Tiscali 2012 Annual Report Download - page 182

Annual financial report as at 31 December 2012

Date File Name Status Page
-
Annual Report as at 31
December 2012 2

The Directors have described the factors which indicate the continuation of uncertainties
linked to a situation of equity, economic and financial imbalance, in the presence of
significant gross commercial and financial debt, the latter subject to covenants and other
contractual obligations. The Directors believe that the achievement of a balanced equity,
financial and economic situation over the long-term depends on the rescheduling of the
financial dent which envisages, amongst other aspects, a repayment of EUR 107.5 million in
July 2014, and the achievement of the results set out in the Tiscali Group’ s business plan
which envisage the achievement of the growth objectives established in a market context
characterised by heavy competitive pressure. These factors are coupled with ongoing disputes,
described below in point b., assessed as potentially significant by the Directors.
In this context, the Directors indicate that initial contact started with a number of financing
institutions aimed at rescheduling the financial debt and the 2013-2017 business plan has been
up-dated. The up-dated plan hypothesises the rescheduling of the part of financial debt falling
due in 2014 and 2015 in excess with respect to the cash flows which is envisaged will be
generated during the period, for a total of around EUR 135 million.
The Directors, when assessing the elements indicated above, have described the action taken,
on the basis of which they believe that the Tiscali Group is reasonably able to continue with
the implementation of the business plan and that over the long-term this will make it possible
to achieve a balanced equity, financial and economic situation. In conclusion, the Directors
acknowledge that at present uncertainties still remain, that may raise considerable doubt on
the ability of the Tiscali Group to continue to operate under the going-concern assumption;
however, after making the necessary checks and after assessing the uncertainties found in the
light of the factors described, taking into account the period of time available for going ahead
with the implementation of the measures aimed at reducing the financial debt and launching
the activities necessary for the rescheduling of the same by July 2014, they have the
reasonable expectation that the Group has adequate resources to continue operations in the
near future and therefore have adopted the going-concern assumption when preparing the
financial statements;
d. the Directors reveal the existence of a number of potentially significant disputes brought by
certain associations and foundations representing the former minority shareholders of the
Dutch subsidiary World Online International NV (“WOL”).. The Dutch Supreme Court issued
its final sentence in November 2009, confirming some of the profiles of responsibility of
WOL and the financial institutions (“Financial Institutions”), without however passing
sentence with regard to any damages, which would have to be covered by new and separate
proceedings by the injured third parties. With regard to the settlement agreements reached in
2010 and 2011 between the Financial Institutions and the afore-mentioned associations and
foundations, the Tiscali Group, also taking into account the specific insurance coverage taken
out, is carrying out negotiations aimed at a settlement of the dispute, partly so as to avoid any
recourse taken by the Financial Institutions which, as indicated in the letter dated 11
December 2012, could take action against WOL in the event that this settlement is not
reached. The Directors also disclose that in December 2011, an additional request for
compensation was received from a foundation representing a further 29 shareholders or
assigns, which does not fall within the afore-mentioned negotiations underway with the
Financial Institutions. The same 29 shareholders have confirmed their claims by means of
letter dated 6 March 2013 and hypothesise legal action vis-à-vis WOL. With regard to these