
the loan beyond the maturity of 21 June 2016. Moreover and 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. The delayed repayment of the loan would in turn lead to inability of
Leverator Plc to repay the bond by its maturity.
Due to the above mentioned reasons, Leverator Plc has on behalf of CMM IV
initiated negotiations about the extension of the maturity of both the loan
from Leverator to CMM IV as well as the bond issued by Leverator with an aim to
postpone the final loan payments by two years i.e. no later than 21 June 2018.
Leverator has requested its security agent Danske Bank to facilitate the
process of extending the bond's maturity. An extension requires approval from
all bond holders. Leverator aims to work out a solution together with the fund
and bond holders without undue delay before the maturity of the bond.
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 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 -10.8
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------
Total 60.6
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.
Specified 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
and 2016. 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
and 2016.
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 may potentially be able to pay back
the loan to Leverator Plc. Given the current market conditions, it is very
unlikely that the value of the fund's portfolio in June 2016, in addition to
commitments at call from Limited Partners, would be sufficient for the fund to
meet its obligations to Leverator in full, unless an extension is granted to
the loan beyond the maturity of 21 June 2016. Moreover and 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. The delayed repayment of the loan would in turn lead to inability of
Leverator Plc to repay the bond by its maturity.
Due to the above mentioned reasons, Leverator Plc has on behalf of CMM IV
initiated negotiations about the extension of the maturity of both the loan
from Leverator to CMM IV as well as the bond issued by Leverator with an aim to
postpone the final loan payments by two years i.e. no later than 21 June 2018.
Leverator has requested its security agent Danske Bank to facilitate the
process of extending the bond's maturity. An extension requires approval from
all bond holders. Leverator aims to work out a solution together with the fund
and bond holders without undue delay before the maturity of the bond.
It is probable that Leverator Plc's interest earnings will cover its interest
payable and other expenses in 2015 and 2016.
Leverator Plc will publish its Financial Statements Bulletin 1 January-31
December 2015 on 4 February 2016.
Helsinki 5 November 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-30 September 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.
LEVERA
TOR
PLC
INCOME
STATE
MENT,
IFRS
EUR 1.7.- 30.9.2015 1.1.-30.9.2015 1.7.- 30.9.2014 1.1.-30.9.2014
1.1.-31.12.2014
--------------------------------------------------------------------------------
---------
Turnov 0 0 0 0
0
er
Person 0 0 0 0
-26,400
nel
expen
ses
Other -7,315 -38,525 -15,133 -43,298
-56,679
opera
ting
expen
ses
Operat -7,315 -38,525 -15,133 -43,298
-83,079
ing
loss
Financ 43,946 131,838 43,946 162,714
206,740
ial
incom
e and
expen
ses
Profit 36,631 93,313 28,813 119,416
123,661
befor
e
taxes
Income -7,326 -18,663 -5,763 -23,883
-25,350
taxes
Profit 29,305 74,651 23,050 95,533
98,311
for
the
finan
cial
year
Total comprehensive
income, IFRS
The company does not have items included in comprehensive income.
Earnin
gs per
share
:
Earnin 0.0285 0.0726 0.0224 0.0929
0.0956
gs per
share
, €
LEVERATOR PLC
BALANCE SHEET, IFRS
EUR 30/09/2015 30/09/2014 31/12/2014
------------------------------------------------------------------------------
ASSETS
Non-current assets
Investments 70,313,856 70,313,856 70,313,856
Other investments
70,313,856 70,313,856 70,313,856
Total non-current assets
Current assets
1,666,674 1,673,296 27,418
Current receivables 1,028,048 943,996 998,426
Cash and bank
Total current assets 2,694,722 2,617,292 1,185,317
TOTAL ASSETS 73,008,578 72,931,148 71,499,173
EUR 30/09/2015 30/09/2014 31/12/2014
------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
102,857 102,857 102,857
Share capital 938,984 840,673 840,673
Retained earnings 74,651 95,532 98,311
Profit for the financial year
Total shareholders' equity 1,116,492 1,039,062 1,041,841
Liabilities
Non-current liabilities 70,313,856 70,313,856 70,313,856
Current liabilities 1,578,230 1,578,230 143,475
Total liabilities 71,892,086 71,892,086 70,457,331
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 73,008,578 72,931,148 71,499,173
LEVERATOR PLC
STATEMENT OF CHANGES IN EQUITY, IFRS
Share Other Retained Total
capital reserves earnings equity
--------------------------------------------------------------------------------
Equity on 31.12.2014 102,857 0 938,984 1,041,841
Profit for the review 74,651 74,651
period
--------------------------------------------------------------------------------
Equity on 30.9.2015 102,857 0 1,013,635 1,116,492
--------------------------------------------------------------------------------
Share Other Retained Total
capital reserves earnings equity
--------------------------------------------------------------------------------
Equity on 31.12.2013 102,857 0 840,673 943,530
Profit for the review 95,532 95,532
period
--------------------------------------------------------
Equity on 30.9.2014 102,857 0 936,205 1,039,062
--------------------------------------------------------------------------------
LEVERATOR PLC
CASH FLOW STATEMENT, IFRS
EUR 1-9/2015 1-9/2014 1-12/2014
---------------------------------------------------------------------------
Cash flow from operations
Operating profit 74,651 95,532 98,311
Other adjustments to operating profit -132,921 -183,230 -219,551
Interest paid -2,869,508 -3,930,579 -6,800,087
Interest received 2,957,401 4,050,972 7,008,453
Cash flow from operations 29,622 32,694 87,125
Cash flow from investments
Change in long-term loan receivables 0 26,000,256 26,000,256
Cash flow from investments 0 26,000,256 26,000,256
Financial cash flow
Change in long-term liabilities 0 -26,000,256 -26,000,256
Financial cash flow 0 -26,000,256 -26,000,256
Change in cash funds 29,622 32,694 87,125
Cash funds at start of the period 998,426 911,301 911,301
Cash funds at end of the period 1,028,048 943,995 998,426
Olli Liitola, CEO, tel. +358 207 207 506 or mobile +358 400 605 040
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