Tiscali 2009 Annual Report Download - page 51

Tiscali Group: Annual Report 2009
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Other significant events
As shown in the section “Disputes, contingent liabilities and commitments”, March 2010 saw the assignment
to a third party of the mandate for establishing the amounts necessary for settlement of the dispute between
Tiscali and Talk Talk limited regarding the release of part of the payment of the sale of UK assets deposited
under guarantee. No other significant events occurred after 31 December 2009.
7.7 Assessment of the business as a going-concern and business outlook
Events and uncertainties regarding the business continuity
The Tiscali Group incurred a consolidated loss for the financial year of EUR 387.0 million, of which EUR
372.3 million was related to disposals during the year, and has a deficit in consolidated net shareholders’
equity of EUR 67.0 million, after the share capital increase completed in November 2009 for approximately
EUR 180.0 million and after the effects of writing-off EUR 42.3 million in debt, in accordance with the
restructuring agreements signed with financial institutions. In addition, as at 31 December 2009, the Group
reports gross indebtedness of EUR 240.6 million and current liabilities which are greater than current (non-
financial) assets by EUR 85.3 million.
As at 31 December 2008, the loss stood at EUR 271.1 million (of which EUR 143.3 million determined by
the result of the assets sold), total shareholders’ equity amounted to EUR 4.8 million, and gross financial
debt totalled EUR 644.8 million. At the same date, the difference between current assets and liabilities
(non-financial) was a negative EUR 187.2 million.
The financial and economic disequilibrium of the Group, as already in evidence in the financial statements
for year ended at 31 December 2008, caused the Directors in early 2009 to prepare a new Business Plan
and related Financial Plan to enable the Tiscali Group to begin restructuring its debts in order to guarantee
its long-term financial equilibrium.
Subsequently, during 2009 the Group undertook certain actions (overall referred to as the ‘Restructuring
Plan’) aimed at achieving the long-term financial and economic equilibrium for the Group and to re-launch
its commercial activities (as described in paragraph 4.4 of the Report on Operations, “Significant events
during the year”).
In particular, as part of the Restructuring Plan the following actions were launched and completed, which
impacted the equity, financial and economic position shown in the financial statements for year ended at
31 December 2009:
1. preparation of the 2009-2013 business plan aimed at achieving the Tiscali Group’s long-term economic
and equity equilibrium;
2. sale of UK subsidiary Tiscali UK Ltd for a total value of EUR 245.4 million (as described in section 11
of the Consolidated Financial Statements); revenue from the sale was used mainly to repay a portion
of the Group’s debt;
3. sale of subsidiary Tiscali International Network for a total value of EUR 30.9 million;
4. renegotiation of the terms of the residual senior debt and Sale & lease-back debt (as described in
paragraph 4.4 of the Report on Operations, “Significant events during the year”);
5) launch and execution of a paid share capital increase offered under option to the shareholders of
Tiscali S.p.A., completed on 11 November 2009 and immediately used for the repayment of another
portion of financial debt in execution of the agreements entered into with lenders; based on said