TCS Invest OÜ (hereinafter TCS), a subsidiary fully owned by AS Premia Foods
(hereinafter PF), concluded on Friday, 7 May 2010, an agreement to purchase the
sole share of St Petersburg based ice cream manufacturer OOO Hladokombinat No 1
(hereinafter HK1), the value of which is RUR 60 520 314 and which constitutes
100% of all the share capital of HK1 and to purchase the sole share of OOO
Hladomagija (hereinafter HM), the value of which is RUR 10 000 and which
constitutes 100% of all the share capital of HM (hereinafter the Transaction).
The Transaction is not a transaction with a related party within the meaning of
the regulation of NASDAQ OMX Tallinn Stock Exchange. The members of the
management board or the supervisory board of PF have no personal interests in
the transaction.
The transaction concerning HK1 is an acquisition of material value, within the
meaning of the regulation of the NASDAQ OMX Tallinn Stock Exchange, thus in
accordance with the abovementioned regulation the management board of PF hereby
discloses the following information concerning the Transaction.
I. The Area of Activity and Description of Business Operations of the Acquired
Companies
OOO Hladokombinat No 1, registry code 1097847020271, situated at Tshernigovskaja
15, St Petersburg, is a company established on 28 January 2009. HK1 is an ice
cream manufacturer that produces and distributes ice cream under trademarks that
are owned by AS Premia Tallinna Külmhoone, a subsidiary of PF.
OOO Hladomagija, registry code 1097847183246, situated at Tshernigovskaja 15, St
Petersburg, is a company established on 7 July 2009, that is without a separate
production and sales activity but which is in the possession of specific
intellectual property rights that support the production and distribution
activities of HK1.
Neither HK1 nor HM has any subsidiaries.
II. The Objective of the Acquisition and the Influence on the Activities of PF
The primary objective of the Transaction is PF's wish to develop and extend its
activities on the St Petersburg ice cream market.
The turnover of PF is expected to rise as a result of the Transaction. The
consolidated pro forma turnover for 2009 of PF, HK1 and HM would have been EEK
1,252 billion.
III. Description of the Transaction
The Transaction is in its essence a share sale transaction. As a result of the
Transaction TCS owns the sole share of HK1 with a nominal value of RUR
60 520 314, which constitutes 100% of the share capital of HK1, and the sole
share of HM with a nominal value of RUR 10 000, which constitutes 100% of the
share capital of HK1.
The sole share of HK1 has been acquired for a price of EUR 3 039 000, that was
transferred in full before the signing of the sales agreement. The sole share of
HM has been acquired for a price of RUR 10 000, that will be transferred within
10 working days from the day the agreement was concluded.
Ownership of the shares of HK1 and HM was transferred on the day the Transfer
was concluded, i.e. on 7 May 2010.
IV. Economic Results
Both HK1 and HM were established in 2009 and thus no financials for the past
three years can be submitted. The following data consists of the more important
audited financials of HK1 and HM as of 2009 and unaudited financial results as
of 31.03.2010. The accounts have been compiled in accordance with the Russian
GAAP and do not comply with the IFRS.
HK1
OOO Hladokombinat No 1
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| BALANCE SHEET in thousands RUR |
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| | 31.12.2009 | 31.03.2010 | |
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| Cash and equivalents | 334 | 1 072 | |
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| Receivables and advance payments | 44 459 | 66 800 | |
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| Inventory | 17 866 | 33 970 | |
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| Current assets | 62 659 | 101 842 | |
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| | | | |
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| Fixed assets | 20 | 60 529 | |
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| Construction-in-progress | 171 | | |
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| Fixed assets | 191 | 60 529 | |
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| | | | |
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| Deferred income tax assets | 672 | 6 053 | |
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| Intangible assets | | 43 | |
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| | | | |
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| Total assets | 63 522 | 168 467 | |
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| | | | |
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| Short term loans | | 82 431 | |
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| Payables and advance payments | 73 532 | 56 619 | |
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| Short term liabilities | 73 532 | 139 050 | |
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| | | | |
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| Deferred tax liabilities | | 863 | |
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| | | | |
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| Share capital | 10 | 60 520 | |
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| Share premium | | 3 163 | |
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| Retained earnings | -10 020 | -35 129 | |
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| Owners equity | -10 010 | 28 554 | |
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| | | | |
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| Owners equity and liabilities | 63 522 | 168 467 | |
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Intra-group loan from TCS Invest OÜ is represented on the line “short term
loans”. The company does not have any additional loans.
Income statement in RUR thousands
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| | 12 months | 3 months 2010 | |
| | 2009 | | |
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| Revenues | 273 576 | 93 984 | |
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| COGS | -185 215 | -80 199 | |
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| Gross profit | 88 361 | 13 785 | |
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| Sales and marketing expenses | -60 362 | -26 240 | |
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| General administrative expenses | -13 405 | -5 726 | |
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| Other income/expenses | -25 374 | -11 941 | |
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| Operating profit | -10 692 | -29 359 | |
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| | | | |
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| Net profit before income tax | -10 692 | -29 626 | |
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| Net profit | -10 020 | -25 109 | |
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| Net profit per share | -10 020 | -25 109 | |
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| Diluted net profit per share | -10 020 | -25 109 | |
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The restructuring of the ice cream business of ZAO Hladokombinat No 1 that was
aimed at preparing the company for sale was carried out during the last
financial year. Starting from April of 2009 the ice cream business was
progressively transferred into a new legal entity, OOO Hladokombinat No 1, the
sole economic activity of which is the production and sale of ice cream. Thus
the economic results for 2009 of OOO Hladokombinat No 1 reflect only partially
the capacity of the ice cream business. The hereunder pro forma accounts have
been compiled in order to show the capacity of the acquired ice cream business
in 2009.
“It is my pleasure to recognize that the sales of OOO Hladokombinat No 1
increased 37% from 1.56 million EUR to 2.13 million EUR in 1st quarter of 2010
compared to the pro forma sales of 1st quarter of 2009, meaning that the company
and our team has done a great job despite of difficult economic environment,”
explained CEO of AS Premia Foods, Mr. Kuldar Leis. ” The operating loss
increased in 1st quarter of 2010 compared to the 4th quarter of 2009, but it was
mainly caused by one-off expenses. The transaction was completed on time and
now it is possible to concentrate our efforts on sales, marketing and cost
control during the forthcoming ice cream season,” explained Mr. Leis.
Pro forma income statement
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| | 12 months | 12 months | |
| | 2009 | 2009 | |
| | in thousand | in thousand | |
| | RUR | EUR | |
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| Revenues | 499 681 | 11 330 | |
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| COGS | -293 783 | -6 661 | |
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| Gross profit | 205 898 | 4 669 | |
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| Sales and marketing expenses | -132 268 | -2 999 | |
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| General administrative expenses | -54 408 | -1 234 | |
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| Other income/expenses | -9 763 | -221 | |
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| Operating profit | 9 459 | 214 | |
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| EBITDA | 20 189 | 458 | |
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HM
As HM is without a separate production and sales activity and the company was
established to keep certain intellectual property rights that HK1 wishes to
utilise in its further economic activities, thus HM is without a turnover or a
profit. Likewise it is impossible show gross profit and diluted net profit per
share. The acquisition of HM may not be regarding as an acquisition of a major
holding, within the meaning of the regulation of the NASDAQ OMX Tallinn Stock
Exchange.
V. Overview of the Important Activities That Have Happened After the End of the
last Financial Year
After the end of the financial year that ended on 31 December 2010, there have
not been remarkable or important changes in the activities of neither HK1 nor
HM.
VI. The List of the Shareholders of HK1 and HM before the Transaction
Before the transaction 100% of the shares of both HK1 and HM belonged to ZAO
Hladokombinat No 1.
VII. Other Information Concerning HK1 and HM
The subsidiary of PF, Premia Tallinna Külmhoone AS, has granted HK1 a loan in
the amount of EUR 2 million, that has to be repaid by 22 June 2010 and that will
earn an interest of 8,5 % a year. As of 7 May 2010 the loan principal balance
was EUR 2 million.
HK1 or HM have no active court or arbitration procedures.
The transactions between HK1 and the companies belonging to the PF group are
only associated with ordinary business activities and have been conducted in
market conditions.
VIII. The Composition of the Management Board and the Supervisory Board of HK1
and HM
The only member of the Management Board of HK1 is Ms Svetlana Stupina, the
company does not have a Supervisory Board.
The only member of the Management Board of HM is Ms Svetlana Stupina, the
company does not have a Supervisory Board.
Additional information:
Andri Avila
CFO
AS Premia Foods
Tel: +372 6 033 800
E-post: andri.avila@premia.ee
http://www.premiafoods.eu