LEVERATOR PLC FINANCIAL STATEMENTS BULLETIN 1 JANUARY – 31 DECEMBER 2013

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Leverator Plc     Financial Statements Bulletin 6 January 2014 at 10.00 a.m. EET

 

 

 

LEVERATOR PLC FINANCIAL STATEMENTS BULLETIN 1 JANUARY – 31 DECEMBER 2013

 

 

 

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 8.4%, equivalent of EUR 16,128,000, in accordance with the terms of the loan on 23 December 2013. The outstanding bond loan totalled EUR 96,314,112 on 31 December 2013.

 

 

Issued tranches and Leverator’s financial performance

 

Issued tranches (trading code LEVJ816216)
 
Tranche Issue date Size of the tranche, MEUR Date of listing Subscription price, %
1st tranche 12 July 2004 8.0 13 July 2004 100.00
2nd tranche 5 June 2006 40.0 13 June 2006 99.137
3rd tranche 28 March 2007 48.0 13 April 2007 98.290
4th tranche 28 April 2009 36.0 5 May 2009 97.389
5th tranche 18 June 2009 60.0 25 June 2009 98.468

 

 

Leverator’s turnover for the accounting 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 93,632 (EUR 94,313 for the review period 1 January – 31 December 2012) and financial income and expenses totalled EUR 280,196 (EUR 350,750). The result for the accounting period was EUR 140,856 (EUR 193,610).

 

 

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 December 2013

  MEUR
Outstanding balance to Leverator   96.3
   
CMM IV’s mezzanine loans and associated options and shares:  
     - acquisition cost* 63.8
     - value appreciation* 15.2
Net cash assets  
     - bank deposits 3.3
     - accumulated interest receivables** 0.5
     - Leverator/accumulated interest -0.2
Commitments at call from Limited Partners 10.0
Clawback at call 10.9
Total 103.5

 

 

* 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 exceed the total loan receivables of Leverator by €7.2 million on 31 December 2013 and therefore the latter's receivable due from CMM IV presented below can be booked in full. CMM IV’s financial assets exceeded the total loan receivables of Leverator by €8.7 million on 30 September 2013 and by €10.5 million on 31 December 2012.

                                                                

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 December 2013

  MEUR
Balance of bonds at nominal value 96.3
   
Leverator’s receivable from CMM IV at nominal value 96.3
Net cash assets 0.9
Total 97.2

 

Leverator’s solvency exceeds 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 3 May 2013 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 Tomi Viia, 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 2014. 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 2014.

 

It is probable that Leverator Plc’s interest earnings will cover its interest payable and other expenses in 2014.

 

Leverator Plc will publish its Interim Report 1 January–31 March 2014 on 8 May 2014.

 

 

Helsinki 6 February 2014

 

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 Financial Statements Bulletin 1 January–31 December 2013 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 2012. The information presented is audited.

 

 

APPENDIX 1. Income Statement, Balance Sheet, Statement of Changes in Equity and Cash Flow Statement

 

LEVERATOR PLC        
         
         
INCOME STATEMENT, IFRS        
         
EUR 1.10.- 31.12.2013 1.1.-31.12.2013 1.10.- 31.12.2012 1.1.-31.12.2012
         
Turnover 0 0 0 0
         
Personnel expenses -24 000 -24 000 -23 200 -23 200
Other operating expenses -21 993 -69 632 -17 778 -71 113
         
Operating loss -45 993 -93 632 -40 978 -94 313
         
Financial income and expenses 69 367 280 196 82 041 350 750
         
Profit before taxes 23 374 186 564 41 063 256 437
         
Income taxes -5 727 -45 708 -10 060 -62 827
         
Profit for the financial year 17 647 140 856 31 003 193 610
         
Total comprehensive income, IFRS
The company does not have items included in comprehensive income.
 
         
Earnings per share:        
         
Earnings per share, € 0,0172 0,1369 0,0301 0,1882
 LEVERATOR PLC        
         
         
               

 

 

LEVERATOR PLC    
     
     
BALANCE SHEET, IFRS    
     
EUR 31.12.2013 31.12.2012
     
ASSETS    
     
Non-current assets    
     
Investments    
Other investments 96,314,112 112,442,112
     
Total non-current assets 96,314,112 112,442,112
     
Current assets    
     
Current receivables 230,712 283,131
Cash and bank 911,301 748,982
     
Total current assets 1,142,013 1,032,113
     
TOTAL ASSETS 97,456,124 113,474,225
     
     
     
EUR 31.12.2013 31.12.2012
     
SHAREHOLDERS' EQUITY AND    
LIABILITIES    
     
Shareholders' equity    
     
Share capital 102,857 102,857
Retained earnings 699,817 506,207
Profit for the financial year 140,856 193,610
     
Total shareholders' equity 943,530 802,674
     
     
Liabilities    
     
Non-current liabilities 96,314,112 112,442,112
Current liabilities 198,482 229,439
     
Total liabilities 96,512,594 112,671,551
     
TOTAL SHAREHOLDERS' EQUITY 97,456,124 113,474,225
AND LIABILITIES    

 

LEVERATOR PLC        
         
         
STATEMENT OF CHANGES IN EQUITY, IFRS    
         
  Share capital Other reserves Retained   earnings Total equity
Equity on 31.12.2012 102,857 0 699,817 802,674
Profit for the financial year     140,856 140,856
Equity on 31.12.2013 102,857 0 840,673 943,530
         
  Share capital Other reserves Retained earnings Total equity
Equity on 31.12.2011 102,857 0 506,207 609,064
Profit for the financial year     193,610 193,610
Equity on 31.12.2012 102,857 0 699,817 802,674

 

 

 

 

 

 

LEVERATOR PLC    
     
     
CASH FLOW STATEMENT, IFRS    
     
EUR 1-12/2013 1-12/2012
     
Cash flow from operations    
Operating profit 140,856 193,610
Other adjustments to operating profit -259,642 -373,173
Interest paid -9,177,525 -11,522,963
Interest received 9,458,630 11,875,908
Cash flow from operations 162,319 173,382
     
Cash flow from investments    
Change in long-term loan receivables 16,128,000 36,736,128
Cash flow from investments 16,128,000 36,736,128
     
Financial cash flow    
Change in long-term liabilities -16,128,000 -36,736,128
Financial cash flow -16,128,000 -36,736,128
     
Change in cash funds 162,319 173,382
Cash funds at start of the period 748,982 575,600
Cash funds at end of the period 911,301 748,982

 

 

 

 

         Olli Liitola, CEO, tel. +358 207 207 506 or mobile +358 400 605 040