EEMS = Semiconduttori + SOLSONICA = Fotovoltaico: 3d con solo notizie [ II ]
interessente formfactor
ciao a tutti, segnalo che su questo sito molto valido per piccoli investori(
http://www.fool.com/?source=iflsittph0000001), hanno postato l'8 marzo, un articolo OK, su una smallcap (a detta loro), pronta a spiccare il volo: FORMFACTOR(NASDAQ), Ebbene, direte che c'entra con la MMS? Formfactor é un azienda che testa i semiconduttori...
adios
ciao a tutti, segnalo che su questo sito molto valido per piccoli investori(
http://www.fool.com/?source=iflsittph0000001), hanno postato l'8 marzo, un articolo OK, su una smallcap (a detta loro), pronta a spiccare il volo: FORMFACTOR(NASDAQ), Ebbene, direte che c'entra con la MMS? Formfactor é un azienda che testa i semiconduttori...
adios
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PRESS RELEASE
EEMS GROUP: The Board of Directors meeting today has taken important decisions.
1. The 2009 financial statements to be submitted to the shareholders were approved.
Group earnings are improving:
• Consolidated revenues: 133.5 million euros (-13%);
• Consolidated EBITDA: 26.0 million euros (in line with 2008);
• Negative consolidated EBIT: -15.0 million euros (-45.1 million euros in 2008);
• Consolidated net loss: -20.2 million euros (-35.2 million euros in 2008)
The EEMS Group has reversed the negative trend, obtaining earnings results in the second
half of the year at the pre-crisis level.
Revenues of the subsidiary Solsonica have risen to 37 million euros, up 94%. The subsidiary
has achieved a positive Ebitda for the entire year in its second year of activity.
2. The Board passed a resolution regarding a potential operation of M&A regarding the
subsidiary Singapore Eems Test.
3. The signing of the contractual agreements for the debt restructuring is expected on
the imminent completion of the preliminary authorisation procedure by the banks.
________________________________
1. Consolidated Financial Statements 2009
The financial crisis had a significant impact on Group turnover, especially in the first half of the
year. The drop in revenues seen during 2009 was certainly ascribable to the loss of the customer
Qimonda which, having declared its insolvency at the beginning of the year, conditioned the
results of the EEMS Group. However, thanks to the consolidated years-long relations with the
customer Micron Technology Inc, the Company was able to re-establish its productive capacity
which had been temporarily suspended as a result of the loss of the customer Qimonda.
EEMS Group
Business sectors Revenues Ebitda Ebit
(in thousands of euros) 2009 2008 2009 2008 2009 2008
Semiconductors Asia 95,741 118,563 26,364 40,580 (13,348) 2,062
Photovoltaic 37,037 19,122 638 (2,141) (1,225) (2,282)
Eems Italia 9,897 24,145 (1,492) (8,590) (1,922) (39,790)
Eliminations (9,156) (7,740) 22 (3,812) 1,004 (5,081)
Group total 133,519 154,090 25,532 26,037 (15,491) (45,091)
Total Group operating revenues in 2009 were 133.5 million euros, down 13% on 2008. The
comparison with the preceding year is not significant in that during 2008 the Cittaducale plant
was still only partly operative in the production of memories, while activities in the field of
photovoltaic cells and modules got into full swing only in 2009.
Group Gross Operating Margin (EBITDA) was 26 million euros in 2009, in line with the
preceding year which, however, was influenced by the writedowns due to the loss of the
customer Qimonda.
The operating result (EBIT), which was negative for 15 million euros at the end of 2009,
improved as compared with -45,1 million euros in 2008, even though in the first part of the year
it had to bear fixed costs which were not remunerated by an appropriate level of production.
By examining results by line of business and quarter, as can be seen in the following table, it is
seen that the EEMS Group returned, in the second part of 2009, to its customary turnover and
margins levels (semiconductors sector) with reasonable prospects for further growth.
Semiconductors
Semiconductors Asia
(in thousands of euros) 1 Qu ‘09 2 Qu ‘09 3 Qu ‘09 4 Qu ‘09 Year 2009
Revenues 18,586 18,951 26,804 31,400 95,741
Ebitda 4,260 3,883 8,270 9,951 26,364
Ebit (5,344) (5,275) (550) (2,179) (13,348)
Investment 573 1,203 2,070 4,617 8,463
Employees 1,460 1,531 1,828 1,879 1,879
Turnover generated by the Asian semiconductors division (net of intercompany transactions)
fell during 2009 by about 19% compared with the preceding year, even though the trend by
quarter during the year showed marked signs of improvement. This recovery was obtained
especially thanks to the acquisition of new orders coming from the customer Micron
Technology Inc. which allowed us to re-open the Eems Suzhou Technology plant which
resumed activities in July 2009. This production facility, as mentioned in the 31 December 2008
Report, had interrupted activities at the start of 2009 following Qimonda’s insolvency.
In the last quarter of the year, turnover (expressed in the functional currency) amounted to
about 46.1 million US dollars compared with about 39.2 million US dollars in the same period of
2008.
In the last quarter of 2009, Group companies located in China billed the customer Micron for
about 20.1 million US dollars; in the same period of 2008 they billed the customer Qimonda for
services for about 14.8 million US dollars.
Solsonica
Photovoltaic
(in thousands of euros) 1 Qu ‘09 2 Qu ‘09 3 Qu ‘09 4 Qu ‘09 Year 2009
Revenues 5,555 4,596 6,117 20,769 37,037
Ebitda 187 (2,028) 350 2,129 638
Ebit 94 (2,560) (192) 1,433 (1,225)
Investment 2,098 7 688 314 3,107
Employees 138 155 166 169 169
In 2009, despite the heavy contraction in the demand for photovoltaic modules which took
place in the first six months of the year, Solsonica posted total revenues for 37 million euros, up
about 94% on 19.1 million euros for the year ended 31 December 2008.
In particular, the above data show that there was a strong increase in turnover in the fourth
quarter, thanks to total revenues of 20.8 million euros compared with 16.3 million euros for the
first nine months of 2009. By virtue of this growth, the operating result before depreciation and
amortisation (Ebitda) was positive for 638 thousand euros, as against a loss of 2.1 million euros
in the preceding year.
Investment made relates mainly to the acquisition of machinery for the production of
photovoltaic modules which at the end of the year comprised three complete lines for a total
capacity of over 60Mw. In addition, during 2009, the production line for photovoltaic cells
became operative (capacity of over 30Mw). This contributed to improving the cost structure in
that it reduced the necessity to acquire photovoltaic cells from third parties.
With regard to the number of employees currently in place, the subsidiary Solsonica operates
using parent company employees who have been temporarily seconded. At 31 December 2009,
secondments to Solsonica numbered 143 (100 at 31 December 2008).
Eems Italia SpA
Finally, the parent EEMS Italia S.p.A. posted revenues for 10 million euros (24 million euros in
2008). EBITDA was negative for 1.5 million euros (-8.6 million euros in 2008) and the net result
was negative for 6.6 million euros (-31.2 million euros in 2008).
Outlook for the business
Memories business
As a result first of the stabilisation and then the rapid recovery in the price of memories in the
market during 2009, the production of these articles on the basis of current DDR2 technologies
settled. In the meantime, migration has been starting towards DDR3 technology in connection
with which the Company has already partly introduced its production technologies and will
continue to do so to satisfy customer demand in 2010.
All memories producers are migrating to DDR3, including EEMS customers. One can foresee
that there will be a massive migration in the second half of the year, passing between the end of
the current year and 2011 from 1G DDR2 to 2G DDR3, which will become the mainstream.
Price stability and the memories generation crossover will constitute a positive development for
the market.
Photovoltaic business
2010 will be an important year for the photovoltaic sector, particularly in Italy. Companies in
the market will try to complete all possible installations in order to maximise the benefits from
the Conto Energia scheme which expires on 31 December.
This should make it possible to benefit from a seasonal effect between the second and third
quarters of this year which will make it necessary for many operators, including Solsonica, to
have higher working capital available to meet a sudden recovery in the market.
The conditions for the renewal of the Conto Energia scheme regarding new tariffs applicable
from 2011 can have a significant impact on the market in coming years. Too low tariffs could
negatively influence the development of large photovoltaic areas in the future or lead to a drop
in sales prices.
Solsonica is therefore studying a number of projects aimed at the development of other business
segments in the area of housing and small and medium-sized businesses, without neglecting
the segment of large installations through its joint venture with Kopernico.
Events subsequent to the year end
The standstill agreement set up for the definition of the contractual documentation relating to
the restructuring of financial debt expired on 28 February 2010. As publicly announced, the
financial institutions have not considered it opportune to make a further renewal since the
signing of the contracts is expected to take place within a few days.
Information required by Consob pursuant to article 114, paragraph 5 D, of
Legislative Decree n° 58/98
A) Net financial position of the EEMS Group
(in thousands of euros) 31.12.2009 31.12.2008
Cash and cash equivalents (14,677) (34,199)
Short-term bank loans
portion not due but payable on demand
67,844
48,310
46,426
-
Short-term bank loans due 27,497 -
Short-term leasing debt 175 1,830
Net short-term borrowings 80,839 14,057
Medium/long-term bank loans - 60,717
Medium/long-term leasing debt 27 203
Medium/long-term borrowings 27 60,920
Net financial position 80,866 74,977
The change in net financial position is mainly due to the settlement of past debt to suppliers and
to lower cash generated from operations.
As already reported in preceding interim reports on operations, the Company is engaged on the
renegotiation of the reimbursement terms for loans received from the syndicate of Italian and
foreign banks led by Banca Unicredit. This exercise terminated with the signing of a timesheet
on 23 December 2009 which redefined the loan conditions and provided a further loan to the
subsidiary Solsonica. It should be recalled in addition, as already publicly announced, that the
Group did not settle the loan refund instalments and interest due respectively on 30 June and
31 December 2009 (for a total amount of Euro 26,777 thousand).
During the first half-year, the subsidiary EEMS Suzhou renegotiated the terms for repaying its
own loans. Those loans called for repayment at maturity. The new payment plan arranged with
the banks Agricultural Bank of China, China Construction Bank and Industrial and Commercial
Bank (which constitute the syndicate for this arrangement) calls for monthly refunds from
August 2009 to December 2010.
Net financial position of EEMS Italia S.p.A.
(in thousands of euros) 31.12.2009 31.12.2008
Cash and cash equivalents (1,476) (13,196)
Short-term loans to subsidiaries (9,357) (7,109)
Short-term bank loans
portion not due but payable on demand
39,055
39,055
20,550
-
Short-term bank loans due 22,618 -
Short-term leasing debt - 34
Net short-term borrowings 50,840 279
Medium/long-term bank loans - 38,834
Net medium/long-term financial debt - 38,834
Net financial position 50,840 39,113
B) Comment on EEMS Group past due debt positions
The Group holds no significant past due debt in the form of trade payables, taxes or social
security payments (for more on the situation regarding loans, the above tables should be
consulted). On the date of approval of this statement, no Group creditors have initiated
recovery proceedings of any kind (such as collection reminders, injunctions or suspension of
supply etc).
C) Related parties and intercompany transactions
The Group has no dealings with related parties other than subsidiaries. Intercompany
transactions are governed by market conditions.
D) Comments on financial obligations and status of the restructuring plan
The Company has obtained a line of credit from a syndicate of banks in the amount of
105 million euros. At 30 December 2009, 71,383 thousand euros has been drawn from the line of
credit, and of that amount 13,883 thousand euros was drawn in US dollars.
The loan agreement provides the following:
loans are to be refunded over three years through six half-year instalments starting
from 30 June 2009;
various financial covenants must be observed, determined on the basis of a perimeter of
companies conventionally represented by EEMS Italia and its subsidiaries, excluding Solsonica
S.p.A.
As a direct consequence of the drop in margins encountered during 2008 the Company did not
pay principal and interest instalments due on 30 June 2009 and 31 December 2009 in the amount
of 26,777 thousand euros. Even before the syndicate and the public had been informed of the
default, the Directors were working proactively to contact the financial institutions in order to
explore options for rewriting the current commitments. The Company hired Lazard & Co as
financial advisor and Bain & Co as business advisor in relation to the restructuring plan
On 30 March 2009, company management and the financial advisor met with the institutions
making up the syndicate and put on the table the goal of rewriting the loan in order to make it
more consistent with the economic/financial outlook dictated by the market situation and
forecasts.
The Company has also obtained an expert’s opinion on its business plan pursuant to article 67,
paragraph 3d) of the Bankruptcy Law (Royal Decree n° 267/1942).
On 23 December 2009 the Company finalised with all the financial institutions the decisions
required for the approval of the debt rewriting proposal. The agreement, which is summarised
in a term sheet which will be reflected in a specific contract, provides for:
− the figures used by the Group pursuant to the syndicated loan agreement will be
maintained, with rescheduling of the payment terms and an extension of duration; and
− the issue of new credit lines and guarantees supporting the activities of the subsidiary
Solsonica.
The standstill agreement, which inter alia suspended the payment obligations for matured
instalments and interest up to 28 February 2010, expired without renewal by the banks in that
the loan agreements are to be signed within a few days, all preparatory actions called for in the
timesheet having been executed. Further information on these matters is reported in the section
of this document on Information on the status of the restructuring of financial debt.
E) Business Plan - implementation status
The Board of Directors approved on 19 February 2010 a Business Plan for the period 2009-2015
which had been prepared during the third quarter of 2009 and was the subject of an opinion
issued pursuant to article 67 of the Bankruptcy Law by an expert appointed by the Company.
This is at the basis of the agreements with the EEMS Group lenders. Results for 2009 are in line
with or slightly better than those indicated in the business plan and it is encouraging that
results for the new year are confirming this situation.
Manager’s Declaration
Francesco Fois in his capacity of manager responsible for the preparation of accounting
documents for EEMS Italia SpA attests also pursuant to the third and fourth paragraphs of
article 154-bis of Legislative Decree 58 of 24 February 1998 that: the administrative and
accounting procedures for the preparation of the consolidated and parent company financial
statements of EEMS ITALIA S.P.A. during 2009 are appropriate as to their characteristics and
effective application and that the consolidated and parent company financial statements of
EEMS ITALIA S.P.A. correspond to the Company’s accounting books and records.
2. Eems Test Singapore
On the basis of an non-binding proposal received from a primary operator in the sector, the
Company has accepted to engage in negotiations for the possible sale of the subsidiary EEMS
Test of Singapore.
In connection with this, a number of Asian corporate management members resident in
Singapore have handed in their resignations so as to follow other interests, but have ensured
continuity up to 30 June 2010.
3. Information on procedures for the restructuring of financial debt
As is known, the Company has been working intensively with its advisors to reach a new
agreement redefining essentially the repayment conditions and obligations to bring them more
into line with expected results of operations in the lines of activity in which the Group is
engaged and to definitively overcome the default events which took place in 2009. On
23 December 2009 an agreement was reached with the financial institutions which, within a
term sheet agreeing a standstill up to 28 February 2010 and ensuring that the Group will
continue as a going concern, fixes inter alia (i) the essential methods, terms and conditions on
the basis of which the original loan agreement will be rewritten; (ii) the commitment to make a
loan amount available to the subsidiary Solsonica necessary to support its working capital
requirements.
The new agreements provide for the following repayment methods for the original agreement:
- a portion of about 14,353 thousand euros (denominated Facility A) which will be
refunded in six half-year instalments starting on 30 June 2011;
- a portion of about 60,013 thousand euros (denominated Facility B) which will be
refunded in five half-year instalments of 8,401 thousand euros each, starting on 30 June
2012;
- the remainder, of 18,008 thousand euros, will be refunded in a single instalment on
31 December 2014.
The financial institutions (against a mortgage over the parent company’s real estate) have also
granted the subsidiary Solsonica a revolving facility to support its working capital
requirements.
The lines are defined as follows
- revolving lines of two-year duration for a maximum amount of 4,500 e 8,500 thousand
euros respectively for years 2010 and 2011;
- performance bonds of two-year duration for 5,000 and 10,000 thousand euros
respectively for years 2010 and 2011.
As at the date of approval of the consolidated financial statements to be submitted to the
shareholders, information available to the directors lead them to believe that the agreements in
question will be signed as soon as the banking syndicate has completed the relative
authorisation process. In this connection, the directors, having taken note of the situation, will
attend on a timely basis to any changes in these matters and will update the financial statements
already authorised for issue also with reference to elements concerning the evaluation of the
Company as a going concern.
The EEMS Group is among the leading operators at world level in the assembly, testing and finishing of
semiconductor memories. Through its subsidiary Solsonica SpA it produces photovoltaic cells and modules and
develops complete solutions for the design and realisation of photovoltaic systems. EEMS counts among its customers
some of the most prestigious manufacturers of semiconductor memories, such as Nanya Technology Corporation and
Broadcom. Its headquarters are in Cittaducale (Rieti, Italy), with a strong operational presence in China and
Singapore.
Note: attached to this press release are the consolidated and parent company income
statements, balance sheets, and statements of cash flows and borrowings related to the
consolidated and parent company situations.
Cittaducale (Rieti, Italy), 12 March 2010
EEMS GROUP
Consolidated income statement
(in thousands of euros)
2009 2008
Revenues 132,084 153,638
Other operating revenues 1,435 452
Total operating revenues 133,519 154,090
Raw materials and consumable stores used 53,905 55,526
- non-recurring portion - 314
Services 27,699 31,416
- non-recurring portion - 1,620
Staff costs 23,668 33,215
- non-recurring portion - 4,610
Other operating costs 2,715 7,896
- non-recurring portion - 6,052
Operating result before depreciation and amortisation and
writebacks/writedowns of non-current assets
25,532 26,037
Depreciation and amortisation 39,405 41,057
(Writebacks)/Writedowns 1,618 30,071
- non-recurring portion - 23,889
Operating result (15,491) (45,091)
Financial income 891 2,668
Financial charges (6,752) (6,138)
Result before taxes (21,352) (48,561)
Taxes for the year (1,133) (13,397)
Result for the year (20,219) (35,164)
Portion pertaining to the Group (20,219) (35,164)
Portion pertaining to minority interests - -
Group profit (loss) per share (0.476) (0.827)
Diluted Group profit (loss) per share (0.476) (0.825)
EEMS GROUP: The Board of Directors meeting today has taken important decisions.
1. The 2009 financial statements to be submitted to the shareholders were approved.
Group earnings are improving:
• Consolidated revenues: 133.5 million euros (-13%);
• Consolidated EBITDA: 26.0 million euros (in line with 2008);
• Negative consolidated EBIT: -15.0 million euros (-45.1 million euros in 2008);
• Consolidated net loss: -20.2 million euros (-35.2 million euros in 2008)
The EEMS Group has reversed the negative trend, obtaining earnings results in the second
half of the year at the pre-crisis level.
Revenues of the subsidiary Solsonica have risen to 37 million euros, up 94%. The subsidiary
has achieved a positive Ebitda for the entire year in its second year of activity.
2. The Board passed a resolution regarding a potential operation of M&A regarding the
subsidiary Singapore Eems Test.
3. The signing of the contractual agreements for the debt restructuring is expected on
the imminent completion of the preliminary authorisation procedure by the banks.
________________________________
1. Consolidated Financial Statements 2009
The financial crisis had a significant impact on Group turnover, especially in the first half of the
year. The drop in revenues seen during 2009 was certainly ascribable to the loss of the customer
Qimonda which, having declared its insolvency at the beginning of the year, conditioned the
results of the EEMS Group. However, thanks to the consolidated years-long relations with the
customer Micron Technology Inc, the Company was able to re-establish its productive capacity
which had been temporarily suspended as a result of the loss of the customer Qimonda.
EEMS Group
Business sectors Revenues Ebitda Ebit
(in thousands of euros) 2009 2008 2009 2008 2009 2008
Semiconductors Asia 95,741 118,563 26,364 40,580 (13,348) 2,062
Photovoltaic 37,037 19,122 638 (2,141) (1,225) (2,282)
Eems Italia 9,897 24,145 (1,492) (8,590) (1,922) (39,790)
Eliminations (9,156) (7,740) 22 (3,812) 1,004 (5,081)
Group total 133,519 154,090 25,532 26,037 (15,491) (45,091)
Total Group operating revenues in 2009 were 133.5 million euros, down 13% on 2008. The
comparison with the preceding year is not significant in that during 2008 the Cittaducale plant
was still only partly operative in the production of memories, while activities in the field of
photovoltaic cells and modules got into full swing only in 2009.
Group Gross Operating Margin (EBITDA) was 26 million euros in 2009, in line with the
preceding year which, however, was influenced by the writedowns due to the loss of the
customer Qimonda.
The operating result (EBIT), which was negative for 15 million euros at the end of 2009,
improved as compared with -45,1 million euros in 2008, even though in the first part of the year
it had to bear fixed costs which were not remunerated by an appropriate level of production.
By examining results by line of business and quarter, as can be seen in the following table, it is
seen that the EEMS Group returned, in the second part of 2009, to its customary turnover and
margins levels (semiconductors sector) with reasonable prospects for further growth.
Semiconductors
Semiconductors Asia
(in thousands of euros) 1 Qu ‘09 2 Qu ‘09 3 Qu ‘09 4 Qu ‘09 Year 2009
Revenues 18,586 18,951 26,804 31,400 95,741
Ebitda 4,260 3,883 8,270 9,951 26,364
Ebit (5,344) (5,275) (550) (2,179) (13,348)
Investment 573 1,203 2,070 4,617 8,463
Employees 1,460 1,531 1,828 1,879 1,879
Turnover generated by the Asian semiconductors division (net of intercompany transactions)
fell during 2009 by about 19% compared with the preceding year, even though the trend by
quarter during the year showed marked signs of improvement. This recovery was obtained
especially thanks to the acquisition of new orders coming from the customer Micron
Technology Inc. which allowed us to re-open the Eems Suzhou Technology plant which
resumed activities in July 2009. This production facility, as mentioned in the 31 December 2008
Report, had interrupted activities at the start of 2009 following Qimonda’s insolvency.
In the last quarter of the year, turnover (expressed in the functional currency) amounted to
about 46.1 million US dollars compared with about 39.2 million US dollars in the same period of
2008.
In the last quarter of 2009, Group companies located in China billed the customer Micron for
about 20.1 million US dollars; in the same period of 2008 they billed the customer Qimonda for
services for about 14.8 million US dollars.
Solsonica
Photovoltaic
(in thousands of euros) 1 Qu ‘09 2 Qu ‘09 3 Qu ‘09 4 Qu ‘09 Year 2009
Revenues 5,555 4,596 6,117 20,769 37,037
Ebitda 187 (2,028) 350 2,129 638
Ebit 94 (2,560) (192) 1,433 (1,225)
Investment 2,098 7 688 314 3,107
Employees 138 155 166 169 169
In 2009, despite the heavy contraction in the demand for photovoltaic modules which took
place in the first six months of the year, Solsonica posted total revenues for 37 million euros, up
about 94% on 19.1 million euros for the year ended 31 December 2008.
In particular, the above data show that there was a strong increase in turnover in the fourth
quarter, thanks to total revenues of 20.8 million euros compared with 16.3 million euros for the
first nine months of 2009. By virtue of this growth, the operating result before depreciation and
amortisation (Ebitda) was positive for 638 thousand euros, as against a loss of 2.1 million euros
in the preceding year.
Investment made relates mainly to the acquisition of machinery for the production of
photovoltaic modules which at the end of the year comprised three complete lines for a total
capacity of over 60Mw. In addition, during 2009, the production line for photovoltaic cells
became operative (capacity of over 30Mw). This contributed to improving the cost structure in
that it reduced the necessity to acquire photovoltaic cells from third parties.
With regard to the number of employees currently in place, the subsidiary Solsonica operates
using parent company employees who have been temporarily seconded. At 31 December 2009,
secondments to Solsonica numbered 143 (100 at 31 December 2008).
Eems Italia SpA
Finally, the parent EEMS Italia S.p.A. posted revenues for 10 million euros (24 million euros in
2008). EBITDA was negative for 1.5 million euros (-8.6 million euros in 2008) and the net result
was negative for 6.6 million euros (-31.2 million euros in 2008).
Outlook for the business
Memories business
As a result first of the stabilisation and then the rapid recovery in the price of memories in the
market during 2009, the production of these articles on the basis of current DDR2 technologies
settled. In the meantime, migration has been starting towards DDR3 technology in connection
with which the Company has already partly introduced its production technologies and will
continue to do so to satisfy customer demand in 2010.
All memories producers are migrating to DDR3, including EEMS customers. One can foresee
that there will be a massive migration in the second half of the year, passing between the end of
the current year and 2011 from 1G DDR2 to 2G DDR3, which will become the mainstream.
Price stability and the memories generation crossover will constitute a positive development for
the market.
Photovoltaic business
2010 will be an important year for the photovoltaic sector, particularly in Italy. Companies in
the market will try to complete all possible installations in order to maximise the benefits from
the Conto Energia scheme which expires on 31 December.
This should make it possible to benefit from a seasonal effect between the second and third
quarters of this year which will make it necessary for many operators, including Solsonica, to
have higher working capital available to meet a sudden recovery in the market.
The conditions for the renewal of the Conto Energia scheme regarding new tariffs applicable
from 2011 can have a significant impact on the market in coming years. Too low tariffs could
negatively influence the development of large photovoltaic areas in the future or lead to a drop
in sales prices.
Solsonica is therefore studying a number of projects aimed at the development of other business
segments in the area of housing and small and medium-sized businesses, without neglecting
the segment of large installations through its joint venture with Kopernico.
Events subsequent to the year end
The standstill agreement set up for the definition of the contractual documentation relating to
the restructuring of financial debt expired on 28 February 2010. As publicly announced, the
financial institutions have not considered it opportune to make a further renewal since the
signing of the contracts is expected to take place within a few days.
Information required by Consob pursuant to article 114, paragraph 5 D, of
Legislative Decree n° 58/98
A) Net financial position of the EEMS Group
(in thousands of euros) 31.12.2009 31.12.2008
Cash and cash equivalents (14,677) (34,199)
Short-term bank loans
portion not due but payable on demand
67,844
48,310
46,426
-
Short-term bank loans due 27,497 -
Short-term leasing debt 175 1,830
Net short-term borrowings 80,839 14,057
Medium/long-term bank loans - 60,717
Medium/long-term leasing debt 27 203
Medium/long-term borrowings 27 60,920
Net financial position 80,866 74,977
The change in net financial position is mainly due to the settlement of past debt to suppliers and
to lower cash generated from operations.
As already reported in preceding interim reports on operations, the Company is engaged on the
renegotiation of the reimbursement terms for loans received from the syndicate of Italian and
foreign banks led by Banca Unicredit. This exercise terminated with the signing of a timesheet
on 23 December 2009 which redefined the loan conditions and provided a further loan to the
subsidiary Solsonica. It should be recalled in addition, as already publicly announced, that the
Group did not settle the loan refund instalments and interest due respectively on 30 June and
31 December 2009 (for a total amount of Euro 26,777 thousand).
During the first half-year, the subsidiary EEMS Suzhou renegotiated the terms for repaying its
own loans. Those loans called for repayment at maturity. The new payment plan arranged with
the banks Agricultural Bank of China, China Construction Bank and Industrial and Commercial
Bank (which constitute the syndicate for this arrangement) calls for monthly refunds from
August 2009 to December 2010.
Net financial position of EEMS Italia S.p.A.
(in thousands of euros) 31.12.2009 31.12.2008
Cash and cash equivalents (1,476) (13,196)
Short-term loans to subsidiaries (9,357) (7,109)
Short-term bank loans
portion not due but payable on demand
39,055
39,055
20,550
-
Short-term bank loans due 22,618 -
Short-term leasing debt - 34
Net short-term borrowings 50,840 279
Medium/long-term bank loans - 38,834
Net medium/long-term financial debt - 38,834
Net financial position 50,840 39,113
B) Comment on EEMS Group past due debt positions
The Group holds no significant past due debt in the form of trade payables, taxes or social
security payments (for more on the situation regarding loans, the above tables should be
consulted). On the date of approval of this statement, no Group creditors have initiated
recovery proceedings of any kind (such as collection reminders, injunctions or suspension of
supply etc).
C) Related parties and intercompany transactions
The Group has no dealings with related parties other than subsidiaries. Intercompany
transactions are governed by market conditions.
D) Comments on financial obligations and status of the restructuring plan
The Company has obtained a line of credit from a syndicate of banks in the amount of
105 million euros. At 30 December 2009, 71,383 thousand euros has been drawn from the line of
credit, and of that amount 13,883 thousand euros was drawn in US dollars.
The loan agreement provides the following:
loans are to be refunded over three years through six half-year instalments starting
from 30 June 2009;
various financial covenants must be observed, determined on the basis of a perimeter of
companies conventionally represented by EEMS Italia and its subsidiaries, excluding Solsonica
S.p.A.
As a direct consequence of the drop in margins encountered during 2008 the Company did not
pay principal and interest instalments due on 30 June 2009 and 31 December 2009 in the amount
of 26,777 thousand euros. Even before the syndicate and the public had been informed of the
default, the Directors were working proactively to contact the financial institutions in order to
explore options for rewriting the current commitments. The Company hired Lazard & Co as
financial advisor and Bain & Co as business advisor in relation to the restructuring plan
On 30 March 2009, company management and the financial advisor met with the institutions
making up the syndicate and put on the table the goal of rewriting the loan in order to make it
more consistent with the economic/financial outlook dictated by the market situation and
forecasts.
The Company has also obtained an expert’s opinion on its business plan pursuant to article 67,
paragraph 3d) of the Bankruptcy Law (Royal Decree n° 267/1942).
On 23 December 2009 the Company finalised with all the financial institutions the decisions
required for the approval of the debt rewriting proposal. The agreement, which is summarised
in a term sheet which will be reflected in a specific contract, provides for:
− the figures used by the Group pursuant to the syndicated loan agreement will be
maintained, with rescheduling of the payment terms and an extension of duration; and
− the issue of new credit lines and guarantees supporting the activities of the subsidiary
Solsonica.
The standstill agreement, which inter alia suspended the payment obligations for matured
instalments and interest up to 28 February 2010, expired without renewal by the banks in that
the loan agreements are to be signed within a few days, all preparatory actions called for in the
timesheet having been executed. Further information on these matters is reported in the section
of this document on Information on the status of the restructuring of financial debt.
E) Business Plan - implementation status
The Board of Directors approved on 19 February 2010 a Business Plan for the period 2009-2015
which had been prepared during the third quarter of 2009 and was the subject of an opinion
issued pursuant to article 67 of the Bankruptcy Law by an expert appointed by the Company.
This is at the basis of the agreements with the EEMS Group lenders. Results for 2009 are in line
with or slightly better than those indicated in the business plan and it is encouraging that
results for the new year are confirming this situation.
Manager’s Declaration
Francesco Fois in his capacity of manager responsible for the preparation of accounting
documents for EEMS Italia SpA attests also pursuant to the third and fourth paragraphs of
article 154-bis of Legislative Decree 58 of 24 February 1998 that: the administrative and
accounting procedures for the preparation of the consolidated and parent company financial
statements of EEMS ITALIA S.P.A. during 2009 are appropriate as to their characteristics and
effective application and that the consolidated and parent company financial statements of
EEMS ITALIA S.P.A. correspond to the Company’s accounting books and records.
2. Eems Test Singapore
On the basis of an non-binding proposal received from a primary operator in the sector, the
Company has accepted to engage in negotiations for the possible sale of the subsidiary EEMS
Test of Singapore.
In connection with this, a number of Asian corporate management members resident in
Singapore have handed in their resignations so as to follow other interests, but have ensured
continuity up to 30 June 2010.
3. Information on procedures for the restructuring of financial debt
As is known, the Company has been working intensively with its advisors to reach a new
agreement redefining essentially the repayment conditions and obligations to bring them more
into line with expected results of operations in the lines of activity in which the Group is
engaged and to definitively overcome the default events which took place in 2009. On
23 December 2009 an agreement was reached with the financial institutions which, within a
term sheet agreeing a standstill up to 28 February 2010 and ensuring that the Group will
continue as a going concern, fixes inter alia (i) the essential methods, terms and conditions on
the basis of which the original loan agreement will be rewritten; (ii) the commitment to make a
loan amount available to the subsidiary Solsonica necessary to support its working capital
requirements.
The new agreements provide for the following repayment methods for the original agreement:
- a portion of about 14,353 thousand euros (denominated Facility A) which will be
refunded in six half-year instalments starting on 30 June 2011;
- a portion of about 60,013 thousand euros (denominated Facility B) which will be
refunded in five half-year instalments of 8,401 thousand euros each, starting on 30 June
2012;
- the remainder, of 18,008 thousand euros, will be refunded in a single instalment on
31 December 2014.
The financial institutions (against a mortgage over the parent company’s real estate) have also
granted the subsidiary Solsonica a revolving facility to support its working capital
requirements.
The lines are defined as follows
- revolving lines of two-year duration for a maximum amount of 4,500 e 8,500 thousand
euros respectively for years 2010 and 2011;
- performance bonds of two-year duration for 5,000 and 10,000 thousand euros
respectively for years 2010 and 2011.
As at the date of approval of the consolidated financial statements to be submitted to the
shareholders, information available to the directors lead them to believe that the agreements in
question will be signed as soon as the banking syndicate has completed the relative
authorisation process. In this connection, the directors, having taken note of the situation, will
attend on a timely basis to any changes in these matters and will update the financial statements
already authorised for issue also with reference to elements concerning the evaluation of the
Company as a going concern.
The EEMS Group is among the leading operators at world level in the assembly, testing and finishing of
semiconductor memories. Through its subsidiary Solsonica SpA it produces photovoltaic cells and modules and
develops complete solutions for the design and realisation of photovoltaic systems. EEMS counts among its customers
some of the most prestigious manufacturers of semiconductor memories, such as Nanya Technology Corporation and
Broadcom. Its headquarters are in Cittaducale (Rieti, Italy), with a strong operational presence in China and
Singapore.
Note: attached to this press release are the consolidated and parent company income
statements, balance sheets, and statements of cash flows and borrowings related to the
consolidated and parent company situations.
Cittaducale (Rieti, Italy), 12 March 2010
EEMS GROUP
Consolidated income statement
(in thousands of euros)
2009 2008
Revenues 132,084 153,638
Other operating revenues 1,435 452
Total operating revenues 133,519 154,090
Raw materials and consumable stores used 53,905 55,526
- non-recurring portion - 314
Services 27,699 31,416
- non-recurring portion - 1,620
Staff costs 23,668 33,215
- non-recurring portion - 4,610
Other operating costs 2,715 7,896
- non-recurring portion - 6,052
Operating result before depreciation and amortisation and
writebacks/writedowns of non-current assets
25,532 26,037
Depreciation and amortisation 39,405 41,057
(Writebacks)/Writedowns 1,618 30,071
- non-recurring portion - 23,889
Operating result (15,491) (45,091)
Financial income 891 2,668
Financial charges (6,752) (6,138)
Result before taxes (21,352) (48,561)
Taxes for the year (1,133) (13,397)
Result for the year (20,219) (35,164)
Portion pertaining to the Group (20,219) (35,164)
Portion pertaining to minority interests - -
Group profit (loss) per share (0.476) (0.827)
Diluted Group profit (loss) per share (0.476) (0.825)
