LEVERATOR PLC INTERIM REPORT 1 JANUARY – 30 JUNE 2014

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Leverator Plc     Interim Report 7 August 2014 at 10.00  a.m. EEST

 

 

 

LEVERATOR PLC INTERIM REPORT 1 JANUARY – 30 JUNE 2014

 

 

 

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 13.5%, equivalent of EUR 26,000,256, in accordance with the terms of the loan on 23 June 2014. The outstanding bond loan totalled EUR 70,313,856 on 30 June 2014.

 

 

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 28,165 (EUR 28,529 for the review period 1 January – 30 June 2013) and financial income and expenses totalled EUR 118,768 (EUR 140,553). The result for the accounting period was EUR 72,482 (EUR 84,578).

 

 

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 June 2014

 

  MEUR
Outstanding balance to Leverator   70.3
   
CMM IV’s mezzanine loans and associated options and shares:  
     - acquisition cost* 39.8
     - value appreciation* 12.0
Net cash assets  
     - bank deposits 3.3
     - accumulated interest receivables** 0.5
     - Leverator/accumulated interest -0.1
Commitments at call from Limited Partners 10.0
Clawback at call 10.9
Total 76.4

 

 

* 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 €6.1 million on 30 June 2014 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 €10.1 million on 30 June 2013 and by €7.0 million on 31 March 2014.

                                                                

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 June 2014

 

  MEUR
Balance of bonds at nominal value 70.3
   
Leverator’s receivable from CMM IV at nominal value 70.3
Net cash assets 1.0
Total 71.3

 

 

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 8 May 2014 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 September 2014 on 6 November  2014.

 

 

Helsinki 7 August 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 Interim Report 1 January–30 June 2014 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 2013. The information presented is unaudited.

 

 

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

 

 

LEVERATOR PLC          
           
           
INCOME STATEMENT, IFRS          
           
EUR 1.4.- 30.6.2014 1.1.-
30.6.2014
1.4.- 30.6.2013 1.1.-
30.6.2013
1.1.-
31.12.2013
           
Turnover 0 0 0 0 0
           
Personnel expenses 0 0 0 0 -24,000
Other operating expenses -10,860 -28,165 -18,327 -28,529 -69,632
           
Operating loss -10,860 -28,165 -18,327 -28,529 -93,632
           
Financial income and expenses 58,571 118,768 70,277 140,553 280,196
           
Profit before taxes 47,711 90,602 51,950 112,024 186,564
           
Income taxes -9,542 -18,120 -12,728 -27,446 -45,708
           
Profit for the financial year 38,169 72,482 39,222 84,578 140,856
           
Total comprehensive income, IFRS        
The company does not have items          
included in comprehensive income.          
           
Earnings per share:          
           
Earnings per share, € 0.0371 0.0705 0.0381 0.0822 0.1369

 

 

 

 

 
 
 
 
LEVERATOR PLC
     
       
BALANCE SHEET, IFRS      
       
EUR 30.6.2014 30.6.2013 31.12.2013
       
ASSETS      
       
Non-current assets      
       
Investments      
Other investments 70,313,856 112,442,112 96,314,112
       
Total non-current assets 70,313,856 112,442,112 96,314,112
       
Current assets      
       
Current receivables 190,655 286,184 230,712
Cash and bank 968,833 830,506 911,301
       
Total current assets 1,159,488 1,116,691 1,142,013
       
TOTAL ASSETS 71,473,344 113,558,803 97,456,124
       
EUR 30.6.2014 30.6.2013 31.12.2013
       
SHAREHOLDERS' EQUITY AND      
LIABILITIES      
       
Shareholders' equity      
       
Share capital 102,857 102,857 102,857
Retained earnings 840,673 699,817 699,817
Profit for the financial year 72,482 84,578 140,856
       
Total shareholders' equity 1,016,012 887,252 943,530
       
Liabilities      
       
Non-current liabilities 70,313,856 112,442,112 96,314,112
Current liabilities 143,475 229,438 198,482
       
Total liabilities 70,457,331 112,671,550 96,512,594
       
TOTAL SHAREHOLDERS' EQUITY 71,473,344 113,558,803 97,456,124
AND LIABILITIES      
       
       

 

 

 

LEVERATOR PLC        
         
         
STATEMENT OF CHANGES IN EQUITY, IFRS    
         
  Share capital Other reserves Retained   earnings Total equity
Equity on 31.12.2013 102,857 0 840,673 943,530
Profit for the financial year     72,482 72,482
Equity on 30.6.2014 102,857 0 913,155 1,016,012
         
  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     84,578 84,578
Equity on 30.6.2013 102,857 0 784,395 887,252

 

 

 

 

 

 

 


 

 

 

LEVERATOR PLC      
       
       
CASH FLOW STATEMENT, IFRS      
       
EUR 1-6/2014 1-6/2013 1-12/2013
       
Cash flow from operations      
Operating profit 72,482 84,578 140,856
Other adjustments to operating profit -135,343 -143,607 -259,641
Interest paid -3,930,579 -4,588,763 -9,177,525
Interest received 4,050,972 4,729,315 9,458,630
Cash flow from operations 57,531 81,523 162,319
       
Cash flow from investments      
Change in long-term loan receivables 26,000,256 0 16,128,000
Cash flow from investments 26,000,256 0 16,128,000
       
Financial cash flow      
Change in long-term liabilities -26,000,256 0 -16,128,000
Financial cash flow -26,000,256 0 -16,128,000
       
Change in cash funds 57,531 81,523 162,319
Cash funds at start of the period 911,301 748,982 748,982
Cash funds at end of the period 968,833 830,505 911,301

 

 

 

 

 

 

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