NOT TO BE PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE, SOUTH AFRICA, THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
Efore Plc to publish working capital statement and pro forma information on the acquisition of Powernet International Oy in the prospectus relating to the rights offering
Efore Plc (‘Efore’ or the ‘Company’) announced today that the Finnish Financial Supervisory Authority has approved the Company’s Finnish language prospectus (the ‘Prospectus’) relating to the rights offering of approximately EUR 11 million announced by the Company today (the ‘Offering’).
In this release, the Company is publishing a previously unpublished working capital statement and previously unpublished pro forma information on the acquisition of Powernet International Oy.
Working Capital Statement
As at the date of the Offering Circular, the Company does not have sufficient working capital to finance its operations for the next 12 months. The Company’s management estimates that the Company’s working capital is sufficient until the end of December 2018.
The Company has agreed with its main financier bank on a reorganisation of its loans, conditional on the implementation of the Offering. A new payment programme for the next five years has been negotiated for the amortisations of the EUR 6.0 million in loans from the main financier bank maturing on 31 December 2018. The loan agreements signed with the main financier include the following covenants: (i) equity ratio, (ii) net debt/12 months rolling adjusted EBITDA, and (iii) adjusted EBITDA in euros. The covenants concerning the equity ratio and the adjusted EBITDA in euros were breached at the end of the 2017 financial year, but in February 2018, the Company received a waiver from the main financier bank to deviate from the loan covenants. Efore has agreed with the Company’s main financier bank that the next measurement point for covenants will be 31 December 2018. The main financier bank has announced that it is prepared to grant a waiver if the covenants are not met in the measurement of 31 December 2018. The reorganisation of the loans is conditional upon the completion of the Offering.
Certain shareholders of the Company have undertaken with respect to short-term financing of EUR 4.4 million to use the capital and interest of this loan amount as at 31 December 2018, i.e. EUR 4.6 million, to subscribe for Offer Shares in the Share Issue. The loan in question matures on 31 December 2018.
The Italian subsidiary has a EUR 2.0 million loan with covenants concerning net debt/EBITDA and net debt/net equity covenants with the next measurement point being on 31 December 2018. The Company’s management believes that, if these covenants are not met on 31 December 2018, it will be possible to negotiate the continued terms of the loan with the lender bank in a manner acceptable to the Company.
On 21 November 2018, the Company signed an agreement to acquire Powernet. The purchase price on a cash and debt free basis (enterprise value) is EUR 4.5 million and the purchase price for the shares at closing of the transaction is EUR 2.5 million. The Company intends to finance the acquisition of Powernet using the proceeds from the Offering. The acquisition of Powernet is conditional on the adequate implementation of the Share Issue in accordance with its terms in such a way that the Company raises at lease EUR 8 million in proceeds through the Share Issue or succeeds in obtaining other financing for the payment of the purchase price.
The Company is carrying out the Offering, among other things, to secure sufficient working capital. The acquisition of Powernet is conditional on the adequate implementation of the Share Issue in accordance with its terms in such a way that the Company raises at lease EUR 8 million in gross proceeds through the Share Issue or succeeds in obtaining other financing for the payment of the purchase price. For this reason, the Company’s management estimates that there are two alternatives that must be taken into consideration. If the Company succeeds in raising over EUR 8 million through the Offering and, thus, fulfils the conditions for the acquisition of Powernet, the management estimates that the Company would need approximately EUR 8 million of the Offering, corresponding to approximately EUR 267 million Offer Shares, together with cash flow from operations, in order to cover the acquisition of Powernet and the working capital needs for the next 12 months. If the Company does not succeed in raising EUR 8 million through the Offering and, thus, is not obligated to complete the acquisition of Powernet, the management estimates that the Company would need approximately EUR 5.3 million, corresponding to approximately 177 million Offer Shares, together with cash flow from operations to cover the working capital needs for the next 12 months.
Pro forma information on the acquisition of Powernet International Oy included in the Prospectus
The Prospectus includes previously unpublished pro forma figures on the acquisition of Powernet Oy. The pro forma figures are published as an appendix to this stock exchange release. The Prospectus includes a report by the Company’s auditor concerning the pro forma information.
Helsinki, Wednesday 28. November 2018
Efore Plc
Board of Directors
Further information:
CEO Jorma Wiitakorpi, Efore Plc, tel. 040 175 8510
CFO Vesa Leino, Efore Plc, tel. +358 40 759 8956
Distribution:
Nasdaq Helsinki
Principal media
DISCLAIMERS
The information contained in this document is not for publication or distribution, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, Singapore, South Africa or the United States. The issue, subscription and sale of securities in the initial public offering are subject to specific legal or regulatory restrictions in certain jurisdictions. The Company assumes no responsibility in the event there is a violation by any person of such restrictions.
The information contained in this document shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus published by the Company.
This document is not an offer for the sale of securities in the United States, and the securities referred to herein cannot be offered or sold in the United States, unless they have been registered or are exempt from registration in accordance with the US Securities Act of 1933 (as amended) and the regulations and orders issued thereunder. There is no intention to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.
The Company has not authorised any offer to the public of securities in any Member State of the European Economic Area other than Finland. With respect to each Member State of the European Economic Area other than Finland and which has implemented the Prospectus Directive (each, a ‘Relevant Member State’), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; or (b) in any other circumstances falling within Article 3(2) of the Prospectus Directive. In this paragraph, the expression ‘offer securities to the public’ means communication by any means presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to use, purchase or subscribe to these securities, as the expression may vary due to the implementation measures taken in the Member State. The expression ‘Prospectus Directive’ refers to Directive 2003/71/EC (as amended, including the 2010 Amending Directive, to the extent that it has been implemented in the Relevant Member State), and it includes all relevant implementation measures in the Relevant Member State, and the expression ‘2010 Amending Directive’ refers to Directive 2010/73/EC.
The information contained herein shall not constitute a public offering of shares in the United Kingdom. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the ‘Order’) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as ‘relevant persons’). Any investment activity to which this document relates will be only available to, and will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
The information contained in this document is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness. The information in this document is subject to change.
This document contains certain forward-looking statements. These forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to these uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this document. The Company disclaims any obligation to update any forward-looking statements contained in this document, except as required pursuant to applicable law.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
BASIS OF PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma information below (‘pro forma’, ‘pro forma financial information’) has been presented on the acquisition of Powernet International Oy (‘Powernet’), giving effect to the acquisition as if it had been completed:
- for the unaudited pro forma statement of comprehensive income as at 1 January 2018, and
- for the unaudited pro forma balance sheet as at 30 September 2018.
This unaudited pro forma financial information has been presented for illustrative purposes only. Because of its nature, it addresses a hypothetical situation to reflect the operating result of the Group, had the acquisition been completed as at 1 January 2018, and to reflect the balance sheet of the Group, had the acquisition been completed as at 30 September 2018. Efore intends to finance the Powernet acquisition using proceeds from the Offering and the impacts from the Offering are described in the pro forma information. The pro forma information also includes a description of the impact of the short-term financing arrangements of the Company in connection with the Offering. The pro forma information does not purport to represent Efore Group’s results of operations for any future period or balance sheet at any future date. The pro forma information does not reflect the effect of possible synergies associated with the acquisition.
The pro forma adjustments are based on the available information and the assumptions made by management of Efore Group. There are no assurances that the assumptions made in preparation of the unaudited pro forma information will subsequently prove accurate.
On 21 November 2018 the Company announced that it will acquire the entire share capital of Powernet International Oy. Control over the Powernet Group has not passed to Efore by the date of the Prospectus. The acquisition of Powernet is conditional upon Efore receiving sufficient proceeds from the Offering, based on its terms and conditions, so that the Company will raise at least EUR 8 million from the Offering or is able to raise financing for the payment of the consideration some other way.
The unaudited pro forma financial information presented in this section should be read in conjunction with the following documents:
- The consolidated financial statements of Efore Plc for the financial year ended 31 December 2017
- The supplemented half-year report of Efore Plc for the six-month period ended 30 June, and
- Financial information on Efore Plc for the interim period ended 30 September 2018
PRO FORMA PERIOD AND ACCOUNTING PRINCIPLES
The tables below present:
- the unaudited pro forma statement of comprehensive income for the interim period ended 30 September 2018 (nine-month period) and
- the unaudited pro forma balance sheet as at 30 September 2018.
The statement of comprehensive income has been prepared assuming the Powernet acquisition had been completed as at 1 January 2018.
The unaudited pro forma financial information has been prepared in accordance with the IFRSs as adopted by the EU and applied by Efore Plc in its consolidated IFRS financial statements. The FAS-based accounting principles (Finnish Accounting Standards) for the financial statements of Powernet Group have been adjusted to comply in all material respects with those IFRS-based accounting principles of Efore Group.
No deferred taxes have been recorded on the pro forma adjustments as their effect is not material.
SOURCES OF PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma information is based on financial data derived from the following sources:
- Unaudited financial information of Efore Plc for the interim period ended 30 September 2018.
- The unaudited consolidated balance sheet of Powernet International Oy as at 30 September 2018 and the consolidated income statement for the period 1 January–30 September 2018. The financial information of Powernet has been prepared in accordance with FAS. In the pro forma income statement and balance sheet the information is adjusted to IFRS as applied by Efore Group in all material respects to achieve comparability (refer to Note (C)).
UNAUDITED PRO FORMA STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD 1 JANUARY – 30 SEPTEMBER 2018
| MEUR | |
|---|---|
| Consolidated statement of comprehensive income of Efore Group | (IFRS) |
| Income statement of Powernet Group | (FAS) |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | (IFRS) |
| Consolidated statement of comprehensive income of Efore Group | (unaudited) |
| Income statement of Powernet Group | (unaudited) |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | (unaudited) |
| Notes | |
| Consolidated statement of comprehensive income of Efore Group | (A) |
| Income statement of Powernet Group | (B) |
| Differences in accounting policies | (C) |
| Purchase price allocation: allocations to identifiable assets and liabilities | (D) |
| Purchase price allocation: other adjustments | (E) |
| Offering | (F) |
| Financing arrangements | (G) |
| Pro forma statement of comprehensive income | |
| Consolidated statement of comprehensive income of Efore Group | |
| Income statement of Powernet Group | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | |
| Consolidated statement of comprehensive income of Efore Group | |
| Income statement of Powernet Group | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | |
| Net sales | |
| Consolidated statement of comprehensive income of Efore Group | 37,7 |
| Income statement of Powernet Group | 6,8 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | 44,6 |
| Change in inventories of finished goods and work in progress | |
| Consolidated statement of comprehensive income of Efore Group | -0,5 |
| Income statement of Powernet Group | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | -0,1 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | -0,6 |
| Work performed for own purposes and capitalised | |
| Consolidated statement of comprehensive income of Efore Group | 0,1 |
| Income statement of Powernet Group | 0,3 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | 0,4 |
| Other operating income | |
| Consolidated statement of comprehensive income of Efore Group | 0,1 |
| Income statement of Powernet Group | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | 0,1 |
| Materials and services | |
| Consolidated statement of comprehensive income of Efore Group | -25,8 |
| Income statement of Powernet Group | -4,3 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | -30,1 |
| Employee benefits expenses | |
| Consolidated statement of comprehensive income of Efore Group | -8,0 |
| Income statement of Powernet Group | -1,5 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | -9,5 |
| Depreciation | |
| Consolidated statement of comprehensive income of Efore Group | -2,6 |
| Income statement of Powernet Group | -0,7 |
| Differences in accounting policies | 0,3 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | -2,9 |
| Impairment | |
| Consolidated statement of comprehensive income of Efore Group | -0,7 |
| Income statement of Powernet Group | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | -0,7 |
| Other operating expenses | |
| Consolidated statement of comprehensive income of Efore Group | -5,3 |
| Income statement of Powernet Group | -1,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | -0,3 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | -6,6 |
| Operating profit/loss | |
| Consolidated statement of comprehensive income of Efore Group | -4,8 |
| Income statement of Powernet Group | -0,4 |
| Differences in accounting policies | 0,3 |
| Purchase price allocation: allocations to identifiable assets and liabilities | -0,4 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | -5,2 |
| Financing income | |
| Consolidated statement of comprehensive income of Efore Group | 1,3 |
| Income statement of Powernet Group | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | 1,3 |
| Financing expenses | |
| Consolidated statement of comprehensive income of Efore Group | -2,1 |
| Income statement of Powernet Group | -0,1 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,1 |
| Pro forma statement of comprehensive income | -2,1 |
| Result before tax | |
| Consolidated statement of comprehensive income of Efore Group | -5,6 |
| Income statement of Powernet Group | -0,5 |
| Differences in accounting policies | 0,3 |
| Purchase price allocation: allocations to identifiable assets and liabilities | -0,4 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,1 |
| Pro forma statement of comprehensive income | -6,0 |
| Tax on income from operations | |
| Consolidated statement of comprehensive income of Efore Group | 0,3 |
| Income statement of Powernet Group | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma statement of comprehensive income | 0,3 |
| Result for the period | |
| Consolidated statement of comprehensive income of Efore Group | -5,3 |
| Income statement of Powernet Group | -0,5 |
| Differences in accounting policies | 0,3 |
| Purchase price allocation: allocations to identifiable assets and liabilities | -0,4 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,1 |
| Pro forma statement of comprehensive income | -5,7 |
| Consolidated statement of comprehensive income of Efore Group | |
| Income statement of Powernet Group | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | |
| Other comprehensive income | |
| Consolidated statement of comprehensive income of Efore Group | |
| Income statement of Powernet Group | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | |
| Consolidated statement of comprehensive income of Efore Group | |
| Income statement of Powernet Group | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | |
| Items that will not be reclassified to statement of income | |
| Consolidated statement of comprehensive income of Efore Group | |
| Income statement of Powernet Group | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | |
| Remeasurements of the net defined benefit liabilty | |
| Consolidated statement of comprehensive income of Efore Group | 0,0 |
| Income statement of Powernet Group | – |
| Differences in accounting policies | – |
| Purchase price allocation: allocations to identifiable assets and liabilities | – |
| Purchase price allocation: other adjustments | – |
| Offering | – |
| Financing arrangements | – |
| Pro forma statement of comprehensive income | 0,0 |
| Items that may be reclassified subsequently to profit or loss | |
| Consolidated statement of comprehensive income of Efore Group | |
| Income statement of Powernet Group | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma statement of comprehensive income | |
| Translation differences | |
| Consolidated statement of comprehensive income of Efore Group | -0,1 |
| Income statement of Powernet Group | – |
| Differences in accounting policies | – |
| Purchase price allocation: allocations to identifiable assets and liabilities | – |
| Purchase price allocation: other adjustments | – |
| Offering | – |
| Financing arrangements | – |
| Pro forma statement of comprehensive income | -0,1 |
| Total comprehensive income | |
| Consolidated statement of comprehensive income of Efore Group | -5,4 |
| Income statement of Powernet Group | -0,5 |
| Differences in accounting policies | 0,3 |
| Purchase price allocation: allocations to identifiable assets and liabilities | -0,4 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,1 |
| Pro forma statement of comprehensive income | -5,8 |
UNAUDITED PRO FORMA BALANCE SHEET AS AT 30 SEPTEMBER 2018
| MEUR | |
|---|---|
| Consolidated balance sheet of Efore Group 30.9.2018 | (IFRS) |
| Balance sheet of Powernet Group 30.9.2018 | (FAS) |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | (IFRS) |
| Consolidated balance sheet of Efore Group 30.9.2018 | (unaudited) |
| Balance sheet of Powernet Group 30.9.2018 | (unaudited) |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | (unaudited) |
| Notes | |
| Consolidated balance sheet of Efore Group 30.9.2018 | (A) |
| Balance sheet of Powernet Group 30.9.2018 | (B) |
| Differences in accounting policies | (C) |
| Purchase price allocation: allocations to identifiable assets and liabilities | (D) |
| Purchase price allocation: other adjustments | (E) |
| Offering | (F) |
| Financing arrangements | (G) |
| Pro forma balance sheet | |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| ASSETS | |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| NON-CURRENT ASSETS | |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| Intangible assets | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 9,9 |
| Balance sheet of Powernet Group 30.9.2018 | 0,9 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 10,7 |
| Goodwill | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 1,1 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 3,9 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 5,0 |
| Tangible assets | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 2,9 |
| Balance sheet of Powernet Group 30.9.2018 | 0,2 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 3,1 |
| Other receivables, non-current | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,1 |
| Balance sheet of Powernet Group 30.9.2018 | 0,2 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,3 |
| Other long-term investments | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,1 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,1 |
| Deferred tax asset | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 3,2 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 3,2 |
| Total non-current assets | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 17,3 |
| Balance sheet of Powernet Group 30.9.2018 | 1,3 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 3,9 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 22,5 |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| CURRENT ASSETS | |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| Inventories | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 8,6 |
| Balance sheet of Powernet Group 30.9.2018 | 0,5 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,1 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 9,2 |
| Trade receivables and other receivables | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 8,0 |
| Balance sheet of Powernet Group 30.9.2018 | 1,5 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,4 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | -0,2 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 9,6 |
| Tax receivable, income tax | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,2 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,2 |
| Cash and cash equivalents | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 1,7 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | -2,5 |
| Offering | 10,5 |
| Financing arrangements | -5,3 |
| Pro forma balance sheet | 4,4 |
| Total current assets | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 18,5 |
| Balance sheet of Powernet Group 30.9.2018 | 2,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,4 |
| Purchase price allocation: other adjustments | -2,5 |
| Offering | 10,3 |
| Financing arrangements | -5,3 |
| Pro forma balance sheet | 23,4 |
| TOTAL ASSETS | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 35,8 |
| Balance sheet of Powernet Group 30.9.2018 | 3,3 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,4 |
| Purchase price allocation: other adjustments | 1,4 |
| Offering | 10,3 |
| Financing arrangements | -5,3 |
| Pro forma balance sheet | 45,9 |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| EQUITY AND LIABILITIES | |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| EQUITY | |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| Share capital | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 15,0 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 15,0 |
| Treasury shares | |
| Consolidated balance sheet of Efore Group 30.9.2018 | -2,4 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | -2,4 |
| Other reserves | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 28,7 |
| Balance sheet of Powernet Group 30.9.2018 | 7,6 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | -7,6 |
| Offering | 10,3 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 38,9 |
| Translation differences | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 3,3 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 3,3 |
| Retained earnings | |
| Consolidated balance sheet of Efore Group 30.9.2018 | -42,9 |
| Balance sheet of Powernet Group 30.9.2018 | -10,3 |
| Differences in accounting policies | 1,7 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,3 |
| Purchase price allocation: other adjustments | 8,3 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | -42,9 |
| Equity attributable to equity holders of the parent | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 1,6 |
| Balance sheet of Powernet Group 30.9.2018 | -2,7 |
| Differences in accounting policies | 1,7 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,3 |
| Purchase price allocation: other adjustments | 0,7 |
| Offering | 10,3 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 11,9 |
| Equity attributable to non-controlling interests | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,0 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,0 |
| Total equity | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 1,6 |
| Balance sheet of Powernet Group 30.9.2018 | -2,7 |
| Differences in accounting policies | 1,7 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,3 |
| Purchase price allocation: other adjustments | 0,7 |
| Offering | 10,3 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 11,9 |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| NON-CURRENT LIABILITIES | |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| Deferred tax liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,1 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,1 |
| Interest-bearing liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 1,7 |
| Balance sheet of Powernet Group 30.9.2018 | 2,4 |
| Differences in accounting policies | -1,7 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 2,3 |
| Other liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,0 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,7 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,7 |
| Pension provisions | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 1,3 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 1,3 |
| Provisions | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,3 |
| Balance sheet of Powernet Group 30.9.2018 | 0,3 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,1 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,6 |
| Total non-current liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 3,4 |
| Balance sheet of Powernet Group 30.9.2018 | 2,6 |
| Differences in accounting policies | -1,7 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,1 |
| Purchase price allocation: other adjustments | 0,7 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 5,1 |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| CURRENT LIABILITIES | |
| Consolidated balance sheet of Efore Group 30.9.2018 | |
| Balance sheet of Powernet Group 30.9.2018 | |
| Differences in accounting policies | |
| Purchase price allocation: allocations to identifiable assets and liabilities | |
| Purchase price allocation: other adjustments | |
| Offering | |
| Financing arrangements | |
| Pro forma balance sheet | |
| Interest-bearing liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 15,4 |
| Balance sheet of Powernet Group 30.9.2018 | 1,5 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | -5,2 |
| Pro forma balance sheet | 11,7 |
| Trade payables and other liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 15,0 |
| Balance sheet of Powernet Group 30.9.2018 | 1,8 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,1 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | -0,1 |
| Pro forma balance sheet | 16,8 |
| Tax liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,2 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,2 |
| Provisions | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 0,2 |
| Balance sheet of Powernet Group 30.9.2018 | 0,0 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,0 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | 0,0 |
| Pro forma balance sheet | 0,2 |
| Total current liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 30,8 |
| Balance sheet of Powernet Group 30.9.2018 | 3,3 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,1 |
| Purchase price allocation: other adjustments | 0,0 |
| Offering | 0,0 |
| Financing arrangements | -5,3 |
| Pro forma balance sheet | 28,9 |
| Liabilities | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 34,2 |
| Balance sheet of Powernet Group 30.9.2018 | 6,0 |
| Differences in accounting policies | -1,7 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,2 |
| Purchase price allocation: other adjustments | 0,7 |
| Offering | 0,0 |
| Financing arrangements | -5,3 |
| Pro forma balance sheet | 34,0 |
| TOTAL EQUITY AND LIABILITIES | |
| Consolidated balance sheet of Efore Group 30.9.2018 | 35,8 |
| Balance sheet of Powernet Group 30.9.2018 | 3,3 |
| Differences in accounting policies | 0,0 |
| Purchase price allocation: allocations to identifiable assets and liabilities | 0,4 |
| Purchase price allocation: other adjustments | 1,4 |
| Offering | 10,3 |
| Financing arrangements | -5,3 |
| Pro forma balance sheet | 45,9 |
PRO FORMA NOTES
(A) Consolidated statement of comprehensive income and balance sheet of Efore Group
This column reflects Efore Group’s unaudited IFRS consolidated statement of comprehensive income for the nine-month period ended 30 September 2018, and the unaudited IFRS consolidated balance sheet as at 30 September 2018. Efore’s financial year is the calendar year
(B) Income statement and balance sheet of Powernet Group
This column reflects Powernet Group’s unaudited FAS consolidated income statement for the nine-month period ended 30 September 2018, and the unaudited FAS consolidated balance sheet as at 30 September 2018. Powenet’s financial year is the calendar year.
(C) Differences in accounting policies
This column reflects the impact of accounting policy alignment of the FAS-based historical financial information of Powernet to comply with the IFRS accounting principles of Efore Group. In this column adjustments are made to arrive at comparable figures.
Consolidated statement of comprehensive income
The goodwill amortisation recognised by Powernet Group for the period ended 30 September 2018, totalling EUR 0.3 million, has been reversed as a pro forma adjustment. Under IFRS goodwill is not amortised.
Balance sheet
The subordinated loan of Powernet Group, amounting to EUR 1.75 million, has been reclassified from liabilities to equity as the loan meets the recognition criteria for an equity item under IFRS. Items included in intangible assets of Powernet Group, EUR 0.0 million, have been reclassified to tangible assets.
(D) Purchase price allocation: allocations to identifiable assets and liabilities
This column reflects the adjustments made based on the provisional purchase price allocation, i.e. allocations to identifiable assets and liabilities. The purchase price allocation is provisional, since the transaction has not yet been effected. The final purchase price allocation will be prepared based on the acquisition-date fair values of Powernet’s identifiable assets, liabilities and contingent liabilities when control over Powernet passes to Efore. The final purchase price allocation may differ from the provisional purchase price allocation below. A purchase price allocation is considered final after one year from the acquisition date at the latest.
Consolidated statement of comprehensive income
Inventories: The inventories measured at fair value are considered to be used over nine months. Consequently the adjustment to the item Change in inventories of finished goods and work in progress is negative EUR 0.1 million. The adjustment has a non-recurring impact on the Issuer.
Acquisition-related costs: IFRS 3 requires acquisition-related costs be recorded as expenses as they are incurred. The transaction costs related to the acquisition are in aggregate EUR 0.3 million and comprise both acquisition-related professional fees and the asset transfer tax. The said expenses are accounted for as if they had been incurred as at 1 January 2018. The adjustment has a non-recurring impact on the Issuer.
Balance sheet
Inventories: The preparation of the purchase price allocation has only been started. The Group has provisionally allocated part of the purchase price to the inventories of Powernet Group. The adjustment amounts to EUR 0.1 million. The adjustment has a non-recurring impact on the Issuer.
Other receivables and provisions: based on the Share Purchase Agreement, the seller may contractually indemnify against Efore against certain claims between Powernet and third parties that remained open by the date of the Prospectus. As a result, Efore obtains an indemnification asset that has been recorded as a pro forma adjustment, totaling EUR 0.4 million (increase). At the same time a pro forma adjustment of EUR 0.1 million has been made to provisions, resulting from the previously unrecognised obligations referred to above. The adjustments have a non-recurring impact on the Issuer.
Trade payables and other liabilities: the pro forma adjustment in question, EUR 0.1 million, arises from an obligation of Powernet to make payment for certain overtime pay. This liability incurred prior to the acquisition. The adjustment has a non-recurring impact on the Issuer.
(E) Purchase price allocation: other adjustments
This column reflects the other adjustments made based on the provisional purchase price allocation. The purchase price allocation is provisional, since the transaction has not yet been effected.
Balance sheet
The major identified adjustments to the pro forma balance sheet as at 30 September 2018 are as follows:
Goodwill: The preparation of the purchase price allocation has only been started. Therefore, currently the amount by which the consideration paid, EUR 2.5 million together with the estimated contingent consideration EUR 0.7 million, exceeds the fair value of the net assets acquired, negative EUR 0.7 million, is for the most part presented as goodwill, amounting to EUR 3.9 million. Efore Group has provisionally allocated part of the purchase price to the inventories of Powernet Group, refer to Note (D) above. The adjustment has a non-recurring impact on the Issuer.
It is probable that Efore Group may have to adjust the goodwill amount subsequently in completing said calculation, for example by allocating part of the amount to the intangible assets identified in the acquisition.
Cash and cash equivalents: the pro forma adjustment in question, EUR 2.5 million, reflects the impact resulting from the payment of the consideration and it is deducted from the item Cash and cash equivalents of the balance sheet. The adjustment has a non-recurring impact on the Issuer.
Equity: the negative IFRS equity of Powernet as at 30 September 2018, EUR 0.7 million, has been eliminated from the pro forma balance sheet. The adjustment has a recurring impact on the Issuer.
Other liabilities: the pro forma adjustment, EUR 0.7 million, reflects the impact from the estimated contingent consideration (additional purchase price). The contingent consideration is measured at fair value based on management’s best estimate. The contingent consideration has not been discounted, since the payment term is 15 months from the acquisition date. The adjustment has a recurring impact on the Issuer by the payment date.
(F) Offering
Balance sheet
This column reflects the impacts of the Offering.
The Extraordinary General Meeting held on 3 May 2018 resolved on the proposal of the Board of Directors to authorise the Board of Directors to decide on a share issue according to the pre-emption rights of shareholders.
In preparation of the pro forma information, it has been assumed, considering the subscription commitments and pricing of the issue, that the Offering will be completed in full, for the gross amount of EUR 11 million. The resulting pro forma adjustments in respect of the Offering are as follows: increase to the equity item Unrestricted equity reserve (reserve for invested unrestricted equity), EUR 10.3 million, increase to the item Cash and cash equivalents, EUR 10.5 million, net of both estimated unrecognised offering costs, EUR 0.5 million, and the deduction to the item Trade receivables and other receivables EUR 0.2 million, which comprises the offering-related costs already incurred. Both cost items referred to above are recorded as a deduction to the reserve for invested unrestricted equity. The adjustments have a recurring impact on the Issuer. The reorganisation of the loans is conditional upon the completion of the Offering.
(G) Financing arrangements
Efore intends to pay for the Powernet acquisition amounting to EUR 2.5 million using net proceeds from the Offering. The acquisition of Powernet is conditional upon Efore receiving sufficient proceeds from the Offering, based on its terms and conditions, so that the Company will raise at least EUR 8 million from the Offering or is able to raise financing for the payment of the consideration some other way.
Certain major shareholders of Efore, including Jussi Capital Oy and Rausanne Group, have granted Efore a short-term loan of EUR 4.4 million. These shareholders have undertaken to use the loan amount with interest for share subscriptions by setting off against the subscription price. The accumulated interest on this short-term loan amounted to EUR 0.1 million as at 30 September 2018 and therefore the set-off presented in the pro forma calculations totals EUR 4.5 million.
Furthermore, Efore Group will repay financial liabilities of EUR 0.8 million in connection with the Offering, as Efore has agreed with its main financier that it will amortise the loans received by EUR 0.2 million if the Company succeeds in raising gross proceeds of at least EUR 8.0 million through the Offering. Furthermore, the Company has agreed with its main financier bank that it will amortise the loans from said bank by a sum corresponding to 20%, i.e. EUR 0.6 million, of the gross proceeds of the Offering to the extent that they exceed EUR 8.0 million.
The adjustments have a recurring impact on the Issuer.
Consolidated statement of comprehensive income
The pro forma adjustment, EUR 0.1 million, reflects the decrease of interest expenses on financial liabilities resulting from the financing arrangements described above. The adjustment has a recurring impact on the Issuer.
Balance sheet
The pro forma adjustments relating to the financing arrangements described above are as follows: a decrease of the item Cash and cash equivalents, EUR 5.3 million, a decrease of the item Current interest-bearing liabilities EUR 5.2 million, and a decrease of the item Trade payables and other liabilities EUR 0.1 million. The adjustments have a recurring impact on the Issuer.