Stock Exchange
Release
Ahtium Plc
28 February 2018
Ahtium Plc annual
results review for the year ended 31 December 2017
Next few days
decisive for the Company's operations and future
Key events
2017
- Ahtium Plc's ("Ahtium" or the
"Company") Financial Statements for the financial year ended 31
December 2017 have not been prepared on a going concern basis. The
chosen reporting basis results from the existence of material
uncertainties that cast significant doubt upon the Company's
ability to realise its assets and discharge its liabilities in the
normal course of business and from the lack of visibility on
Ahtium's operational environment twelve months beyond the date of
reporting.
- In January, Ahtium completed the
debt-to-equity conversion issue, based on which the unsecured
creditors of the Company subscribed for a total of 2,081,653,010
new shares in the Company. Consequently, the Company's debt was
reduced by a total of EUR 238.1 million.
- Ahtium's Debt Restructuring
Programme was confirmed by the Espoo District Court. As a result,
the corporate reorganization proceedings of Ahtium were completed,
and the Company's restructuring debt and accrued interest were cut
to EUR 9.6 million, payable to the creditors by 2 June 2019. The
ruling became final and binding in June 2017. Following the ruling
of the Espoo District Court, Ahtium has been focusing on
developing, commercializing and financing its new business
opportunities and managing the remaining liabilities under the
confirmed Debt Restructuring Programme.
- The Group's profit for the
reporting period amounted to EUR 519.1 million, reflecting the
financial impact of the successful completion of the debt-to-equity
conversion issue and the confirmation of Ahtium's Debt
Restructuring Programme.
Key events of
2018 to date
- The ability of Ahtium to carry on
its business is dependent on the materialisation of the Group's new
income generating business opportunities and obtaining funding
therefor.
- The Company has utilized its cash
reserves and continued the negotiations on the co-operation and
funding possibilities relating to the chosen business
opportunities, but has not to date been able to find an overall
solution to secure the continuance of the Company's operations.
Amid the Company's liquidity position turning critical, the next
few days will be decisive for the Company's operations and its
future.
Enquiries
Ahtium Plc Tel +358 20 7129 800
Pekka Perä, CEO
Pekka Erkinheimo, Deputy CEO
Ahtium's annual results review
2017
Introduction
Following the bankruptcy of Ahtium Plc's (former Talvivaara Mining
Company Plc, "Ahtium", the "Company" or the "Parent Company")
operating subsidiary Talvivaara Sotkamo Ltd ("Talvivaara Sotkamo")
on 6 November 2014, trading of Ahtium's shares on the Helsinki
Stock Exchange was suspended. The suspension of trading continues
on the date of this Annual Results Release 28 February 2018.
Ahtium's Financial Statements for
the reporting period 1 January - 31 December 2017 have not been
prepared on a going concern basis. The chosen reporting basis
results from the existence of material uncertainties that cast
significant doubt upon the Company's ability to realise its assets
and discharge its liabilities in the normal course of business and
from the lack of visibility on the Company's operational
environment twelve months beyond the date of reporting. Ahtium's
ability to revise its reporting basis and to regain its status as a
going concern is dependent on the Company's ability to secure the
necessary cash flow for the Company to discharge all of its
liabilities and to continue the Company's viable business.
The confirmation by the District
Court of Espoo of the Company's draft restructuring programme on 2
June 2017 enabled the start of Ahtium's funding process and
facilitated the development of the Company's and its subsidiaries'
(the "Group") new business opportunities. For more information,
please refer to section 'Review of
Operations'.
Review of
Operations
On 4 January 2017, Ahtium announced the final results of the
debt-to-equity share issue, according to which the unsecured
creditors of the Company subscribed for a total of 2,081,653,010
new shares in the Company. The subscription price per new share was
EUR 0.1144, which was paid in its entirety by setting off the
unsecured restructuring debt receivable of the creditor from the
Company against the subscription price of the new shares.
Consequently, the Company's debt was reduced by a total of EUR
238.1 million and the total number of shares in the Company
increased to 4,189,807,162 shares. The new shares were registered
in the trade register maintained by the Finnish Patent and
Registration Office and issued as book-entry securities in the
book-entry system maintained by Euroclear Finland by 5 January
2017. The new shares were listed on the official list of the
Helsinki Stock Exchange by 9 January 2017. The new shares carry the
shareholders' rights after the registration in the trade register
and the subscriber's book-entry account. The debt-to-equity share
issue was one of the special conditions for the entry into force of
Ahtium's Draft Restructuring Programme.
On 31 Jaunuary 2017, Ahtium's
Board of Directors approved the closing of the acquisition of the
energy saving technology, which was based on an agreement signed on
4 October 2016. The core of the technology acquired was a new
measurement and adjustment system that improves the alternating
current electric arc furnace steel making process by reducing
energy consumption and stabilizing melting and heating processes.
The Company believes that the market potential of its technology is
significant. The object of sale consisted of the rights to the
system on which the technology is based and the existing equipment
utilizing the technology. The assets were acquired by a
wholly-owned subsidiary of the Company, FATB Ltd. The purchase
price of the technology is five percent of the EBIT generated by
the technology in the future. However, the Company has the right to
terminate the EBIT based earn-out arrangement by paying a lump sum
of EUR 2 million to the seller of the technology. In addition, the
Company has paid compensation for the equipment reflecting its
reasonable development and manufacturing costs of EUR 160,000. For
more information, please refer to section 'Business development projects'.
The Company also announced that it
has initiated a commercialization project, based on its chemical
engineering expertise, focused on developing more efficient use of
nutrients and energy production from renewable raw materials
related to livestock farming. The Company's studies show that a
rational and efficient disposal of manure from livestock farming is
challenging given geographical balance of livestock density and
land availability for manure spreading in many areas in Finland and
particularly in Central Europe. For more information, please refer
to section 'Business development
projects'.
On 2 February 2017, an
Extraordinary General Meeting of Ahtium resolved to authorise the
Board of Directors to resolve on a share issue for consideration
pursuant to the shareholders' pre-emptive subscription right to
raise the funds needed to pay the remaining restructuring debts of
the Company and/or to finance the development of the Company's new
business opportunities. Based on the authorization, the number of
shares which can be issued through one or several share issues
shall not exceed 40,000,000,000 shares in aggregate. The Board of
Directors may decide to issue new shares and/or the Company's own
shares held in treasury by the Company. The Board of Directors has
the right to decide upon the offering to parties determined by the
Board of Directors of any shares that may remain unsubscribed for
pursuant to the shareholders' pre-emptive subscription right.
Should the total number of the shares in the Company afterwards
decrease as a result of a reverse share split, the maximum number
of the shares to be issued based on the authorisation shall
decrease pro rata. The Board of Directors is authorised to
determine the subscription price for the new shares and the other
terms and conditions of the share issue. The authorisation of the
Board of Directors to issue shares is valid until 30 June 2018. The
authorization for a share issue was one of the special conditions
for the entry into force of Ahtium's Draft Restructuring
Programme.
On 6 March 2017, the Company
announced that the Administrator of the Company's corporate
reorganization proceedings has filed a request for confirmation of
the Restructuring Programme of Ahtium to the District Court of
Espoo. According to the Administrator's request, all the special
conditions set for the confirmation and entry into force of the
Restructuring Programme have been fulfilled. Based on the final
Draft Restructuring Programme filed with the District Court of
Espoo on 10 April 2015, the Administrator was to notify the
District Court of the fulfillment of the special conditions and to
request the confirmation of the Restructuring Programme by 10 April
2017.
On 23 March 2017, Ahtium was
informed by the Administrator that the District Court of Espoo has
requested the Company to give a response in the matter concerning
the confirmation request filed to the District Court by the
Administrator on 6 March 2017. Concurrently, the Company was
notified that Finnvera Plc, Nordea Bank AB (Publ.), Finnish branch,
Danske Bank Plc, OP Corporate Bank Plc and Svenska Handelsbanken
AB, Finnish branch have given a response to the District Court
where they have objected the confirmation of the restructuring
programme, requesting the cessation of the corporate reorganization
proceedings and placing the Company in bankruptcy.
On 29 March, the Company announced
that Finnvera Plc, Nordea Bank AB (Publ.), Finnish branch, Danske
Bank Plc, OP Corporate Bank Plc and Svenska Handelsbanken AB,
Finnish branch have requested the cancellation of the bankruptcy
matter initiated at the District Court of Espoo on 22 March 2017.
The cancellation request had no effect on the banks' requests for
the cessation of the reorganization proceedings or on their
objection to the confirmation of the restructuring programme. The
proceedings regarding the confirmation request filed by the
Administrator on 6 March 2017 continued at the District Court of
Espoo.
On 17 May 2017, Ahtium announced
that it will adjust its business operations with the aim of
securing sufficient cash reserves for initiating its new businesses
and for obtaining the funding required in connection therewith. The
need for the adjustment was brought about by the delays in having
Ahtium's Debt Restructuring Programme confirmed due to reasons
outside the Company's control. The delay had materially impeded the
Company's ability to acquire, develop or finance its new
businesses. As part of the adjustment actions, the Company laid off
temporarily, on economical and production-related grounds, some of
its personnel wholly or partly as of the beginning of June. In
addition, the Company had agreed with some of the members of the
management who will remain outside the scope of the lay-offs on a
voluntary arrangement whereby such employees will accept a portion
of their compensation from the Company as debt, which shall be
repaid to the employees once the new financing required for the
Company's new business operations has been obtained. Furthermore,
the CEO and the members of the Board of Directors of Ahtium had
notified the Company that they will accept 75 % of the fees payable
to them from the Company in the form of debt, which will likewise
be repaid once the new financing required for the Company's new
business operations has been obtained. Despite the adjustment
actions, the Company has continued the development of its new
businesses and its projects in the circular economy sector, as well
as the energy saving business. With the adjustment actions, the
Company targeted monthly savings of some 50% in its monthly
personnel costs, which has helped the securing of sufficient cash
reserves for developing the Company's new businesses in accordance
with its plans, despite the delays in having the Company's Debt
Restructuring Programme confirmed.
On 2 June 2017, the District Court
of Espoo gave its ruling and confirmed Ahtium's Debt Restructuring
Programme. The Court also accepted entry into force of the
Programme despite the possible appeal process. As a result of the
ruling, the corporate reorganization proceedings of Ahtium were
completed, and the Company's restructuring debt and accrued
interest were cut down to EUR 9.6 million, payable to the creditors
by 2 June 2019. The ruling became final and binding in June
2017.
On 23 November 2017, an
Extraordinary General Meeting of the Company resolved to change the
company name into Ahtium Oyj with a parallel company name Ahtium
Plc, and to move the corporate seat of the Company to Espoo. The
venue of the Company's general meetings was confirmed to be either
the corporate seat or Helsinki. The new company name was registered
at the Trade Register on 28 November 2017. The extraordinary
general meeting also resolved to authorise the Board of Directors
to decide on the issuance of new shares and the transfer of the
Company's own shares as well as the issuance of special rights
referred to in Chapter 10 Section 1 of the Finnish Companies Act to
provide more alternatives for financing the development of the
Company's new business opportunities. Under the authorisation, the
number of new shares that may be issued based on decision(s) of the
Board of Directors would not exceed 418,980,716 shares, which
corresponds to approximately 10 percent of all shares in the
Company, and the number of the Company's own shares that may be
transferred would not exceed 209,490,358 shares, which corresponds
to approximately 5 percent of all shares in the Company.
Furthermore, the Board of Directors is authorised to issue special
rights referred to in Chapter 10 Section 1 of the Finnish Companies
Act entitling their holder to receive new shares or the Company's
own shares for consideration in such a manner that the subscription
price for the shares is to be set off against a receivable of the
subscriber (convertible bond). The number of shares which may be
issued or transferred based on the special rights shall not exceed
418,980,716 shares, which corresponds to approximately 10 percent
of all shares in the Company. This aggregate number of shares is
included in the previously mentioned aggregate numbers of shares
that may be issued and transferred. The new shares may be issued
and the Company's own shares transferred for consideration,
including a set-off against a receivable from the Company, or
without consideration. The new shares and the special rights
referred to in Chapter 10 Section 1 of the Finnish Companies Act
may be issued and the Company's own shares transferred to the
shareholders in proportion to their current shareholdings in the
Company or in deviation of the shareholders' pre-emptive rights by
way of a directed issue if there is a weighty financial reason for
the Company to do so. A directed share issue would be executed
without consideration only if there is a particularly weighty
financial reason for the Company to do so, taking the interests of
all its shareholders into account. Should the total number of the
shares in the Company later decrease as a result of a reverse share
split, the maximum number of shares to be issued based on the
authorisation will decrease pro rata. The authorisation is valid
until 31 December 2018 and it does not cancel the share issue
authorisation given by the extraordinary general meeting on 2
February 2017.
The extraordinary general meeting
also resolved to reduce the reserve for invested unrestricted
equity pursuant to the balance sheet of the Company per 30 June
2017, EUR 1,036,109,774, in its entirety. The reserve for invested
unrestricted equity was EUR 0 after the reduction and the reserve
for invested unrestricted equity was dissolved. The extraordinary
general meeting resolved further to reduce the share premium
reserve pursuant to the balance sheet of the Company per 30 June
2017, EUR 8,085,842, in its entirety. The share premium reserve was
EUR 0 after the reduction and the share premium reserve was
dissolved. Both reserves were used fully to cover the accumulated
losses of the Company.
Since June 2017, Ahtium has been
focusing on developing, commercializing and financing its new
business opportunities and managing the EUR 9.6 million liabilities
set in the confirmed Debt Restructuring Programme and continues
this work also on the date of the Company's Financial Statements 28
February 2018.
Financial
review
Financial
result
The operating loss for the reporting period was EUR 3.5 million (31
December 2016: EUR 213.8 million operating profit). The Group did
not have any revenues during the reporting period. The costs are
mainly personnel costs, development costs, legal fees and other
operating expenses.
Finance income for the review
period was EUR 525.3 million (31 December 2016: EUR 0.02 million)
and consisted mainly of the profit resulting from the completion of
the debt-to-equity conversion issue in January 2017, and of income
generated due to the confirmation of the Company's draft
restructuring programme in June 2017, as a result of which the
accrued interest on the Company's restructuring debt was reversed
entirely, and the Company's unsecured restructuring debt was cut by
99 per cent, whilst the secured restructuring debt was cut down to
EUR 7.5 million in aggregate. The remaining part of the finance
income was interest on deposits and receivables. Finance costs of
EUR 2.7 million (31 December 2016: EUR 15.3) million) resulted
mainly from booking the accrued interest on the bonds until their
maturity date 4 April 2017, and on the Revolving Credit Facility
until the confirmation of the draft restructuring programme on 2
June 2017 in accordance with their original terms, as well as from
booking the interest accrued on the secured restructuring debt
during the corporate reorganization proceedings as stipulated in
the Debt Restructuring Programme. This interest is customarily
subject to voluntary restructuring agreed by the secured creditors
and the debtor. For more information, please refer to section
'Provisions and other items recognised based on
Debt Restructuring Programme'. The remaining part of the
finance costs were other related financing expenses accrued on
borrowings.
The profit for the reporting
period amounted to EUR 519.1 million (31 December 2016: EUR 198.5
million). Earnings per share were EUR 0.12 (31 December 2016: EUR
0.09). Based on the Finnish Accounting Standards applied to the
Parent Company, the profit of the Parent Company for the reporting
period amounted to EUR 283,3 million, since the conversion issue
has been recorded in the reserve for invested unrestricted equity
without impacting the P/L account.
Liquidity
As at 31 December 2017, the Company's cash and cash equivalents
amounted to EUR 0.44 million (EUR 3.8 million as at 31 December
2016).
Financing
During the review period, the Company has financed its operations
entirely from its cash reserves.
Equity
Following Talvivaara Sotkamo's bankruptcy in 2014, the Company
fully wrote off its receivables from, and the shares held in,
Talvivaara Sotkamo. As a result, Ahtium forfeited its equity, which
was acknowledged by the Company's Board of Directors and notified
to the Trade Register. Ahtium had already recognised the weakening
of its financial position in November 2013 and took measures to
mitigate this by applying for corporate reorganisation.
Provisions and
other items recognised based on Debt Restructuring
Programme
Based on the provisions of the confirmed Debt Restructuring
Programme, interest equal to 12-month EURIBOR added with 2 percent
units p.a. shall accrue on the secured loans of in total EUR 7.5
million for the duration of the corporate reorganisation
proceedings. The interest expense on the secured debt accrued from
the beginning of the restructuring proceedings 29 November 2013
until its completion on 2 June 2017 amounts to EUR 0.6 million. It
is customary that the debtor and the secured creditors agree to
adjust such interest liability in terms of the repayable amount
and/or the repayment schedule. Pending such potential agreement by
and between the Company and the secured creditors, the Company has
booked the entire amount as a provision.
Assets
On the statement of financial position as at 31 December 2017,
property, plant and equipment totalled EUR 0.01 million (31
December 2016: EUR 0.02 million). Intangible assets totalled EUR 0
(31 December 2016: EUR 0). Due to the applied non-going concern
reporting basis, the Company has written down the value of its
shares in Fennovoima as well as the equity investments made into
FATB Oy for covering the development and manufacturing costs of the
energy saving technology.
Corporate
reorganisation
Pursuant to the ruling by the District Court of Espoo of 2 June
2017, Mr. Pekka Jaatinen, who had been acting as the Administrator
of the Company's corporate reorganisation proceedings, was
appointed the Supervisor under the confirmed Debt Restructuring
Programme. The main task of the Supervisor is to monitor that the
payment schedule is complied with and that payments are made to the
creditors when the Supervisor deems that this can be done without
jeopardizing the operations of the Company.
Reporting
basis
Ahtium's Financial Statements for 2017 have not been prepared on a
going concern basis. The basis for preparation is that the
operations of the Company may end in near future. This results from
material uncertainties that cast significant doubt upon the
Company's ability to realise its assets and discharge its
liabilities in the normal course of business. There is also lack of
visibility on the Company's operational environment twelve months
beyond the date of reporting.
Ahtium's ability to revise its
reporting basis and to regain its status as a going concern is to a
paramount extent dependent on Ahtium's success in securing the
necessary funding and/or cash flow for the Company to discharge all
of its liabilities and to continue the Group's viable business.
Business
development projects
Ahtium's strategic aim is to establish a sustainable business or
businesses that match the expertise inherent in the Company as well
as to provide the prospect of early cash flow. The new business
opportunities investigated by the Company include, among others,
projects in the recycling, energy-saving and energy production
sectors. Ahtium is also studying and further developing a number of
other opportunities within the so-called "circular economy" in
areas related to metallurgy, chemical processing and construction
that could meet its investment requirements in the short term.
Ahtium has, through its subsidiary
FATB Ltd, continued the development of the energy saving technology
business. Energy consumption is one of the largest components of
operational expenditure for electric arc furnaces used in the steel
making process, and reducing energy costs by just a few percent can
materially improve profitability of a steel mill utilising electric
arc furnaces. The Company also expects the technology to stabilize
the melting process and even increase the capacity of an electric
arc furnace. Ahtium has continued the development and testing of
the technology to refine the technology and to ready it for
deployment in an industrial environment. Test runs of the
technology will start at the selected prospective clients during
the winter of 2018.
In addition, the Company has
initiated a commercialization project, based on its chemical
engineering expertise, focused on developing more efficient use of
nutrients and energy production from renewable raw materials
related to livestock farming. Ahtium is studying possibilities to
create processing units to enable the economic extraction of
valuable content as commercial products from manure streams while
at the same time facilitating the management of the nutrient
streams in a way that benefits the livestock farmers. The Company's
target is to convert manure to energy fraction and high-quality
fertilizers and to purify the liquid fraction to a level that
allows safe discharge into the environment, and to recover the
nutrients as useful fertilizers. During the review period, the
Company has developed the technology further and sought financing
for starting industrial scale trial runs.
Ahtium acquired in 2011-2012 an
approximately 60MW capacity share in the Fennovoima nuclear project
in Finland. Ahtium is currently not in a position to make further
investments into the project and has therefore not been able to
commit to further funding of the project.
Legal
proceedings
Investigation on
Ahtium's disclosure practices
In April 2015, Ahtium confirmed that a number of current and former
members of Ahtium's management have been heard in connection with
an investigation relating to the Company's disclosure practices. On
16 May 2016, the Company was informed that the consideration of
charges had been completed and that the prosecutor had decided to
bring charges for security markets information offence against CEO
Pekka Perä, former CEO Harri Natunen and former CFO and Deputy CEO
Saila Miettinen-Lähde. The prosecutor also requested a corporate
fine of EUR 0.5 million to be imposed on Ahtium. The Company has
already in the past gone through the applied disclosure practices
extensively and in great detail with the Financial Supervisory
Authority and the Company's view is that no crime has been
committed.
The Helsinki District Court gave
its ruling on 2 June 2017, giving a suspended sentence to CEO Pekka
Perä for disclosure offenses during 2012-2013. Of the ten charges
concerning Mr. Perä, seven were dismissed in their entirety and one
partially. The other defendants, former CEO of the Company Harri
Natunen and the Company's former CFO / Deputy CEO Ms. Saila
Miettinen-Lähde were given fines. The Court ordered the Company to
EUR 50,000 corporate fines, which is however considered
restructuring debt of last priority, which would not receive any
payment under the Company's authorized payment schedule. The
Company and the defendants have appealed the decision to the
Helsinki Court of Appeals. In the Company's view, the decision of
the Helsinki District Court has no impact on the Company, its
financial position or on the position of the CEO.
Alleged misuse of insider information
The Company was notified on 20 October 2015 that charges have been
brought against a member of its Executive Committee in the Helsinki
District Court on a case concerning alleged misuse of insider
information. The Company was not a party to the case, but has been
notified that the insider dealing charges concerned the same time
period as the disclosure case. In its ruling of 2 June 2017, the
Helsinki District Court gave also a decision on the misuse of
inside information, giving a suspended sentence to the Executive
Committee member. The decision has been appealed to the Helsinki
Court of Appeals. In the Company's view, the decision of the
Helsinki District Court has no impact on the Company, its financial
position or on the employment of the member of the Executive
Committee in the Company.
Insider dealing charges brought against a member of Ahtium's
Executive Committee
On 9 March 2017, Ahtium announced that charges have been brought
against a member of its Executive Committee on a case concerning
alleged misuse of insider information. The Company is not a party
to the case, but to the Company's understanding the charges concern
the same time period of 2012-2013 as the disclosure case. The
Company's view is that the brought charges have no impact on the
Company or its financial position nor do they give any reason to
reassess the composition of the Company's Executive Committee.
Gypsum pond
leakages and discharges into water ways
On 13 May 2016 the District Court of Kainuu gave its ruling on the
case concerning the gypsum pond leakages of the Sotkamo mine in
November 2012 and April 2013 and the sodium, sulphate and manganese
discharges that exceeded the anticipated amounts stated in the
original environmental permit application of the Sotkamo mine.
Originally the charges were brought against four members of
Ahtium's management, including CEO Pekka Perä and former CEO Harri
Natunen. The charges concern aggravated impairment of the
environment. Harri Natunen has not been employed by the Company
since the autumn of 2015.
The case concerning the discharge
of raffinate from the metals recovery plant and dilute secondary
heap solutions into the open pit during the period of 19 December
2013 - 31 January 2014 was handled together with the above
-mentioned case. The charges were brought against CEO Pekka Perä
for impairment of the environment.
The District Court dismissed the
charge concerning aggravated impairment of the environment and
moderated the type of the crime to impairment of the environment.
Penalties in the form of a fine were imposed on Pekka Perä, Harri
Natunen and the former chief operations officer of the mine, who
acts as a member of the Executive Committee of the Company. The
prosecutor's demands concerning a suspended prison sentence and
compensation for the benefit obtained from the crime were dismissed
in relation to the private defendants. All charges were dismissed
in relation to the fourth defendant. The charges concerning the
discharge of raffinate from the metals recovery plant and dilute
secondary heap solutions into the open pit made against Pekka Perä
were dismissed. Ahtium has not been a party to the court case.
The decision is not yet final and
binding. The three defendants and the prosecutor have appealed the
case to the Rovaniemi Court of Appeals, and the main hearing at the
Court of Appeals was held in the autumn of 2017. The ruling of the
Court of Appeals is expected in March 2018.
Risk management
and key risks
Ahtium's near-term risk factors include particularly such risks
that relate to the financing and sufficiency of funds to meet its
actual and potential liabilities:
If the Group is not able to create cash flow generating
business or receive other funding to finance its operations,
stakeholders could lose their entire investment in the
Company
The Ahtium Group does not
currently have any income-generating business, and is therefore
financing its operations entirely from its cash reserves. Even
though the Company has already taken actions to minimize the
current cost basis by temporarily laying off a part of its
personnel and has kept its firm focus on a timely development of
its business projects, maintaining and developing the current
business opportunites and operations will require additional
funding in the immediate future. Failure by the Company to obtain
such financing while the business operations still yield
insufficient cash flow could result in the bankruptcy of the
Company. As a result, shareholders and creditors could lose their
entire investment in the Company.
If Ahtium is not able to make the payments under the
authorized payment schedule, stakeholders could lose their entire
investment in the Company
There can be no assurance that the
Company will eventually be able to make the payments in accordance
with the authorized payment schedule due to insufficiency of funds,
changes in circumstances affecting the financial viability of
Ahtium, or insufficient income or cash reserves. If the corporate
reorganisation fails for these or any other reasons, it could
result in the bankruptcy of the Company. As a result, shareholders
and creditors could lose their entire investment in the
Company.
The issuance of new equity instruments will lead to a
significant dilution of the existing shareholding of
Ahtium
The issuance of new equity
instruments may lead to a significant dilution of the existing
shareholding of the Company. The extent of dilution will eventually
be determined by the subscription price of the newly issued shares
offered and the amount of funds raised in the potential equity
financing.
Personnel
Headcount and remuneration
Ahtium's personnel comprises an expert organisation, the core
competences of which include, for example, production processes,
procurement, environmental safety, risk management and
communications. The salaries of Ahtium's personnel are based on
industry-wide collective agreements. The total compensation of the
key individuals has traditionally consisted of a base salary and
short and long term incentive schemes based on annual bonuses,
stock options and other share-based incentive schemes. However, due
to exceptional circumstances surrounding the Company there are
currently no short term or long term incentive schemes in
place.
Due to the unexpected delays in
having the Company's Debt Restructuring Programme confirmed, Ahtium
laid off temporarily approximately 50 % of its personnel wholly or
partly as of the beginning of June. In addition, the Company agreed
in May 2017 with those members of the management who remained
outside the scope of the lay-offs on a voluntary arrangement
whereby such employees will accept a portion of their compensation
from the Company as debt, which shall be repaid to the employees
once the new financing required for the Company's new business
operations has been obtained. The voluntary arrangement with the
members of the management was in force for 6 months and ended in
December 2017.
Ahtium's headcount was 19 at the
end of the reporting period on 31 December 2017 (31 December 2016:
20). 74 % (31 December 2016: 75 %) of Ahtium's employees were men
and 26 % (31 December 2016: 25 %) were women. The average age of
the Company's employees was 48 years (31 December 2016: 47 years).
During the review period, six persons (five full-time and one
part-time) were hired for the development work and
commercialization of FATB Ltd's energy saving technology.
Corporate
governance statement
Ahtium issues its Corporate Governance Statement of 2017 and
publishes it on the Company's website at www.ahtium.com on the week
starting 12 March 2018. The Corporate Governance Statement does not
form part of the Board of Directors' Report.
Resolutions of
the Annual General Meeting
Ahtium's Annual General Meeting was held on 15 June 2017 in Espoo,
Finland. The resolutions of the AGM included:
-
that no dividend be paid for the financial year
2016;
-
that the annual fee payable to the members of
the Board for the term until the close of the Annual General
Meeting in 2017 be as follows: Chairman of the Board of Directors
EUR 75,000/year, Chairman of the Audit Committee EUR 48,000/year
and other Non-executive Directors: EUR 43,000/year. No separate
meeting fees are paid for the Board or the Committee work;
-
that the number of Board members be three (3)
and that Mr. Tapani Järvinen, Mr. Stuart Murray and Ms. Solveig
Törnroos-Huhtamäki were re-elected; and
-
that the auditor be reimbursed according to the
approved auditor's invoice and authorised public accountants
PricewaterhouseCoopers Oy be elected as the Company's
auditor.
At its constituent meeting on 15
June 2017, the Board of Directors re-elected Mr. Tapani Järvinen as
the chairman of the Board.
Shares and
shareholders
The number of shares issued, outstanding and registered on the
Euroclear Shareholder Register as of 31 June December 2017 was
4,189,807,162.
As at 31 December 2017, the only
shareholder holding more than 5% of the shares and votes of Ahtium
was Solidium Oy (7.6%).
As at 31 December 2017 the shares
held in treasury by the Company amounted to in aggregate
192,883,000 (4.6% of the shares in the Company). The shares held in
treasury by the Company do not carry any voting rights.
Share based
incentive plans
As at 31 December 2017, the Company has no share based incentive
schemes in place.
Events after the
review period
As at the date of these Financial Statements 28 February 2018, the
Group's cash and cash equivalents amount to approximately EUR 0.12
million.
The Company was notified on 30
January 2018 that charges have been brought against the CEO and a
member of its Executive Committee acting as the Deputy CEO on a
case concerning alleged misuse of insider information. The charges
concern the sale of subscription rights by the former key
employees' holding company Talvivaara Management Ltd in March 2013,
which sales proceeds were used to subscribe for the shares in the
Rights Issue organized by Talvivaara Mining Company Plc. Talvivaara
Management Ltd was a holding company whose shareholders included,
in addition to the CEO and the Deputy CEO of the Company, 14
employees among Talvivaara Mining Company Plc's management and key
employees. The sole purpose of the company was to hold shares in
Talvivaara Mining Company Plc. Talvivaara Management Ltd was
dissolved in the spring 2015.
Talvivaara Management Ltd
participated in Talvivaara Mining Company Plc 's Rights Issue in
March 2013. The company financed its subscriptions by selling
through public trading a part of its subscription rights relating
to the Rights Issue and by using the entire sales proceeds, net of
income taxes, to subscribe for new shares in Talvivaara Mining
Company Plc. Talvivaara Mining Company Plc lowered its annual
production guidance in July 2013, four months after the Rights
Issue and the cessation of trading in the subscription rights, at
which time Talvivaara Management Ltd still held all the shares in
Talvivaara Mining Company Plc subscribed for in the Rights Issue or
acquired prior to that. During its existence, Talvivaara Management
Ltd never sold any of the shares it held in Talvivaara Mining
Company Plc. To the Company's understanding, the charges concern
aggravated misuse of insider information, but according to the
charges the defendants have not gained any personal benefit, which
would be required to be forfeited through the court process. The
Company is not a party to the case, and the Company's view is that
the brought charges have no impact on the Company or its financial
position nor do they give any reason to reassess the position of
the CEO or the composition of the Company's Executive
Committee.
During 2018, the Group has
continued the development of its business projects, negotiated
intensively on new business opportunities and focused on finding a
funding solution for the near and medium term.
Short-term
outlook
The operational outlook for Ahtium is greatly dependent on the
materialisation and further development of the Group's new income
generating business opportunities and/or obtaining funding
therefor.
Whilst the final Debt
Restructuring Programme gives the Company reasonably ample time to
discharge all of its liabilities under the restructuring programme,
there is no certainty that the Company will be successfull in
developing its new business opportunities and, ultimately, in
making the due payments in accordance with the authorised payment
schedule. As at the date of this Annual Results Release 28 February
2018, the Company is still engaged in negotiations on the
co-operation and funding possibilities relating to the chosen
business opportunities. The Company has not however been able to
find an overall solution that would secure the continuance of the
Company's operations. Amid the Company's liquidity position
turning critical, the next few days will be decisive for the
Company's operations and its future.
Board of
Director's proposal for profit distribution
The Board of Directors is proposing to the Annual General Meeting
that no dividend is declared in respect of the year 2017 and that
the profit of the financial period is entered into the Parent
Company's profit/loss account on the balance sheet.
Ahtium Plc
Board of Directors
BALANCE SHEET |
|
|
|
|
|
Group,
IFRS |
Parent
Company, FAS |
|
Unaudited |
Unaudited |
(All amounts in EUR) |
As at
31 Dec 17 |
As at
31 Dec 16 |
As at
31 Dec 17 |
As at
31 Dec 16 |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
13,763 |
18,899 |
13,763 |
18,899 |
Intangible assets |
- |
- |
- |
- |
Other receivables |
27,482 |
26,822 |
27,482 |
26,822 |
Investments in group companies |
- |
- |
13,500 |
13,500 |
Total non-current assets |
41,245 |
45,721 |
54,745 |
59,221 |
|
|
|
|
|
Current assets |
|
|
|
|
Trade receivables |
- |
- |
162,999 |
- |
Other receivables |
185,502 |
268,890 |
141,802 |
268,756 |
Cash and cash equivalents |
440,115 |
3,776,623 |
291,252 |
3,765,827 |
Total Current assets |
625,616 |
4,045,513 |
596,053 |
4,034,583 |
|
|
|
|
|
TOTAL ASSETS |
666,862 |
4,091,234 |
650,799 |
4,093,804 |
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
|
|
|
|
|
|
Equity attributable to the
owners |
|
|
|
|
|
|
|
|
|
Share capital |
80,000 |
80,000 |
80,000 |
80,000 |
Share premium |
- |
8,085,842 |
- |
8,085,842 |
Other reserves |
- |
797,348,200 |
- |
797,968,638 |
Retained deficit |
(10,363,252) |
(1,337,240,512) |
(10,359,005) |
(1,337,858,380) |
Total equity |
(10,283,252) |
(531,726,470) |
(10,279,005) |
(531,723,900) |
|
|
|
|
|
Current liabilities |
|
|
|
|
Borrowings |
9,568,434 |
465,078,396 |
9,568,434 |
465,078,396 |
Trade payables |
178,851 |
2,219,681 |
158,542 |
2,219,681 |
Other payables |
1,202,828 |
68,519,627 |
1,202,828 |
68,519,627 |
|
10,950,113 |
535,817,704 |
10,929,804 |
535,817,704 |
|
|
|
|
|
Total liabilities |
10,950,113 |
535,817,704 |
10,929,804 |
535,817,704 |
|
|
|
|
|
TOTAL EQUITY AND
LIABILITIES |
666,862 |
4,091,234 |
650,799 |
4,093,804 |
INCOME STATEMENT |
Group,
IFRS |
Parent
Company, FAS |
|
Unaudited |
Unaudited |
(All amounts in EUR) |
Year ended
31 Dec 17 |
Year ended
31 Dec 16 |
Year ended
31 Dec 17 |
Year ended
31 Dec 16 |
|
|
|
|
|
Other operating income |
33,136 |
14,026,894 |
1,053,561 |
14,026,894 |
|
|
|
|
|
Materials and services |
- |
(180,219) |
- |
(180,219) |
Personnel expenses |
(1,896,472) |
(2,435,356) |
(1,896,472) |
(2,435,356) |
Depreciation and amortisation |
(5,136) |
(302,017) |
(5,136) |
(302,017) |
Impairment charges on intangible assets |
- |
(121,272) |
- |
(121,272) |
Other operating expenses |
(1,661,699) |
202,779,457 |
(1,400,067) |
202,782,027 |
|
|
|
|
|
Operating profit/loss |
(3,530,170) |
213,767,487 |
(2,248,113) |
213,770,057 |
|
|
|
|
|
Finance income |
525,275,972 |
17,069 |
289,515,862 |
17,069 |
Finance cost |
(2,683,995) |
(15,258,326) |
(3,963,990) |
(15,258,326) |
Finance cost (net) |
522,591,978 |
(15,241,257) |
285,551,872 |
(15,241,257) |
|
|
|
|
|
Profit before taxes |
519,061,807 |
198,526,229 |
283,303,758 |
198,528,799 |
|
|
|
|
|
Income tax |
- |
- |
- |
- |
|
|
|
|
|
PROFIT FOR THE FINANCIAL
PERIOD |
519,061,807 |
198,526,229 |
283,303,758 |
198,528,799 |
|
|
|
|
|
Profit/Loss attributable to the
owners of the Company |
|
|
|
|
|
1.1.-31.12
2017 |
1.1.-31.12
2016 |
1.1.-31.12
2017 |
1.1.-31.12
2016 |
Diluted and undiluted |
0.12 |
0.09 |
0.07 |
0.09 |
CONSOLIDATED CASH FLOW STATEMENT |
|
|
|
|
|
Group, IFRS |
Parent Company, FAS |
|
Unaudited |
Unaudited |
(all
amounts in EUR) |
Year ended
31 Dec 17 |
Year ended
31 Dec 16 |
Year ended
31 Dec 17 |
Year ended
31 Dec 16 |
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Profit
for the period |
519,061,807 |
198,526,229 |
283,303,758 |
198,528,799 |
Adjustments for |
|
|
|
|
Depreciation and amortisation |
5,136 |
302,017 |
5,136 |
302,017 |
Other
non-cash income and expenses |
(525,186,989) |
(216,944,740) |
(288,212,751) |
(216,948,106) |
Impairment charges on intangible assets |
- |
121,272 |
- |
121,272 |
Interest income |
(14,342) |
(17,069) |
(13,956) |
(17,069) |
Interest expenses |
2,609,353 |
15,258,326 |
2,609,348 |
15,258,326 |
Cash flow before change in working
capital |
(3,525,035) |
(2,753,965) |
(2,308,465) |
(2,754,761) |
|
|
|
|
|
Change
in working capital |
|
|
|
|
Decrease(+)/increase(-) in trade and other receivables |
225,191 |
(42,084) |
225,191 |
(42,084) |
Decrease(-)/increase(+) in trade and other payables |
(36,430) |
614,521 |
(36,430) |
614,521 |
Change
in working capital |
188,760 |
572,436 |
188,760 |
572,436 |
|
|
|
|
|
Net cash used in operating activities before
financing activities and taxes |
(3,336,274) |
(2,181,528) |
(2,119,704) |
(2,182,324) |
|
|
|
|
|
Interest and other finance cost paid |
(5,943) |
(119,489) |
(5,938) |
(119,489) |
Interest and other finance income |
5,709 |
17,069 |
5,709 |
17,069 |
Net cash generated (used) in operating
activities |
(3,336,508) |
(2,283,949) |
(2,119,934) |
(2,284,745) |
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Acquisition of subsidiary, net of cash acquired |
- |
(2,000) |
(1,280,000) |
(12,000) |
Proceeds from sale of property, plant and equipment |
- |
1,400,000 |
- |
1,400,000 |
Investments in associated companies |
- |
- |
(74,641) |
- |
Net cash generated (used) in investing
activities |
0 |
1,398,000 |
(1,354,641) |
1,388,000 |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Net cash generated from financing
activities |
0 |
0 |
0 |
0 |
|
|
|
|
|
Net (decrease)/increase in cash and bank
overdrafts |
(3,336,508) |
(885,949) |
(3,474,575) |
(896,745) |
|
|
|
|
|
Cash
and bank overdrafts at beginning of the year |
3,776,623 |
4,662,572 |
3,765,827 |
4,662,572 |
Cash and bank overdrafts at end of the
period |
440,115 |
3,776,623 |
291,252 |
3,765,827 |
STATEMENT OF
CHANGES IN EQUITY |
|
|
|
Group,
IFRS |
|
Unaudited |
EUR |
Share
capital |
Share
premium |
Other
reserves |
Retained
deficit |
Total |
1 January 2016 |
80,000 |
8,085,842 |
797,348,200 |
(1,535,766,741) |
(730,252,700) |
Profit for the period |
- |
- |
- |
198,526,229 |
198,526,229 |
1 January 2017 |
80,000 |
8,085,842 |
797,348,200 |
(1,337,240,512) |
(531,726,471) |
Conversion of restructuring loans |
- |
- |
2,381,411 |
- |
2,381,411 |
Reduction of reserves for share premium and
invested unrestricted equity |
- |
(8,085,842) |
(799,729,611) |
807,815,453 |
0 |
Profit for the period |
- |
- |
- |
519,061,807 |
519,061,807 |
31 December 2017 |
80,000 |
- |
0 |
(10,363,252) |
(10,283,252) |
1 % of the subscription price of new shares has
been entered to the reserve for invested unrestricted equity of the
Group (IFRIC 19).
|
|
|
Parent
Company, FAS |
|
|
|
|
Unaudited |
|
EUR |
Share
capital |
Share
premium |
Other
reserves |
Retained
deficit |
Total |
1 January 2016 |
80,000 |
8,085,842 |
797,968,638 |
(1,536,387,179) |
(730,252,700) |
Profit for the period |
- |
- |
- |
198,528,799 |
198,528,799 |
1 January 2017 |
80,000 |
8,085,842 |
797,968,638 |
(1,337,858,380) |
(531,723,900) |
Conversion of restructuring loans |
- |
- |
238,141,137 |
- |
238,141,137 |
Reduction of reserves for share premium and
invested unrestricted equity |
- |
(8,085,842) |
(1,036,109,774) |
1,044,195,616 |
0 |
Profit for the period |
- |
- |
- |
283,303,758 |
283,303,758 |
31 December 2017 |
80,000 |
- |
0 |
(10,359,005) |
(10,279,005) |
|
|
|
|
|
|
The subscription price of new
shares has been entered to the reserve for invested unrestricted
equity of the Parent Company outright.
On 23 November 2017 the
extraordinary general meeting resolved to reduce the reserve for
invested unrestricted equity pursuant to the balance sheet of the
Company per 30 June 2017, EUR 1,036,109,774, in its entirety. The
reserve for invested unrestricted equity was EUR 0 after the
reduction and the reserve for invested unrestricted equity was
dissolved. The extraordinary general meeting resolved further to
reduce the share premium reserve pursuant to the balance sheet of
the Company per 30 June 2017, EUR 8,085,842, in its entirety. The
share premium reserve was EUR 0 after the reduction and the share
premium reserve was dissolved. Both reserves were used fully to
cover the accumulated losses of the Company.
NOTES
1. Basis of presentation and
non-going concern
These consolidated Financial Statements of Ahtium are prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union taking into account the corporate
reorganisation proceedings that commenced in respect of the Company
on 29 November 2013 and was completed on 2 June 2017. In addition,
the Group has taken into account IAS 1.25 and IAS 1.26 requirements
regarding the disclosure under the non-going concern basis. The
Group's Financial Statements for the period ended 31 December 2017
have not been prepared on a going concern basis. The basis of
preparation is that operations may end in near future.
The chosen reporting basis results
from the existence of material uncertainty that casts significant
doubt upon the Group's ability to realise its assets and discharge
its liabilities in the normal course of business and from the lack
of visibility on the Group's operational environment twelve months
beyond the date of reporting. The requisite adjustments resulting
from the chosen reporting basis have, where applicable, been made
to the carrying amounts of the Group's assets and liabilities, but
no reserve has been made in the Group's balance sheet for the costs
relating to winding down of the operations.
Ahtium's ability to revise its
reporting basis and to regain its status as a going concern is
dependent, among other things, on Ahtium's success in securing the
necessary funding and/or cash flow for the Company to discharge all
of its liabilities and to continue the Group's viable business.
As of the date of the Group's
Financial Statements 28 February 2018, there is no certainty as to
whether the Company can fulfill all the set requirements within the
given time frame.
2. Property, plant and
equipment |
|
|
|
|
|
Group,
IFRS
Unaudited |
|
(All amounts in EUR) |
Buildings |
Machinery
and
equipment |
Total |
|
|
|
|
Gross carrying amount at 1 Jan 2016 |
11,899,045 |
20,100,975 |
32,000,020 |
Deductions |
(11,899,045) |
(20,060,775) |
(31,959,820) |
Gross carrying amount at 31 Dec 2016 |
0 |
40,200 |
40,200 |
|
|
|
|
Accumulated depreciation and impairment losses |
|
|
|
at 1 Jan 2016 |
11,899,045 |
15,408,193 |
27,307,238 |
Depreciation for the period |
- |
301,096 |
301,096 |
Deductions |
(11,899,045) |
(15,687,988) |
(27,587,033) |
Accumulated depreciation and impairment losses |
|
|
|
at 31 Dec 2016 |
0 |
21,301 |
21,301 |
|
|
|
|
Carrying amount at 1 Jan 2016 |
0 |
4,692,782 |
4,692,782 |
Carrying amount at 31 Dec
2016 |
0 |
18,899 |
18,899 |
|
|
|
|
Gross carrying amount at 1 Jan 2017 |
0 |
40,200 |
40,200 |
Gross carrying amount at 31 Dec 2017 |
0 |
40,200 |
40,200 |
|
|
|
|
Accumulated depreciation and impairment losses |
|
|
|
at 1 Jan 2017 |
0 |
21,301 |
21,301 |
Depreciation for the period |
- |
5,136 |
5,136 |
Accumulated depreciation and impairment losses |
|
|
|
at 31 Dec 2017 |
0 |
26,437 |
26,437 |
|
|
|
|
Carrying amount at 1 Jan 2017 |
0 |
18,899 |
18,899 |
Carrying amount at 31 Dec
2017 |
0 |
13,763 |
13,763 |
|
Parent
Company FAS |
|
Unaudited |
(All amounts in EUR) |
Buildings |
Machinery
and
equipment |
Total |
|
|
|
|
Gross carrying amount at 1 Jan 2016 |
11,899,045 |
20,100,975 |
32,000,020 |
Deductions |
(11,899,045) |
(20,060,775) |
(31,959,820) |
Gross carrying amount at 31 Dec 2016 |
0 |
40,200 |
40,200 |
|
|
|
|
Accumulated depreciation and impairment losses |
|
|
|
at 1 Jan 2016 |
11,899,045 |
15,408,193 |
27,307,238 |
Depreciation for the period |
- |
301,096 |
301,096 |
Deductions |
(11,899,045) |
(15,687,988) |
(27,587,033) |
Accumulated depreciation and impairment losses |
|
|
|
at 31 Dec 2016 |
0 |
21,301 |
21,301 |
|
|
|
|
Carrying amount at 1 Jan 2016 |
0 |
4,692,782 |
4,692,782 |
Carrying amount at 31 Dec
2016 |
0 |
18,899 |
18,899 |
|
|
|
|
Gross carrying amount at 1 Jan 2017 |
0 |
40,200 |
40,200 |
Gross carrying amount at 31 Dec 2017 |
0 |
40,200 |
40,200 |
|
|
|
|
Accumulated depreciation and impairment losses |
|
|
|
at 1 Jan 2017 |
0 |
21,301 |
21,301 |
Depreciation for the period |
- |
5,136 |
5,136 |
Accumulated depreciation and impairment losses |
|
|
|
at 31 Dec 2017 |
0 |
26,437 |
26,437 |
|
|
|
|
Carrying amount at 1 Jan 2017 |
0 |
18,899 |
18,899 |
Carrying amount at 31 Dec
2017 |
0 |
13,763 |
13,763 |
3. Borrowings and capital
loans |
|
|
|
|
|
Group, IFRS |
Parent
Company FAS |
|
Unaudited |
Unaudited |
EUR |
Year ended
31 Dec 17 |
Year ended
31 Dec 16 |
Year ended
31 Dec 17 |
Year ended
31 Dec 16 |
|
|
|
|
|
Restructuring loan capital |
6,130,578 |
427,500,000 |
6,130,578 |
427,500,000 |
Restructuring loan interest |
40,259 |
16,510,880 |
40,259 |
16,510,880 |
Accrued interest on restructuring loans after
commencement of restructuring proceedings |
- |
12,822,068 |
- |
12,822,068 |
Other borrowings during procedure |
3,397,597 |
8,245,447 |
3,397,597 |
8,245,447 |
|
9,568,434 |
465,078,395 |
9,568,434 |
465,078,395 |
The Parent Company has
reclassified all of its borrowings as current and any unamortised
transaction costs have been expensed to the income statement in
previous periods in connection with the reclassification accreting
the loan carrying amounts to the nominal value. The fair value of
the restructuring debt can not be assessed, as the Parent Company
does not currently have a credit rating or proper access to debt
financing.
Restructuring loan
capital
The restructuring loan capital includes the remaining indebtedness
of the Parent Company, as adjusted in accordance with the Parent
Company's debt restructuring programme confirmed on 2 June 2017,
and consists of: Revolving Credit Facility (EUR 4.8 million), the
guarantee liability granted to Finnvera (EUR 0.5 million), the
senior unsecured convertible bonds due in 2015 (EUR 0.5 million)
and the senior unsecured bonds due in 2017 (EUR 0.35 million). Of
the restructuring loan capital, EUR 4.1 million is secured in
accordance with the draft restructuring programme and EUR 2.0
million is unsecured. The restructuring loan capital shall fall due
for payment on 2 June 2019, at the latest. In case the Parent
Company is unable to repay its restructuring debts by the due date
of 2 June 2019, this may result in bankruptcy of the Parent
Company, in which case its liabilities related to the restructuring
loan capital shall be determined in accordance with section 66 of
the Finnish Restructuring of Enterprises Act (47/1993, as
amended).
Pursuant to the debt restructuring
programme, the holders of unsecured debt were given the right to
convert their receivable to new shares in the Parent Company at the
conversion rate of EUR 0.1144 per share. To the extent the
unsecured creditors did not use their conversion right, the
remaining unsecured debt was cut by 99 percent.
Restructuring loan
interest
Restructuring loan interests are unsecured debts and payable to the
holders of the restructuring debt in accordance with the Parent
Company's debt restructuring programme. The restructuring loan
interest shall fall due for payment on 2 June 2019, at the
latest.
In case the Parent Company is
unable to repay its restructuring debts by the due date of 2 June
2019, this may result in bankruptcy of the Parent Company, in which
case its liabilities related to the restructuring loan interest
shall be determined in accordance with section 66 of the Finnish
Restructuring of Enterprises Act.
Interest accumulated since the
beginning of the restructuring proceedings
In addition to the Parent
Company's restructuring debts and other liabilities to be
considered, the Parent Company's borrowings included EUR 13.0
million and trade and other payables included EUR 61 million of
accumulated interest, which would have falled due only in case the
draft restructuring programme was not confirmed. The Parent
Company accrued the interest on the balance sheet for all
restructuring debt based on the original loan terms, despite the
fact that the accumulation of interest payment obligation on
unsecured restructuring debt ceased when the restructuring
proceedings were started. Upon the confirmation of the Parent
Company's debt restructuring programme on 2 June 2017, it was
verified that the accumulation of interest ceased at the time the
restructuring proceedings were started, and a corresponding
reversal was booked in the Parent Company's finance
income.
In case the Parent Company is
unable to repay its restructuring debts by the due date of 2 June
2019, this may result in bankruptcy of the Parent Company, in which
case its liabilities related to the reversed interest liability
shall be determined in accordance with section 66 of the Finnish
Restructuring of Enterprises Act.
Other short-term
borrowings
The other short-term borrowings consist entirely of the third-party
security granted to Finnvera, as adjusted in accordance with the
Parent Company's debt restructuring programme confirmed on 2 June
2017 (EUR 3.4 million). The amount is part of the Parent Company's
secured debts.
In case the Parent Company is
unable to repay its restructuring debts by the due date of 2 June
2019, this may result in bankruptcy of the Parent Company, in which
case its liabilities related to the third-party security granted to
Finnvera shall be determined in accordance with section 66 of the
Finnish Restructuring of Enterprises Act.
4. Income
tax
The Company has tax losses of EUR
86 million for which it has not recognised deferred tax assets.
These tax losses expire between years 2019 and 2026
5. Contingencies and
commitments |
|
|
The future aggregate
minimum lease payments under non-cancellable operating leases |
Group |
|
|
Unaudited |
|
|
EUR |
31 Dec 17 |
31 Dec 16 |
No
later than 1 year |
135,700 |
75,590 |
Later than 1 year and not later than 5 years |
206,360 |
24,908 |
|
342,060 |
100,498 |
|
|
|
Parent Company |
|
|
Unaudited |
|
|
EUR |
31 Dec 17 |
31 Dec 16 |
No
later than 1 year |
130,558 |
75,590 |
Later than 1 year and not later than 5 years |
201,698 |
24,908 |
|
332,256 |
100,498 |
Securities given by the
Parent Company under the
Multicurrency Revolving Facility Agreement and the Finnvera
Financing Agreements
The securities given under the Multicurrency
Revolving Facility Agreement (secured part EUR 4.1 million) and the
Finnvera Financing Agreements (liability related to a third-party
security of EUR 3.4 million) include:
· Pledge
of all shares owned by the Parent Company in Talvivaara Sotkamo
· Pledge
of intra-group receivables of the Parent Company from Talvivaara
Sotkamo
· Pledge
of insurance receivables
In addition, the Parent Company has guaranteed the
obligations of Talvivaara Sotkamo under the Finnvera Promissary
Note in the adjusted amount of EUR 0.5 million by a specific Surety
Obligation.
Ahtium
Plc |
|
|
|
Key financial figures |
|
Group,
IFRS |
Parent
Company, FAS |
|
|
Unaudited |
Unaudited |
|
|
Twelve
months to
31 Dec 17 |
Twelve
months to
31 Dec 16 |
Twelve
months to
31 Dec 17 |
Twelve
months to
31 Dec 16 |
Other operating income |
EUR '000 |
33 |
14,027 |
1,054 |
14,027 |
Operating profit/loss |
EUR '000 |
(3,530) |
213,767 |
(2,248) |
213,770 |
Operating profit/loss percentage |
|
(10,653.6 %) |
1,524.0 % |
(213.4 %) |
1,524.0 % |
Profit/loss before tax |
EUR '000 |
519,062 |
198,526 |
283,304 |
198,529 |
Profit/loss for the period |
EUR '000 |
519,062 |
198,526 |
283,304 |
198,529 |
Return on equity |
|
n/a |
n/a |
n/a |
n/a |
Equity-to-assets ratio |
|
(1,542.0 %) |
(12,996.7 %) |
(1,579.4 %) |
(12,988.5 %) |
Net interest-bearing debt |
EUR '000 |
9,128 |
461,302 |
9,277 |
461,313 |
Debt-to-equity ratio |
|
(88.8 %) |
(86.8 %) |
(90.3 %) |
(86.8 %) |
Return on investment |
|
n/a |
n/a |
n/a |
n/a |
Capital expenditure |
EUR '000 |
- |
- |
- |
- |
Property, plant and equipment |
EUR '000 |
14 |
19 |
14 |
19 |
Borrowings |
EUR '000 |
9,568 |
465,078 |
9,568 |
465,078 |
Cash and cash equivalents |
EUR '000 |
440 |
3,777 |
291 |
3,766 |
Share-related key figures |
|
|
|
Unaudited |
Unaudited |
Twelve
months to
31 Dec 17 |
Twelve
months to
31 Dec 16 |
Earnings per share |
EUR |
0.12 |
0.09 |
Equity per share |
EUR |
(0.00) |
(0.25) |
Employee-related key
figures |
|
|
|
|
|
Unaudited |
Unaudited |
|
|
Twelve
months to
31 Dec 17 |
Twelve
months to
31 Dec 16 |
Salaries |
EUR '000 |
1,594 |
2,080 |
Average number of employees |
|
20 |
25 |
Number of employees at the end of the year |
|
19 |
20 |
Key financial figures of the
Group |
|
|
Return on equity |
Profit for
the period |
|
(Total equity at the beginning of period + Total equity at the end
of period)/2 |
|
|
Equity-to-assets ratio |
Total
equity |
|
Total assets |
|
|
Net
interest-bearing debt |
Interest-bearing debt - Cash and cash equivalent |
|
|
Debt-to-equity ratio |
Net
interest-bearing debt |
|
Total equity |
|
|
Return on investment |
Profit for
the period + Finance cost |
|
(Total equity at the beginning of period + Total equity at the end
of period)/2 +
(Borrowings at the beginning of period + Borrowings at the end of
period)/2 |
Share-related key figures |
|
|
|
Earnings per share |
Profit attributable to equity holders of the
Company |
|
Adjusted average number of shares |
|
|
Equity per share |
Equity attributable to equity holders of the Company |
|
Adjusted average number of shares |
Annual Results Release
2017
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ahtium Oyj via Globenewswire
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