Tiscali 2008 Annual Report Download - page 92

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CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
Current financial liabilities (note 34)
EUR (000) 31.12.2008 31.12.2007
Payables to banks and other lenders:
Payables to banks 510,012 176,204
Payables for finance leases (short-term) 21,399 19,502
531,411 195,706
Payables to banks and to other lenders (note 34 bis)
Payables to banks and other lenders include EUR 490.7 million
relating to the Banca Intesa San Paolo loan recorded on the
basis of the IAS “amortised costs” approach, in addition to
EUR 18.6 million of bank payables pertaining to the Italian
subsidiary (including EUR 5.5 million of financial payables to
factoring companies for the factoring, by some suppliers, of
their receivables to Tiscali) and EUR 0.6 million of bank
payables of the holding company Tiscali S.p.A..
The increase of EUR 333.8 million in payables to banks was
attributable to the following changes:
1)reclassification of the entire amount of the “Secured Bridge
facility” and “Credit Facility” loans for EUR 439.6 million
(nominal EUR 450 million) at 31 December 2008 from
medium/long-term payables to short-term payables, on a
consistent basis with the standstill request until and with
the process for re-negotiating the debt underway, in relation
to which please see the sections
Events subsequent to the
end of the year
on page 38 and Assessment of the business
as a going-concern and business outlook and prospects
on page 39;
2)use of an additional EUR 51.1 million relating to the RCF
loan (nominal EUR 50 million);
3)reimbursement of the right issuance bridge facility for EUR
150.2 million (nominal EUR 150 million) using the
proceeds deriving from the share capital increase carried
out in February 2008;
4)decrease in other short-term bank payables for EUR 6.7
million.
With respect to the original EUR 650 million loan from Banca
Intesa JP Morgan, the following is indicated:
a) EUR 150 million (“Right Issuance Bridge Facility”) was
repaid using the proceeds from the share capital increase
concluded in February 2008;
b) EUR 400 million (“Senior Secured Bridge Facility”), as
envisaged by the contractual clauses, was transformed
from a bridging loan into a long-term payable maturing on
13 September 2014.
c) the credit facility of EUR 50 million already disbursed falls
due in September 2011, while the additional EUR 50 million
(“Revolving Credit Facility”), falls due in 2009.
The loans have a floating rate linked to the Euribor and a cost,
taking into account the spreads and the commission, which
varies according to the structural features of said loan and,
therefore, the various tranches indicated previously. The margin
with respect to the Euribor for said loan is currently estimable
in 500 base points, with the exclusion of the tranche relating
to the envisaged share capital increase, already reimbursed.
The credit facility and the line of liquidity with Intesa Sanpaolo,
as per point c) above, contain financial commitments (financial
covenants) essentially linked to the observance of the following
financial indicators that must be assessed, at consolidated
level, on a quarterly basis: the ratio between the debt and
the Adjusted EBITDA and payments by way of principal and
interest servicing the debt (Debt Service Cover Ratio); ratio
between the EBITDA and net cost for interest (Interest Cover
Ratio).
The loan also envisages positive and negative type commitments
(so-called general covenants), usual in this type of funding,
including the following which are of significance: the limits
placed on the further financial indebtedness of the Tiscali
Group, the disbursement of dividends, the granting of secured
guarantees and the extraordinary activities, such as acquisitions
and disposals.
The afore-mentioned limits are such that they do not involve
significant restrictions to the Group’s ordinary operations. The loan
agreement is also assisted by a pledge on the shares of Tiscali
Group operating subsidiaries and on the Tiscali brand name.
The two bridging loans by contrast do not contain financial
covenants but only general covenants, therefore the same
considerations indicated above for the bank loan with
IntesaSanPaolo and the line of liquidity apply.
The following table summarizes the main elements of the existing
loans with Intesa San Paolo and JP Morgan
EUR (000) 31.12.2007 HFS/ Discontinues Exchange Provisions Utilisation 31.12.2008
operation difference
Provision for deferred taxation 27,891 - (6,416) - (19,151) (21.475)
Total 27,891 - (6,416) - (19,151) (21.475)