Tiscali 2012 Annual Report Download - page 61

Annual financial report as at 31 December 2012
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Date File Name Status Page
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Annual Report as at 31
December 2012 61
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• the Group’s business plan was updated, covering the entire period for the repayment of the
financial debt. This 2013-2017 business plan, approved by the Board of Directors on 29
March 2013, hypothesises, as from 2014, the rescheduling of the part of debt in excess with
respect to the cash flows which is envisaged will be generated over the plan’s duration (in
detail, in July 2014, when, as indicated previously, the GFA envisaged the repayment of a
significant portion of the financial debt for a total of EUR 107.5 million, including the portion of
PIK interest capitalised for around EUR 25 million). The overall amount of the debt falling due
in 2014 and 2015, to be rescheduled, on the basis of the financial projections, amounts to
approximately Euro 135 million.
Therefore, the possibility of managing to both reschedule the financial debt and achieve the business
plan depends on: a) the ability to rebuild an adequate supply of equity, b) the recoverability of asset
items, c) the capacity to comply with covenants and other contractual obligations and therefore to
maintain the availability of financing granted to meet other Group obligations, d) the achievement of a
balanced long-term equity, economic and financial situation for the Group.
Finally, these factors are coupled with ongoing disputes, whose outcomes, although not currently
foreseeable, have been assessed as potentially significant (see the section “Disputes, contingent
liabilities and commitments”).
Final assessment of the Board of Directors
The Board of Directors, after lengthy discussion, has highlighted how the Group:
• has observed all the obligations and due dates envisaged by the financial plan and by the
GFA, having paid the financial institutions, during 2012, a total amount of EUR 7.8 million (of
which EUR 5 million for repayment of the principal and EUR 2.8 million for interest);
• has maintained a cash flow from the operating activities (before the changes in working
capital) in line with the previous year (amounting to around EUR 60 million);
• has reduced its exposure to the suppliers;
• on the basis of the cash flow projections relating to 2013 and the first six months of 2014, no
situations of illiquidity emerge, as there are - as far as it can be estimated today - sufficient
funds for ensuring the operations for a period in any event longer than 12 months;
• during the last quarter of 2012 and the first few months of 2013, achieved a growing trend in
the telecommunications services customer base;
• up-dated the business plan, checking the consistency with the financial requirements
determined by the debt structure (the plan envisaged the repayment of the debt due to the
financial instructions falling due in July 2013 for an amount inclusive of interest of around EUR
8 million, while it hypothesises the rescheduling of the debt falling due as from 2014);
• continued to focus on certain sectors with high growth potential, such as the media sector,
where an increase in revenues was seen of 11.7% when compared with 2011, and on
particularly innovative projects.
Furthermore, the Directors - despite highlighting how the definition of the transaction for the
rescheduling of the financial debt as per the GFA on a consistent basis with the financial profile of the
new 2013-2017 Business Plan is at present merely in the preliminary stages and, therefore, it is not
possible to-date to make a prognostic forecast featuring sufficient detail - deemed it reasonable that,
on the basis of the matters which can be estimated to-date, the Group has a sufficient period of time to
launch and conclude all the measures and activities aimed at reducing and rescheduling said financial
debt in time in accordance with the matters hypothesised by the afore-mentioned business plan, so as
to permit the continuation of implementation of the same.