Tiscali 2009 Annual Report Download - page 110

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Concerning the sale of Ti Net assets on 26 May to the BS private equity fund, the transaction took place at
a net price of EUR 30.9 million, against a value of EUR 32.6 million for assets sold. The economic effect of
the transaction was essentially zero at 31 December 2009 (a total capital gain of EUR 1.6 million), since the
company wrote down the assets of the company sold in the financial statements at 31 December 2008 for
an amount of EUR 3.7 million.
Concerning the operations sold in the UK on 3 July 2009, it consisted of the cash sale of 100% of the
shares of Tiscali UK to CPW for 236 million pounds by the sub holding Tiscali UK Plc. The sale of the shares
entailed transferring to CPW the debts for financial leases owed by Tiscali UK. Under the transaction, CPW
and Tiscali UK reached a transitory agreement with former minority shareholders of Tiscali UK (VNIL),
holders of about 13% of Tiscali UK. The agreement provided for the sale of their minority interests in Tiscali
UK and a waiver of about 72 million pounds of amounts owed to the UK subsidiary. 7 million pounds of
the remaining amount, equal to about 17 million pounds, was repaid in cash with proceeds from the sale
to CPW. The remaining 10 million pounds was repaid with the proceeds generated from the share capital
increase concluded in November 2009.
The agreement provides the following payment terms at the closing date on 3 July 2009:
Il contratto prevede i seguenti termini di pagamento alla data del closing avvenuto in data 3 luglio 2009:
• immediate payment to Tiscali of about 200 million pounds used to partially pay off their debt to Senior
Lenders (about 180 million pounds), amounts owed to Tiscali UK management (about 8 million pounds)
and amounts owed to former VNIL minority shareholders (about 7 million pounds);
• setting up an escrow account of 35.4 million pounds, corresponding to 15% of the sale price for the
first 12 months, which can be reduced to 10% for the subsequent 6 months, as a guarantee for any
price adjustments negotiated based on operating and financial parameters or certain declarations and
guarantees that may result in various forms of indemnities also with regard to rendering services.
At 31 December 2009 the escrow was written down for an amount of 7.5 million pounds (EUR 8.4
million). The value recorded in the financial statements was affected by the negative exchange rate at
31 December 2009 by about 1 million EUR. The amount of the escrow, net of the write-down and of
the negative effect of the exchange rate, amounted to EUR 31.4 million at 31.12.09.
The breakdown of the sale price for UK operations is shown in the table below:
GBP EUR
(EUR 000)
Sale price 236,000 -
of which:
For UK management for stock options (8,445) -
For VNIL (7,000) -
Total after amounts for UK Management and VNIL 220,555 254,800
Consolidated Financial Statements and Explanatory Notes