Interim Management Statement -- European Capital Limited Reports 2011 Net Operating Income of Euro 53 Million and Net Loss of Euro (2) Million
ST. PETER PORT, Guernsey, March 23, 2012 /PRNewswire/ -- European Capital Limited ("European Capital" or the "Company") today issues an Interim Management Statement announcing net operating income ("NOI") for the half year and year ended 31 December 2011 of euro 14 million and euro 53 million, respectively. Net loss for the half year and year were euro (88) million and euro (2) million, respectively. As at 31 December 2011, net asset value ("NAV") was euro 627 million, a 12%, or euro 88 million decrease from the 30 June 2011 NAV of euro 715 million and a euro 2 million decrease from the 31 December 2010 NAV of euro 629 million.
H2 2011 FINANCIAL SUMMARY
- euro 14 million NOI
- euro (13) million net realised loss on investments
- euro (102) million net unrealised depreciation on investments
- euro (88) million net loss
- euro 79 million of cash proceeds from realisations
2011 FINANCIAL SUMMARY
- euro 53 million NOI
- euro 5 million, or 11%, increase over 2010
- euro (29) million net realised loss on investments
- euro 23 million improvement over 2010
- euro (4) million net unrealised depreciation on investments
- euro 93 million decline over 2010
- euro (2) million net loss
- euro 107 million decline over 2010
- euro 194 million of cash proceeds from realisations
- euro 89 million less than 2010
- euro 288 million of AAA rated debt raised
- euro 627 million NAV at year end
- euro 2 million decrease over Q4 2010
- 0.7:1 debt to equity at year end
"Considering the volatility in the eurozone during this past year, I am pleased with our performance," said Malon Wilkus, Chairman and Chief Executive Officer. "We were able to strengthen our balance sheet by generating euro 194 million of cash realisations, reducing our leverage while our net asset value remained relatively unchanged. Despite this challenging environment, we remain focused on improving our balance sheet, growing our portfolio companies and originating high quality investment opportunities."
PORTFOLIO VALUATION
For the year ended 31 December 2011, net unrealised depreciation of investments totalled euro (4) million. In the first half of the year there was appreciation of euro 98 million on our private finance portfolio mainly driven by improvements in the performance of portfolio companies. This first half appreciation has reversed in the second half of the year with total depreciation of euro 102 million. This depreciation has resulted from the negative effect on public markets of economic uncertainty in the eurozone and its effect on the performance at certain portfolio companies.
"During the year, we have continued to strengthen our balance sheet," said Ira Wagner, President. "We have improved our asset coverage ratio to 243%. We continued to see liquidity in the portfolio during the year and are focused not only on maximising the value of our current investments but also on originating new opportunities to generate shareholder value. This has been made possible through the debt refinancing that we completed in June last year."
PORTFOLIO LIQUIDITY AND PERFORMANCE
In the second half of 2011, euro 79 million of cash proceeds were received from realisations of portfolio investments. The Company made euro 3 million in new committed investments in the second half of the year to support the current portfolio.
Since inception, European Capital has invested euro 3.3 billion in 91 portfolio companies. European Capital has realised euro 1.9 billion from the portfolio since inception, including senior debt syndications. Out of the euro 1.9 billion we have exited fully 41 portfolio companies, realising an aggregate of euro 1.2 billion comprising:
- euro 789 million of principal repayments;
- euro 166 million from loan syndications and sales;
- euro 123 million of collections of PIK notes and dividends; and
- euro 111 million from sales of equity.
These exits achieved an aggregate IRR of 9.7%. The equity investments of these exited portfolio companies have achieved a 29.0% IRR.
European Capital's portfolio as of 31 December 2011 at fair market value was euro 1.0 billion, with an average investment size of euro 19 million per portfolio company. European Capital's largest investment represents 13.8% of total investment assets at fair value and the ten largest investments represent 54.3% of total investment assets at fair value as of 31 December 2011.
During the year to 31 December 2011, European Capital:
- Realised proceeds of euro 194 million, compared with euro 283 million in 2010. The proceeds were at an average of 4.9% above the prior half year's valuations of the realised investments. The realisations proceeds for the year included:
- euro 53 million repayment of a debt investment in Norma, resulting in a 13% annual mezzanine rate of return;
- euro 30 million repayment of a debt investment in Gondola, resulting in a 10% annual senior and mezzanine rate of return;
- euro 25 million repayment of a debt investment in Integrated Dental Holdings resulting in a 13% annual mezzanine rate of return;
- euro 23 million repayment of a debt investment in Flint Ink resulting in a 10% annual senior and mezzanine rate of return.
- Invested euro 19.7 million in existing portfolio companies for the year, compared with euro 2.4 million in the same period of 2010.
As at 31 December 2011, loans with a cost of euro 245 million and a fair value of euro 40 million were on non-accrual, representing 5.6% of total loans at fair value, compared to euro 301 million cost and euro 77 million fair value of non-accrual loans, representing 8.9% of total loans at fair value as of 31 December 2010.
DEBT REFINANCING
In the first half of 2011, European Capital's consolidated subsidiary ECAS 2011-1 Loan B.V. ("ECAS 2011-1") sold and issued euro 288 million of AAA-rated secured floating rate notes, backed by assets with a par value of euro 865 million originated by other European Capital consolidated subsidiaries. The notes were rated by Standard & Poor's and comply with recent regulations affecting securitisations. The notes have a coupon payment of Euribor plus 320 basis points, payable semi-annually, and are due in 2024. The proceeds of the sale were used to refinance two existing debt obligations of European Capital consolidated subsidiaries, including a secured senior multicurrency term loan facility and an issuance of secured senior notes, as well as to make new investments.
"Our balance sheet continues to strengthen," said Juan Carlos Morales Cortes, Director. "The refinancing has provided us with long term certainty for our borrowing. The majority of our borrowing now have a maturity beyond 2022. The refinancing also provides us with liquidity to invest in new opportunities and will allow us to invest in existing portfolio companies for organic growth and add-on acquisitions, as well as to make new mezzanine investments and One-Stop Buyouts® of operating companies."
The terms of this securitisation allow for the reinvestment of proceeds from sale or repayment of investments held by ECAS 2011-1. Reinvestment must be made into eligible assets in compliance with certain criteria. The reinvestment period is for a period of two years from the date of the securitisation in June 2011; with the final application of such proceeds to be reinvested by December 2013, in line with the reinvestment criteria. As at 31 December 2011, there were proceeds available for reinvestment of euro 108 million, which has risen to euro 137 million as of the date of this release. As of the date of this release euro 11 million of the realised proceeds has been committed.
EUROPEAN CAPITAL LIMITED | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
As of 31 December 2011, 30 June 2011 and 31 December 2010 | ||||||||||||||
(in thousands) | ||||||||||||||
31 December 2011 | 30 June 2011 | 31 December 2011 Versus 30 June 2011 | 31 December 2010 | 31 December 2011 Versus 31 December 2010 | ||||||||||
euro | euro | euro | % | euro | euro | % | ||||||||
(audited) | (unaudited) | (audited) | ||||||||||||
Assets | ||||||||||||||
Investments at fair value (Cost basis of euro 1,555,191, euro 1,638,416 and euro 1,721,230, respectively) | 973,607 | 1,099,214 | (125,607) | -11% | 1,075,766 | (102,159) | -9% | |||||||
Cash and cash equivalents | 2,803 | 2,257 | 546 | 24% | 3,006 | (203) | -7% | |||||||
Restricted cash and cash equivalents | 142,056 | 69,653 | 72,403 | 104% | 21,380 | 120,676 | NM | |||||||
Interest receivable | 5,496 | 7,848 | (2,352) | -30% | 5,282 | 214 | 4% | |||||||
Derivatives agreements at fair value | 126 | 3,021 | (2,895) | -96% | 10,290 | (10,164) | -99% | |||||||
Other | 4,529 | 6,522 | (1,993) | -31% | 8,316 | (3,787) | -46% | |||||||
Total assets | 1,128,617 | 1,188,515 | (59,898) | -5% | 1,124,040 | 4,577 | 0% | |||||||
Liabilities and Shareholder's Equity | ||||||||||||||
Debt (maturing within one year euro 2,356, euro 1,704 and euro 224,742, respectively) | 439,017 | 429,685 | 9,332 | 2% | 484,872 | (45,855) | -9% | |||||||
Due to European Capital Financial Services (Guernsey) Limited | 1,439 | 1,818 | (379) | -21% | 1,351 | 88 | 7% | |||||||
Derivatives agreements at fair value | 24,272 | 915 | 23,357 | NM | 3,283 | 20,989 | NM | |||||||
Other | 37,153 | 41,266 | (4,113) | -10% | 5,458 | 31,695 | NM | |||||||
Total liabilities | 501,881 | 473,684 | 28,197 | 6% | 494,964 | 6,917 | 1% | |||||||
Shareholder's equity: | ||||||||||||||
Share Capital | 224,475 | 224,475 | - | 0% | 224,475 | - | 0% | |||||||
Undistributed net realised earnings | 1,078,718 | 1,087,988 | (9,270) | -1% | 1,064,903 | 13,815 | 1% | |||||||
Net unrealised foreign currency depreciation | (110,079) | (133,373) | 23,294 | 17% | (98,147) | (11,932) | -12% | |||||||
Net unrealised depreciation of investments | (566,378) | (464,259) | (102,119) | -22% | (562,155) | (4,223) | -1% | |||||||
Total shareholder's equity | 626,736 | 714,831 | (88,095) | -12% | 629,076 | (2,340) | 0% | |||||||
Total liabilities and shareholder's equity | 1,128,617 | 1,188,515 | (59,898) | -5% | 1,124,040 | 4,577 | 0% | |||||||
NM = Not Meaningful | ||||||||||||||
EUROPEAN CAPITAL LIMITED | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
Six Months and Year Ended 31 December 2011 and 2010 | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Six Months Ended | Six Months Ended | Year ended | Year Ended | |||||||||||||
31 December | 31 December | 31 December | 31 December | |||||||||||||
2011 | 2010 | 2011 Versus 2010 | 2011 | 2010 | 2011 Versus 2010 | |||||||||||
euro | euro | euro | % | euro | euro | euro | % | |||||||||
OPERATING INCOME: | ||||||||||||||||
Interest and dividend income | 39,484 | 62,215 | (22,731) | -37% | 105,724 | 118,457 | (12,733) | -11% | ||||||||
Fee and other income | 407 | 921 | (514) | -56% | 915 | 1,385 | (470) | -34% | ||||||||
Total operating income | 39,891 | 63,136 | (23,245) | -37% | 106,639 | 119,842 | (13,203) | -11% | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Interest | 13,584 | 17,728 | (4,144) | -23% | 26,471 | 46,492 | (20,021) | -43% | ||||||||
Management fee | 11,686 | 8,101 | 3,585 | 44% | 22,666 | 17,313 | 5,353 | 31% | ||||||||
General and administrative | 1,015 | 3,006 | (1,991) | -66% | 4,718 | 6,370 | (1,652) | -26% | ||||||||
Corporate restructuring costs | - | (162) | 162 | 100% | - | 1,858 | (1,858) | -100% | ||||||||
Total operating expenses | 26,285 | 28,673 | (2,388) | -8% | 53,855 | 72,033 | (18,178) | -25% | ||||||||
OPERATING INCOME BEFORE INCOME TAXES | 13,606 | 34,463 | (20,857) | -61% | 52,784 | 47,809 | 4,975 | 10% | ||||||||
Provision for income taxes | (44) | (67) | 23 | 34% | (88) | (146) | 58 | 40% | ||||||||
NET OPERATING INCOME | 13,562 | 34,396 | (20,834) | -61% | 52,696 | 47,663 | 5,033 | 11% | ||||||||
Net realised loss on extinguishment of debt | - | - | - | NM | (8,240) | - | (8,240) | 100% | ||||||||
Net realised loss on investments | ||||||||||||||||
Portfolio company investments | (13,208) | (60,071) | 46,863 | 78% | (28,826) | (52,225) | 23,399 | 45% | ||||||||
Foreign currency translations | (9,335) | 5,756 | (15,091) | -262% | (5,307) | 22,786 | (28,093) | -123% | ||||||||
Derivative agreements | (289) | (180) | (109) | -61% | 3,492 | (435) | 3,927 | NM | ||||||||
Total net realised loss on investments | (22,832) | (54,495) | 31,663 | 58% | (30,641) | (29,874) | (767) | -3% | ||||||||
NET REALISED (LOSS) EARNINGS | (9,270) | (20,099) | 10,829 | 54% | 13,815 | 17,789 | (3,974) | -22% | ||||||||
Net unrealised (depreciation) appreciation on investments | ||||||||||||||||
Portfolio company investments | (101,955) | 93,393 | (195,348) | -209% | (3,624) | 89,354 | (92,978) | -104% | ||||||||
Foreign currency translations | 23,294 | (29,377) | 52,671 | 179% | (11,932) | (4,965) | (6,967) | -140% | ||||||||
Derivative agreements | (164) | 1,252 | (1,416) | -113% | (599) | 2,400 | (2,999) | -125% | ||||||||
Total net unrealised (depreciation) appreciation on investments | (78,825) | 65,268 | (144,093) | -221% | (16,155) | 86,789 | (102,944) | -119% | ||||||||
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ("NET EARNINGS") | (88,095) | 45,169 | (133,264) | -295% | (2,340) | 104,578 | (106,918) | -102% | ||||||||
NM = Not Meaningful | ||||||||||||||||
EUROPEAN CAPITAL LIMITED | ||||||||||||||
OTHER FINANCIAL INFORMATION | ||||||||||||||
Six Months Ended 31 December 2011, 30 June 2011 and 31 December 2010 | ||||||||||||||
(in thousands) | ||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||
Six Months Ended | 31 December 2011 Versus | 31 December 2011 Versus | ||||||||||||
31 December 2011 | 30 June 2011 | 30 June 2011 | 31 December 2010 | 31 December 2010 | ||||||||||
euro | euro | euro | % | euro | euro | % | ||||||||
New Investments: | ||||||||||||||
Subordinated debt | 212 | - | 212 | 100% | - | 212 | 100% | |||||||
Convertible Bond | 223 | 6,300 | (6,077) | -96% | - | 223 | 100% | |||||||
Preferred Equity | - | 10,053 | (10,053) | -100% | 555 | (555) | -100% | |||||||
Common Equity | 2,874 | - | 2,874 | 100% | 1,000 | 1,874 | 187% | |||||||
Total | 3,309 | 16,353 | (13,044) | -80% | 1,555 | 1,754 | 113% | |||||||
Add-on Financing for Acquisitions | 297 | - | 297 | 100% | - | 297 | 100% | |||||||
Add-on Financing for Recapitalisations | 3,012 | 16,353 | (13,341) | -82% | 1,555 | 1,457 | 94% | |||||||
Total | 3,309 | 16,353 | (13,044) | -80% | 1,555 | 1,754 | 113% | |||||||
Realisations: | ||||||||||||||
Principal Prepayments | 47,688 | 75,824 | (28,136) | -37% | 90,888 | (43,200) | -48% | |||||||
Payment of Accrued Payment-in-kind Interest and Dividends and Original Issue Discount | 14,338 | 17,614 | (3,276) | -19% | 23,814 | (9,476) | -40% | |||||||
Sale of Equity Investments | 1,293 | - | 1,293 | 100% | 17,138 | (15,845) | -92% | |||||||
Sale of Loans | 15,992 | 21,046 | (5,054) | -24% | 1,558 | 14,434 | NM | |||||||
Total | 79,311 | 114,484 | (35,173) | -31% | 133,398 | (54,087) | -41% | |||||||
Appreciation, Depreciation, Gains and Losses: | ||||||||||||||
Gross Realised Gains | 419 | - | 419 | 100% | 7,677 | (7,258) | -95% | |||||||
Gross Realised Losses | (13,627) | (15,618) | 1,991 | 13% | (67,749) | 54,122 | 80% | |||||||
Portfolio Net (Losses) Gains | (13,208) | (15,618) | 2,410 | 15% | (60,072) | 46,864 | 78% | |||||||
Foreign Currency | (9,335) | 4,028 | (13,363) | -332% | 5,756 | (15,091) | -262% | |||||||
Derivative Agreements | (289) | 3,781 | (4,070) | -108% | (179) | (110) | -61% | |||||||
Extinguishment of debt | - | (8,240) | 8,240 | 100% | - | - | 100% | |||||||
Net Realised Losses | (22,832) | (16,049) | (6,783) | -42% | (54,495) | 31,663 | 58% | |||||||
Gross Unrealised Appreciation of Portfolio Investments | 40,142 | 133,965 | (93,823) | -70% | 95,928 | (55,786) | -58% | |||||||
Gross Unrealised Depreciation of Portfolio Investments | (158,510) | (53,870) | (104,640) | -194% | (63,491) | (95,019) | -150% | |||||||
Reversal of Prior Period Unrealised (Depreciation) Appreciation Upon Realisation | 16,413 | 18,236 | (1,823) | -10% | 60,957 | (44,544) | -73% | |||||||
Net Unrealised Depreciation of Portfolio Investments | (101,955) | 98,331 | (200,286) | -204% | 93,394 | (195,349) | -209% | |||||||
Foreign Currency | 23,294 | (35,226) | 58,520 | 166% | (29,377) | 52,671 | 179% | |||||||
Derivative Agreements | (164) | (435) | 271 | 62% | 1,252 | (1,416) | -113% | |||||||
Net Unrealised Depreciation of Investments | (78,825) | 62,670 | (141,495) | -226% | 65,269 | (144,094) | -221% | |||||||
- | ||||||||||||||
Net Gains, Losses, Appreciation and Depreciation | (101,657) | 46,621 | (148,278) | -318% | 10,774 | (112,431) | -1044% | |||||||
Other Financial Data: | ||||||||||||||
Net Asset Value | 626,736 | 714,831 | (88,095) | -12% | 629,076 | (2,340) | 0% | |||||||
Financial Liabilities | 439,017 | 429,685 | 9,332 | 2% | 484,872 | (45,855) | -9% | |||||||
Asset Coverage Ratio | 243% | 266% | 230% | |||||||||||
Debt to Equity Ratio | 0.7 x | 0.6 x | 0.8 x | |||||||||||
Credit Quality: | ||||||||||||||
Weighted Average Effective Interest Rate on Debt Investments | 6.5% | 8.9% | -2.4% | -27% | 8.8% | -2.3% | -25.9% | |||||||
Loans on Non-Accrual at Cost | 244,947 | 199,985 | 44,962 | 22% | 300,669 | (55,722) | -19% | |||||||
Loans on Non-Accrual at Fair Value | 39,940 | 65,190 | (25,250) | -39% | 77,180 | (37,240) | -48% | |||||||
Non-Accrual Loans at Cost as a Percentage of Total Loans | 23.0% | 17.3% | 23.8% | |||||||||||
Non-Accrual Loans at Fair Value as a Percentage of Total Loans | 5.6% | 7.8% | 8.9% | |||||||||||
Return on Equity: | ||||||||||||||
LTM Net Operating Income Return on Average Equity at Cost | 4.2% | 5.8% | 3.7% | |||||||||||
LTM Realised Earnings Return on Average Equity at Cost | 1.1% | 0.2% | 1.4% | |||||||||||
LTM Earnings Return on Average Equity | -0.4% | 20.4% | 18.0% | |||||||||||
Current Half Year Net Operating Income Return on Average Equity at Cost Annualised | 2.2% | 6.2% | 5.4% | |||||||||||
Current Half Year Realised Earnings Return on Average Equity at Cost Annualised | -1.5% | 3.6% | -3.2% | |||||||||||
Current Half Year Earnings Return on Average Equity Annualised | -26.2% | 25.2% | 15.1% | |||||||||||
NM = Not Meaningful | ||||||||||||||
EUROPEAN CAPITAL LIMITED | |||||||||||
STATIC POOL INFORMATION | |||||||||||
Portfolio Statistics for Investments Made in Each of the Following Years | |||||||||||
(all numbers in thousands of euro, unless otherwise stated) | |||||||||||
Portfolio statistics (1) (15) | 2005 | 2006 | 2007 | 2008 | Aggregate | ||||||
IRR at Fair Value of All Investments (2) (14) | 11.7% | 5.1% | (2.3)% | 2.0% | 1.7% | ||||||
IRR of Exited Investments (3) (14) | 14.4% | 8.3% | (0.5)% | (0.5)% | 5.6% | ||||||
IRR at Fair Value of Equity Investments only (2) (4) (5) (14) | 4.9% | 8.5% | (16.1)% | (60.1)% | (1.4)% | ||||||
IRR of Exited Equity Investments only (3) (4) (5) (14) | 21.1% | 18.8% | (45.1)% | 0.0% | (16.4)% | ||||||
IRR at Fair Value of All One Stop Buyout® Investments (2) (14) | (24.7)% | 10.0% | (21.6)% | (1.0)% | |||||||
IRR at Fair Value of Current One Stop Buyout® Investments (2) (14) | (27.8)% | 7.6% | (10.0)% | 2.3% | |||||||
IRR at Exited One Stop Buyout® Investments (3) (14) | 6.9% | 16.9% | (100.0)% | (22.5)% | |||||||
Committed Investments (14) | 240,673 | 1,236,637 | 1,511,315 | 333,927 | 3,322,552 | ||||||
Total Exits and Prepayments of Comitted Investments (14) | 223,645 | 899,917 | 643,314 | 83,041 | 1,849,917 | ||||||
Total Interest, Dividends and Fees Collected (14) | 81,216 | 179,371 | 307,136 | 72,244 | 639,967 | ||||||
Total Net Realised Gains (Loss) on Investments | 11,750 | (55,611) | (65,397) | (27,797) | (137,055) | ||||||
Current Cost of Investments | 17,111 | 405,847 | 877,308 | 254,925 | 1,555,191 | ||||||
Current Fair Value of Investments | 539 | 304,438 | 457,237 | 211,393 | 973,607 | ||||||
Current Fair Value of Investments as a % of Total Investments at Fair Value | 0.1% | 31.3% | 47.0% | 21.7% | 100.0% | ||||||
Net Unrealised Depreciation (16) | (16,550) | (58,184) | (391,345) | (61,496) | (527,575) | ||||||
Non-Accruing Loans at Cost | 9,212 | 13,860 | 210,323 | 11,552 | 244,947 | ||||||
Non-Accruing Loans at Fair Value | - | 2,127 | 31,435 | 6,378 | 39,940 | ||||||
Equity Interest at Fair Value (4) | 257 | 167,832 | 78,035 | 1,826.00 | 247,950 | ||||||
Debt to adjusted EBITDA (4) (7) (8) (9) (12) | 5.6 | 4.1 | 6.1 | 5.3 | 5.3 | ||||||
Interest Coverage (4) (9) (12) | 0.0 | 5.8 | 6.2 | 3.2 | 5.4 | ||||||
Debt Service Coverage (4) (9) (12) | 0.0 | 3.0 | 5.0 | 2.2 | 3.8 | ||||||
Average Age of Companies (4) (12) | 20 | 63 | 46 | 39 | 50 | ||||||
Diluted Ownership Percentage (4) (13) | 0.2% | 61.9% | 13.5% | 0.3% | 25.8% | ||||||
Average Revenue (4) (10) (12) | 733,870 | 261,365 | 251,552 | 199,837 | 243,670 | ||||||
Average Adjusted EBITDA (4) (7) (12) | 134,266 | 32,112 | 45,383 | 37,802 | 39,635 | ||||||
Total Revenues (4) (10) | 1,202,092 | 5,850,669 | 13,271,151 | 1,325,965 | 21,649,877 | ||||||
Total Adjusted EBITDA (4) (7) | 205,301 | 626,848 | 2,318,982 | 241,752 | 3,392,883 | ||||||
% Senior Loans (4) (9) (11) | 0.0% | 25.4% | 35.5% | 0.0% | 25.2% | ||||||
% Loans with Lien (4) (9) (11) | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||
Majority Owned Portfolio Companies ("MOPC") (6) | 2005-2008 Static Pools Aggregate | ||||||||||
Number of MOPC | 8 | ||||||||||
Total Revenues (10) | 633,966 | ||||||||||
Total Gross Profits (10) | 320,068 | ||||||||||
Total Adjusted EBITDA (7) | 83,988 | ||||||||||
Total Capital Expenditure (10) | 12,284 | ||||||||||
Total Current European Capital Investment in MOPC At Fair Value | 294,035 | ||||||||||
Diluted Ownership Percentage of European Capital in MOPC (13) | 74.6% | ||||||||||
Total Cash | 64,377 | ||||||||||
Total Assets | 752,800 | ||||||||||
Total Debt | 504,680 | ||||||||||
Total Third Party Debt at Cost | 368,323 | ||||||||||
Total Shareholders' Equity at Fair Value | 256,754 | ||||||||||
(1) | Static pool classification is based on the year the initial investment was made. Subsequent add-on investments are included in the static pool year of the original investment. There were no new investments made in 2009 to 2011. | |
(2) | Assumes investments are exited at current US GAAP fair value. | |
(3) | Includes fully exited investments of existing portfolio companies. | |
(4) | Excludes investments in Structured Products. | |
(5) | Excludes equity investments that are the result of conversions of debt and warrants received with the issuance of debt. | |
(6) | Majority Owned Portfolio Company ("MOPC") investments represents investments in which European Capital, or its affiliates, have a fully diluted ownership percentage of 50% or more or has over 50% board representation at the portfolio company. | |
(7) | Adjusted EBITDA may reflect certain adjustments to the reported EBITDA of a portfolio company for non-recurring, unusual or infrequent items or other pro-forma items or events to normalize current earnings which a buyer may consider in a change in control transactions. These adjustments may be material and are highly subjective in nature. Portfolio company reported EBITDA is for the most recently available twelve months, or when appropriate, the forecasted twelve months or current annualized run-rate | |
(8) | For portfolio companies with a nominal Adjusted EBITDA amount, the portfolio company's maximum debt leverage is limited to 15 times Adjusted EBITDA. | |
(9) | Excludes investments in which we own only equity. | |
(10) | For the most recent twelve months, or when appropriate, the forecasted twelve months. | |
(11) | As a percentage of our total debt investments. | |
(12) | Weighted average based on fair value. | |
(13) | Weighted average based on fair value of equity investments. | |
(14) | Non euro-denominated amounts are retranslated at the exchange rate ruling at the date of original investment. | |
(15) | Non euro-denominated balances, other than those referred to in (14), are retranslated at the exchange rate ruling at the balance sheet date. | |
(16) | Balance Sheet appreciation (depreciation) of investments excluding foreign exchange revaluation. | |
IMPORTANT DISCLOSURES
NAV
Any valuation information relating to the portfolio companies of European Capital stated or referred to in this release has been determined by the Board of European Capital in good faith, on a basis consistent with past practice and for the purposes of complying with its reporting obligations under applicable laws.
Forward-looking statements
This document may contain "forward-looking statements." By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Many of these risks and uncertainties relate to factors beyond European Capital's control or which cannot be estimated precisely. These factors include, but are not limited to, uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, and changes in the conditions of the industries in which European Capital has made investments. Actual outcomes and results may therefore differ materially from any outcomes or results expressed or implied by any such forward-looking statements.
Performance data quoted above represents past performance of European Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in European Capital will likely fluctuate. Additionally, European Capital's current performance may be lower or higher than the performance data quoted above.
Basis of preparation
This interim management statement has been prepared to provide further transparent information about European Capital and should not be relied on by any person for any other purpose. Certain financial information in this interim management statement is based on unaudited management accounts. Nothing in this document is intended to be, or should be construed as, a profit forecast.
ABOUT EUROPEAN CAPITAL
European Capital is an investment company for pan-European equity, mezzanine and senior debt investments with euro 1.0 billion in assets under management. European Capital is a wholly-owned affiliate of American Capital, Ltd ("American Capital"). It is managed by European Capital Financial Services (Guernsey) Limited ("ECFSG" or the "Investment Manager"), a wholly-owned affiliate of American Capital. The Investment Manager has offices in London and Paris. As of 31 December 2011 the Investment Manager had 5 investment teams with 20 investment professionals and employed 26 support staff. European Capital and its affiliates will consider senior and mezzanine debt investment opportunities from 5 million to 40 million in either euros or sterling and up to 100 million for One Stop Buyouts®. For further information, please refer to www.EuropeanCapital.com.
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital has $68 billion in assets under management and seven offices in the U.S. and Europe American Capital and its affiliates will consider investment opportunities up to $300 million. For further information, please refer to www.AmericanCapital.com.
Contact: European Capital Financial Services Limited
+ 44 207 539 7000
Ira Wagner, President
Juan Carlos Morales Cortes, Director
Richard Smith, Finance Director
SOURCE European Capital Limited
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