Impact of financial restructuring measures on equity and preliminary information on the result and financial position for the financial year 2020

On 16 November 2020, Delete Group Oyj (“Delete”) announced it had initiated certain voluntary restructuring measures, which included, among others, a restructuring of its EUR 110,000,000 notes due 2021.

On 15 January 2021, Delete announced the successful completion of a written procedure regarding the senior secured notes, as proposed on 16 December 2020. On 16 January 2021, an extraordinary general meeting approved a new share issue of EUR 10 million in order to raise capital for a partial redemption of the outstanding notes, as required in the amended Terms and Conditions approved by the noteholders on 15 January 2021.

On 29 January 2021, Demolition Services in Finland was divested with a purchase price of EUR 7.3 million to Lotus Maskin & Transport AB. On 5 February 2021, Delete announced that the conditions for effectiveness of certain amendments to the terms and conditions of its secured notes are satisfied with the amendments to the Terms and Conditions effective on the same date, 5 February 2021. On 12 February 2021, Delete made a EUR 20 million partial redemption of the notes, consisting of the required EUR 15 million redemption as well as the first EUR 5 million instalment to be made from the factoring proceeds, in accordance with the amended Terms and Conditions and the conditions for such amendments, financed by the new share issue, factoring proceeds and proceeds from the sale of Demolition Services in Finland. On 12 February 2021, Delete’s new super senior credit facility (SSRCF) with Collector Bank AB became effective, replacing the existing SSRCF with Nordea Bank Plc. Nordea Bank Plc will continue to provide an EUR 2,000,000 guarantee facility to Delete.

As a result of the restructuring measures described above which took place in January-February 2021¨(“Restructuring”), Delete’s equity has strengthened by a total of EUR 34.8 million. The following measures taken have strengthened equity:

  • a write-down in the nominal amount of the notes (EUR 24.8 million)
  • new equity invested by the shareholders (EUR 10 million)

At the end of 2020, Delete’s equity was EUR -1.9 million, including the result for the financial year 2020, approximately EUR -30.2 million, including EUR -20.3 million write-off of Demolition Services net assets. Taking into account the Restructuring, Delete Group’s consolidated equity (pro forma) would have been EUR 32.9 million on December 31, 2020.

At year end 2020, a total of EUR 3.8 million were received from the non-recourse factoring facility, hence additional estimated EUR 1.2 million was raised to finance the first EUR 5 million repayment of the notes from factoring proceeds. When all the funds raised through the restructuring measures, including the additional funds expected under the factoring facility, have been used to redeem the notes, the amount of the notes outstanding will be EUR 65 million. The bond will mature on 21 April 2024.

The following unaudited pro forma financial information (‘pro forma information’, ‘pro forma’) is presented to illustrate the impact of the Restructuring on the results of operations and financial position of Delete Group, had the Restructuring taken place as of 31 December 2020.This pro forma  information is presented for illustrative purposes only and is not a part of the information reported according to IAS 34 Interim Financial Reporting -standard. The purpose of the pro forma information is to illustrate the effects of the Restructuring, had they taken place at the dates presented in this pro forma. Therefore, the pro forma information does not illustrate the actual results of operations or financial position of Delete nor the results of operations or financial position of Delete in the future. The pro forma adjustments are based upon available information and assumptions. There is no certainty that the assumptions used in the compilation of the pro forma information will prove to be correct. The unaudited pro forma information has been compiled in accordance with the Commission Regulation (EC) No 980/2019 appendix 20.

CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION, UNAUDITED
TEUR Reported Pro forma adjust. Pro forma
ASSETS 31.12.2020 31.12.2020
Total non-current assets 122 711 122 711
Current assets      
Trade and other receivables 12 673 -1 157 11 516
Cash and cash equivalents 7 752 14 7 766
Other current assets 1 392   1 392
Total current assets 21 817 -1 143 20 674
Assets held for sale 16 952 -16 952 0
     
Total assets 161 481 -18 095 143 385
TEUR Reported Pro forma adjust. Pro forma
EQUITY AND LIABILITIES 31.12.2020 31.12.2020
Equity
Reserve for invested non-restricted equity 69 661 10 001 79 662
Profit and loss for the year -30 248 24 780 -5 468
Other equity -41 329   -41 329
Total equity -1 916 34 781 32 865
Non-current liabilities
Interest-bearing financial liabilities 0 65 000 65 000
Other non-current liabilities 9 569   9 569
Current liabilities
Interest-bearing financial liabilities 114 084 -109 780 4 304
Other current liabilities 31 647   31 647
Total liabilities 155 300 -44 780 110 520
Liabilities to assets held for sale 8 096 -8 096 0
Total equity and liabilities 161 480 -18 095 143 385

 

Pro forma adjustments:

1) Total current assets: EUR 1.1 million including increases of EUR 10.0 million from new share capital and EUR 8.9. of divestment proceeds and cash from the divested entity and decreases of EUR 20.0 million from partial repayment of the senior secured notes

2) Assets held for sale: EUR 17.0 million write-off of divested assets, offset by cash received as sale proceeds

3) Total equity: EUR 34.8 million includes EUR 10.0 million of new invested capital and EUR 24.8 million from an equal write-off to the senior secured notes

4) Non-current liabilities: EUR 65.0 million increase from a reclassification of the senior secured notes from current liabilities to non-current due to maturity extension of the notes to April 2024

5) Current liabilities: EUR 109.8 million reduction of which EUR 65.0 million reclassified as non-current liabilities due to the maturity extension of the notes, EUR 20.0 million as partial repayment of the notes and EUR 24.8 million of debt write-off.

6) Liabilities to assets held for sales: EUR 8.1 million write-off of divested liabilities, offset by cash received as sale proceeds

  

For more information:

Ville Mannola, CFO

phone: +358 400 357 767

email: ville.mannola@delete.fi

 

DELETE GROUP IN BRIEF

Delete Group is one of the leading environmental service providers in the Nordics. The group offers business-critical client services, which require specialist competences and specialized equipment through two business areas: Industrial Cleaning Services and Recycling Services.

The Group is headquartered in Helsinki and employs approximately 700 professionals at over 35 locations in Finland and Sweden.