ST. PETER PORT, Guernsey,
March 23, 2012 /PRNewswire/ --
European Capital Limited ("European Capital" or the "Company")
today issues an Interim Management Statement announcing net
operating income ("NOI") for the half year and year ended
31 December 2011 of euro 14 million and euro
53 million, respectively. Net loss for the half year
and year were euro (88) million and
euro (2) million, respectively.
As at 31 December 2011, net
asset value ("NAV") was euro 627
million, a 12%, or euro 88
million decrease from the 30 June
2011 NAV of euro 715 million
and a euro 2 million decrease from
the 31 December 2010 NAV of
euro 629 million.
H2 2011 FINANCIAL SUMMARY
- euro 14 million NOI
- euro (13) million net realised
loss on investments
- euro (102) million net unrealised
depreciation on investments
- euro (88) million net loss
- euro 79 million of cash proceeds
from realisations
2011 FINANCIAL SUMMARY
- euro 53 million NOI
- euro 5 million, or 11%, increase
over 2010
- euro (29) million net realised loss on investments
- euro 23 million improvement over
2010
- euro (4) million net unrealised depreciation on investments
- euro 93 million decline over
2010
- euro (2) million net loss
- euro 107 million decline over
2010
- euro 194 million of cash proceeds from realisations
- euro 89 million less than
2010
- euro 288 million of AAA rated debt raised
- euro 627 million NAV at year end
- euro 2 million decrease over Q4
2010
- 0.7:1 debt to equity at year end
"Considering the volatility in the eurozone during this past
year, I am pleased with our performance," said Malon Wilkus, Chairman and Chief Executive
Officer. "We were able to strengthen our balance sheet by
generating euro 194 million of cash
realisations, reducing our leverage while our net asset value
remained relatively unchanged. Despite this challenging
environment, we remain focused on improving our balance sheet,
growing our portfolio companies and originating high quality
investment opportunities."
PORTFOLIO VALUATION
For the year ended 31 December
2011, net unrealised depreciation of investments totalled
euro (4) million. In the first
half of the year there was appreciation of euro 98 million on our private finance portfolio
mainly driven by improvements in the performance of portfolio
companies. This first half appreciation has reversed in the
second half of the year with total depreciation of euro 102 million. This depreciation has
resulted from the negative effect on public markets of economic
uncertainty in the eurozone and its effect on the performance at
certain portfolio companies.
"During the year, we have continued to strengthen our balance
sheet," said Ira Wagner, President.
"We have improved our asset coverage ratio to 243%. We
continued to see liquidity in the portfolio during the year and are
focused not only on maximising the value of our current investments
but also on originating new opportunities to generate shareholder
value. This has been made possible through the debt
refinancing that we completed in June last year."
PORTFOLIO LIQUIDITY AND PERFORMANCE
In the second half of 2011, euro 79
million of cash proceeds were received from realisations of
portfolio investments. The Company made euro 3 million in new committed investments in
the second half of the year to support the current portfolio.
Since inception, European Capital has invested euro 3.3 billion in 91 portfolio companies.
European Capital has realised euro 1.9
billion from the portfolio since inception, including senior
debt syndications. Out of the euro 1.9
billion we have exited fully 41 portfolio companies,
realising an aggregate of euro 1.2
billion comprising:
- euro 789 million of principal
repayments;
- euro 166 million from loan
syndications and sales;
- euro 123 million of collections
of PIK notes and dividends; and
- euro 111 million from sales of
equity.
These exits achieved an aggregate IRR of 9.7%. The equity
investments of these exited portfolio companies have achieved a
29.0% IRR.
European Capital's portfolio as of 31
December 2011 at fair market value was euro 1.0 billion, with an average investment size
of euro 19 million per portfolio
company. European Capital's largest investment represents
13.8% of total investment assets at fair value and the ten largest
investments represent 54.3% of total investment assets at fair
value as of 31 December 2011.
During the year to 31 December
2011, European Capital:
- Realised proceeds of euro 194
million, compared with euro 283
million in 2010. The proceeds were at an average of
4.9% above the prior half year's valuations of the realised
investments. The realisations proceeds for the year included:
- euro 53 million repayment of a
debt investment in Norma, resulting in a 13% annual mezzanine rate
of return;
- euro 30 million repayment of a
debt investment in Gondola, resulting in a 10% annual senior and
mezzanine rate of return;
- euro 25 million repayment of a
debt investment in Integrated Dental Holdings resulting in a 13%
annual mezzanine rate of return;
- euro 23 million repayment of a
debt investment in Flint Ink resulting in a 10% annual senior and
mezzanine rate of return.
- Invested euro 19.7 million in
existing portfolio companies for the year, compared with
euro 2.4 million in the same period
of 2010.
As at 31 December 2011, loans with
a cost of euro 245 million and a fair
value of euro 40 million were on
non-accrual, representing 5.6% of total loans at fair value,
compared to euro 301 million cost and
euro 77 million fair value of
non-accrual loans, representing 8.9% of total loans at fair value
as of 31 December 2010.
DEBT REFINANCING
In the first half of 2011, European Capital's consolidated
subsidiary ECAS 2011-1 Loan B.V. ("ECAS 2011-1") sold and issued
euro 288 million of AAA-rated secured
floating rate notes, backed by assets with a par value of
euro 865 million originated by other
European Capital consolidated subsidiaries. The notes were
rated by Standard & Poor's and comply with recent regulations
affecting securitisations. The notes have a coupon payment of
Euribor plus 320 basis points, payable semi-annually, and are due
in 2024. The proceeds of the sale were used to refinance two
existing debt obligations of European Capital consolidated
subsidiaries, including a secured senior multicurrency term loan
facility and an issuance of secured senior notes, as well as to
make new investments.
"Our balance sheet continues to strengthen," said Juan Carlos Morales Cortes, Director. "The
refinancing has provided us with long term certainty for our
borrowing. The majority of our borrowing now have a maturity
beyond 2022. The refinancing also provides us with liquidity
to invest in new opportunities and will allow us to invest in
existing portfolio companies for organic growth and add-on
acquisitions, as well as to make new mezzanine investments and
One-Stop Buyouts® of operating companies."
The terms of this securitisation allow for the reinvestment of
proceeds from sale or repayment of investments held by ECAS 2011-1.
Reinvestment must be made into eligible assets in compliance
with certain criteria. The reinvestment period is for a
period of two years from the date of the securitisation in
June 2011; with the final application
of such proceeds to be reinvested by December 2013, in line with the reinvestment
criteria. As at 31 December
2011, there were proceeds available for reinvestment of
euro 108 million, which has risen to
euro 137 million as of the date of
this release. As of the date of this release euro 11 million of the realised proceeds has been
committed.
EUROPEAN
CAPITAL LIMITED
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
As of 31
December 2011, 30 June 2011 and 31 December 2010
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December
2011
|
|
30 June
2011
|
|
31 December 2011 Versus
30 June 2011
|
|
31 December
2010
|
|
31 December 2011 Versus
31 December 2010
|
|
|
euro
|
|
euro
|
|
euro
|
|
%
|
|
euro
|
|
euro
|
|
%
|
|
|
(audited)
|
|
(unaudited)
|
|
|
|
|
|
(audited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at fair value (Cost basis of euro 1,555,191,
euro 1,638,416 and euro 1,721,230, respectively)
|
973,607
|
|
1,099,214
|
|
(125,607)
|
|
-11%
|
|
1,075,766
|
|
(102,159)
|
|
-9%
|
|
Cash and cash
equivalents
|
2,803
|
|
2,257
|
|
546
|
|
24%
|
|
3,006
|
|
(203)
|
|
-7%
|
|
Restricted cash and cash
equivalents
|
142,056
|
|
69,653
|
|
72,403
|
|
104%
|
|
21,380
|
|
120,676
|
|
NM
|
|
Interest receivable
|
5,496
|
|
7,848
|
|
(2,352)
|
|
-30%
|
|
5,282
|
|
214
|
|
4%
|
|
Derivatives agreements at fair
value
|
126
|
|
3,021
|
|
(2,895)
|
|
-96%
|
|
10,290
|
|
(10,164)
|
|
-99%
|
|
Other
|
4,529
|
|
6,522
|
|
(1,993)
|
|
-31%
|
|
8,316
|
|
(3,787)
|
|
-46%
|
|
Total assets
|
1,128,617
|
|
1,188,515
|
|
(59,898)
|
|
-5%
|
|
1,124,040
|
|
4,577
|
|
0%
|
|
Liabilities and Shareholder's
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (maturing within one year euro 2,356, euro 1,704 and
euro
224,742,
respectively)
|
439,017
|
|
429,685
|
|
9,332
|
|
2%
|
|
484,872
|
|
(45,855)
|
|
-9%
|
|
Due to European Capital
Financial Services
(Guernsey) Limited
|
1,439
|
|
1,818
|
|
(379)
|
|
-21%
|
|
1,351
|
|
88
|
|
7%
|
|
Derivatives agreements at fair
value
|
24,272
|
|
915
|
|
23,357
|
|
NM
|
|
3,283
|
|
20,989
|
|
NM
|
|
Other
|
37,153
|
|
41,266
|
|
(4,113)
|
|
-10%
|
|
5,458
|
|
31,695
|
|
NM
|
|
Total
liabilities
|
501,881
|
|
473,684
|
|
28,197
|
|
6%
|
|
494,964
|
|
6,917
|
|
1%
|
|
Shareholder's equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Capital
|
224,475
|
|
224,475
|
|
-
|
|
0%
|
|
224,475
|
|
-
|
|
0%
|
|
Undistributed net realised
earnings
|
1,078,718
|
|
1,087,988
|
|
(9,270)
|
|
-1%
|
|
1,064,903
|
|
13,815
|
|
1%
|
|
Net unrealised foreign
currency depreciation
|
(110,079)
|
|
(133,373)
|
|
23,294
|
|
17%
|
|
(98,147)
|
|
(11,932)
|
|
-12%
|
|
Net unrealised
depreciation of investments
|
(566,378)
|
|
(464,259)
|
|
(102,119)
|
|
-22%
|
|
(562,155)
|
|
(4,223)
|
|
-1%
|
|
Total shareholder's
equity
|
626,736
|
|
714,831
|
|
(88,095)
|
|
-12%
|
|
629,076
|
|
(2,340)
|
|
0%
|
|
Total liabilities and
shareholder's equity
|
1,128,617
|
|
1,188,515
|
|
(59,898)
|
|
-5%
|
|
1,124,040
|
|
4,577
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM = Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EUROPEAN
CAPITAL LIMITED
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Six Months
and Year Ended 31 December 2011 and 2010
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
|
Year ended
|
|
Year Ended
|
|
|
31 December
|
|
31 December
|
|
31 December
|
|
31 December
|
|
|
2011
|
|
2010
|
|
2011 Versus 2010
|
|
2011
|
|
2010
|
|
2011 Versus 2010
|
|
|
euro
|
|
euro
|
|
euro
|
|
%
|
|
euro
|
|
euro
|
|
euro
|
|
%
|
|
OPERATING
INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income
|
39,484
|
|
62,215
|
|
(22,731)
|
|
-37%
|
|
105,724
|
|
118,457
|
|
(12,733)
|
|
-11%
|
|
Fee and other
income
|
407
|
|
921
|
|
(514)
|
|
-56%
|
|
915
|
|
1,385
|
|
(470)
|
|
-34%
|
|
Total operating
income
|
39,891
|
|
63,136
|
|
(23,245)
|
|
-37%
|
|
106,639
|
|
119,842
|
|
(13,203)
|
|
-11%
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
13,584
|
|
17,728
|
|
(4,144)
|
|
-23%
|
|
26,471
|
|
46,492
|
|
(20,021)
|
|
-43%
|
|
Management fee
|
11,686
|
|
8,101
|
|
3,585
|
|
44%
|
|
22,666
|
|
17,313
|
|
5,353
|
|
31%
|
|
General and
administrative
|
1,015
|
|
3,006
|
|
(1,991)
|
|
-66%
|
|
4,718
|
|
6,370
|
|
(1,652)
|
|
-26%
|
|
Corporate restructuring
costs
|
-
|
|
(162)
|
|
162
|
|
100%
|
|
-
|
|
1,858
|
|
(1,858)
|
|
-100%
|
|
Total operating expenses
|
26,285
|
|
28,673
|
|
(2,388)
|
|
-8%
|
|
53,855
|
|
72,033
|
|
(18,178)
|
|
-25%
|
|
OPERATING INCOME BEFORE
INCOME TAXES
|
13,606
|
|
34,463
|
|
(20,857)
|
|
-61%
|
|
52,784
|
|
47,809
|
|
4,975
|
|
10%
|
|
Provision for income
taxes
|
(44)
|
|
(67)
|
|
23
|
|
34%
|
|
(88)
|
|
(146)
|
|
58
|
|
40%
|
|
NET OPERATING
INCOME
|
13,562
|
|
34,396
|
|
(20,834)
|
|
-61%
|
|
52,696
|
|
47,663
|
|
5,033
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realised loss on
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
NM
|
|
(8,240)
|
|
-
|
|
(8,240)
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realised loss on
investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio company
investments
|
(13,208)
|
|
(60,071)
|
|
46,863
|
|
78%
|
|
(28,826)
|
|
(52,225)
|
|
23,399
|
|
45%
|
|
Foreign currency
translations
|
(9,335)
|
|
5,756
|
|
(15,091)
|
|
-262%
|
|
(5,307)
|
|
22,786
|
|
(28,093)
|
|
-123%
|
|
Derivative
agreements
|
(289)
|
|
(180)
|
|
(109)
|
|
-61%
|
|
3,492
|
|
(435)
|
|
3,927
|
|
NM
|
|
Total net realised loss on
investments
|
(22,832)
|
|
(54,495)
|
|
31,663
|
|
58%
|
|
(30,641)
|
|
(29,874)
|
|
(767)
|
|
-3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET REALISED (LOSS)
EARNINGS
|
(9,270)
|
|
(20,099)
|
|
10,829
|
|
54%
|
|
13,815
|
|
17,789
|
|
(3,974)
|
|
-22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealised (depreciation)
appreciation on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio company
investments
|
(101,955)
|
|
93,393
|
|
(195,348)
|
|
-209%
|
|
(3,624)
|
|
89,354
|
|
(92,978)
|
|
-104%
|
|
Foreign currency
translations
|
23,294
|
|
(29,377)
|
|
52,671
|
|
179%
|
|
(11,932)
|
|
(4,965)
|
|
(6,967)
|
|
-140%
|
|
Derivative
agreements
|
(164)
|
|
1,252
|
|
(1,416)
|
|
-113%
|
|
(599)
|
|
2,400
|
|
(2,999)
|
|
-125%
|
|
Total net unrealised (depreciation) appreciation on investments
|
(78,825)
|
|
65,268
|
|
(144,093)
|
|
-221%
|
|
(16,155)
|
|
86,789
|
|
(102,944)
|
|
-119%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN
NET ASSETS RESULTING FROM
OPERATIONS ("NET
EARNINGS")
|
(88,095)
|
|
45,169
|
|
(133,264)
|
|
-295%
|
|
(2,340)
|
|
104,578
|
|
(106,918)
|
|
-102%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM = Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EUROPEAN
CAPITAL LIMITED
|
|
OTHER
FINANCIAL INFORMATION
|
|
Six Months
Ended 31 December 2011, 30 June 2011 and 31 December
2010
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
Six Months Ended
|
|
|
Six Months Ended
|
|
31 December 2011 Versus
|
|
|
|
31 December 2011 Versus
|
|
|
31 December 2011
|
|
30 June 2011
|
|
30 June 2011
|
|
31 December 2010
|
|
31 December 2010
|
|
|
euro
|
|
euro
|
|
euro
|
|
%
|
|
euro
|
|
euro
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated
debt
|
212
|
|
-
|
|
212
|
|
100%
|
|
-
|
|
212
|
|
100%
|
|
Convertible
Bond
|
223
|
|
6,300
|
|
(6,077)
|
|
-96%
|
|
-
|
|
223
|
|
100%
|
|
Preferred
Equity
|
-
|
|
10,053
|
|
(10,053)
|
|
-100%
|
|
555
|
|
(555)
|
|
-100%
|
|
Common Equity
|
2,874
|
|
-
|
|
2,874
|
|
100%
|
|
1,000
|
|
1,874
|
|
187%
|
|
Total
|
3,309
|
|
16,353
|
|
(13,044)
|
|
-80%
|
|
1,555
|
|
1,754
|
|
113%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add-on Financing for
Acquisitions
|
297
|
|
-
|
|
297
|
|
100%
|
|
-
|
|
297
|
|
100%
|
|
Add-on Financing for
Recapitalisations
|
3,012
|
|
16,353
|
|
(13,341)
|
|
-82%
|
|
1,555
|
|
1,457
|
|
94%
|
|
Total
|
3,309
|
|
16,353
|
|
(13,044)
|
|
-80%
|
|
1,555
|
|
1,754
|
|
113%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realisations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
Prepayments
|
47,688
|
|
75,824
|
|
(28,136)
|
|
-37%
|
|
90,888
|
|
(43,200)
|
|
-48%
|
|
Payment of Accrued
Payment-in-kind Interest and Dividends and
Original
Issue Discount
|
14,338
|
|
17,614
|
|
(3,276)
|
|
-19%
|
|
23,814
|
|
(9,476)
|
|
-40%
|
|
Sale of Equity
Investments
|
1,293
|
|
-
|
|
1,293
|
|
100%
|
|
17,138
|
|
(15,845)
|
|
-92%
|
|
Sale of Loans
|
15,992
|
|
21,046
|
|
(5,054)
|
|
-24%
|
|
1,558
|
|
14,434
|
|
NM
|
|
Total
|
79,311
|
|
114,484
|
|
(35,173)
|
|
-31%
|
|
133,398
|
|
(54,087)
|
|
-41%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation, Depreciation,
Gains and Losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Realised
Gains
|
419
|
|
-
|
|
419
|
|
100%
|
|
7,677
|
|
(7,258)
|
|
-95%
|
|
Gross Realised
Losses
|
(13,627)
|
|
(15,618)
|
|
1,991
|
|
13%
|
|
(67,749)
|
|
54,122
|
|
80%
|
|
Portfolio Net (Losses)
Gains
|
(13,208)
|
|
(15,618)
|
|
2,410
|
|
15%
|
|
(60,072)
|
|
46,864
|
|
78%
|
|
Foreign
Currency
|
(9,335)
|
|
4,028
|
|
(13,363)
|
|
-332%
|
|
5,756
|
|
(15,091)
|
|
-262%
|
|
Derivative
Agreements
|
(289)
|
|
3,781
|
|
(4,070)
|
|
-108%
|
|
(179)
|
|
(110)
|
|
-61%
|
|
Extinguishment of
debt
|
-
|
|
(8,240)
|
|
8,240
|
|
100%
|
|
-
|
|
-
|
|
100%
|
|
Net Realised
Losses
|
(22,832)
|
|
(16,049)
|
|
(6,783)
|
|
-42%
|
|
(54,495)
|
|
31,663
|
|
58%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Unrealised
Appreciation of Portfolio Investments
|
40,142
|
|
133,965
|
|
(93,823)
|
|
-70%
|
|
95,928
|
|
(55,786)
|
|
-58%
|
|
Gross Unrealised
Depreciation of Portfolio Investments
|
(158,510)
|
|
(53,870)
|
|
(104,640)
|
|
-194%
|
|
(63,491)
|
|
(95,019)
|
|
-150%
|
|
Reversal of Prior Period Unrealised (Depreciation) Appreciation
Upon
Realisation
|
16,413
|
|
18,236
|
|
(1,823)
|
|
-10%
|
|
60,957
|
|
(44,544)
|
|
-73%
|
|
Net Unrealised
Depreciation of Portfolio Investments
|
(101,955)
|
|
98,331
|
|
(200,286)
|
|
-204%
|
|
93,394
|
|
(195,349)
|
|
-209%
|
|
Foreign
Currency
|
23,294
|
|
(35,226)
|
|
58,520
|
|
166%
|
|
(29,377)
|
|
52,671
|
|
179%
|
|
Derivative
Agreements
|
(164)
|
|
(435)
|
|
271
|
|
62%
|
|
1,252
|
|
(1,416)
|
|
-113%
|
|
Net Unrealised
Depreciation of Investments
|
(78,825)
|
|
62,670
|
|
(141,495)
|
|
-226%
|
|
65,269
|
|
(144,094)
|
|
-221%
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
Net Gains, Losses,
Appreciation and Depreciation
|
(101,657)
|
|
46,621
|
|
(148,278)
|
|
-318%
|
|
10,774
|
|
(112,431)
|
|
-1044%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value
|
626,736
|
|
714,831
|
|
(88,095)
|
|
-12%
|
|
629,076
|
|
(2,340)
|
|
0%
|
|
Financial
Liabilities
|
439,017
|
|
429,685
|
|
9,332
|
|
2%
|
|
484,872
|
|
(45,855)
|
|
-9%
|
|
Asset Coverage
Ratio
|
243%
|
|
266%
|
|
|
|
|
|
230%
|
|
|
|
|
|
Debt to Equity
Ratio
|
0.7 x
|
|
0.6 x
|
|
|
|
|
|
0.8 x
|
|
|
|
|
|
Credit Quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Effective
Interest Rate on Debt Investments
|
6.5%
|
|
8.9%
|
|
-2.4%
|
|
-27%
|
|
8.8%
|
|
-2.3%
|
|
-25.9%
|
|
Loans on Non-Accrual at
Cost
|
244,947
|
|
199,985
|
|
44,962
|
|
22%
|
|
300,669
|
|
(55,722)
|
|
-19%
|
|
Loans on Non-Accrual at
Fair Value
|
39,940
|
|
65,190
|
|
(25,250)
|
|
-39%
|
|
77,180
|
|
(37,240)
|
|
-48%
|
|
Non-Accrual Loans at Cost
as a Percentage of Total Loans
|
23.0%
|
|
17.3%
|
|
|
|
|
|
23.8%
|
|
|
|
|
|
Non-Accrual Loans at Fair
Value as a Percentage of Total Loans
|
5.6%
|
|
7.8%
|
|
|
|
|
|
8.9%
|
|
|
|
|
|
Return on Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTM Net Operating Income
Return on Average Equity at Cost
|
4.2%
|
|
5.8%
|
|
|
|
|
|
3.7%
|
|
|
|
|
|
LTM Realised Earnings
Return on Average Equity at Cost
|
1.1%
|
|
0.2%
|
|
|
|
|
|
1.4%
|
|
|
|
|
|
LTM Earnings Return on
Average Equity
|
-0.4%
|
|
20.4%
|
|
|
|
|
|
18.0%
|
|
|
|
|
|
Current Half Year Net
Operating Income Return on Average Equity at
Cost
Annualised
|
2.2%
|
|
6.2%
|
|
|
|
|
|
5.4%
|
|
|
|
|
|
Current Half Year Realised
Earnings Return on Average Equity at Cost
Annualised
|
-1.5%
|
|
3.6%
|
|
|
|
|
|
-3.2%
|
|
|
|
|
|
Current Half Year Earnings
Return on Average Equity Annualised
|
-26.2%
|
|
25.2%
|
|
|
|
|
|
15.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM = Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EUROPEAN
CAPITAL LIMITED
|
|
STATIC POOL
INFORMATION
|
|
Portfolio
Statistics for Investments Made in Each of the Following
Years
|
|
(all numbers
in thousands of euro, unless otherwise stated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio
statistics (1) (15)
|
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
Aggregate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IRR at Fair Value of All
Investments (2) (14)
|
|
11.7%
|
|
5.1%
|
|
(2.3)%
|
|
2.0%
|
|
1.7%
|
|
IRR of Exited Investments
(3) (14)
|
|
14.4%
|
|
8.3%
|
|
(0.5)%
|
|
(0.5)%
|
|
5.6%
|
|
IRR at Fair Value of
Equity Investments only (2) (4) (5) (14)
|
|
4.9%
|
|
8.5%
|
|
(16.1)%
|
|
(60.1)%
|
|
(1.4)%
|
|
IRR of Exited Equity
Investments only (3) (4) (5) (14)
|
|
21.1%
|
|
18.8%
|
|
(45.1)%
|
|
0.0%
|
|
(16.4)%
|
|
IRR at Fair Value of All
One Stop Buyout® Investments (2) (14)
|
|
(24.7)%
|
|
10.0%
|
|
(21.6)%
|
|
|
|
(1.0)%
|
|
IRR at Fair Value of Current One Stop Buyout® Investments (2) (14)
|
|
(27.8)%
|
|
7.6%
|
|
(10.0)%
|
|
|
|
2.3%
|
|
IRR at Exited One Stop
Buyout® Investments (3) (14)
|
|
6.9%
|
|
16.9%
|
|
(100.0)%
|
|
|
|
(22.5)%
|
|
Committed Investments
(14)
|
|
240,673
|
|
1,236,637
|
|
1,511,315
|
|
333,927
|
|
3,322,552
|
|
Total Exits and
Prepayments of Comitted Investments (14)
|
|
223,645
|
|
899,917
|
|
643,314
|
|
83,041
|
|
1,849,917
|
|
Total Interest, Dividends
and Fees Collected (14)
|
|
81,216
|
|
179,371
|
|
307,136
|
|
72,244
|
|
639,967
|
|
Total Net Realised Gains
(Loss) on Investments
|
|
11,750
|
|
(55,611)
|
|
(65,397)
|
|
(27,797)
|
|
(137,055)
|
|
Current Cost of
Investments
|
|
17,111
|
|
405,847
|
|
877,308
|
|
254,925
|
|
1,555,191
|
|
Current Fair Value of
Investments
|
|
539
|
|
304,438
|
|
457,237
|
|
211,393
|
|
973,607
|
|
Current Fair Value of
Investments as a % of Total Investments
at Fair Value
|
|
0.1%
|
|
31.3%
|
|
47.0%
|
|
21.7%
|
|
100.0%
|
|
Net Unrealised
Depreciation (16)
|
|
(16,550)
|
|
(58,184)
|
|
(391,345)
|
|
(61,496)
|
|
(527,575)
|
|
Non-Accruing Loans at
Cost
|
|
9,212
|
|
13,860
|
|
210,323
|
|
11,552
|
|
244,947
|
|
Non-Accruing Loans at Fair
Value
|
|
-
|
|
2,127
|
|
31,435
|
|
6,378
|
|
39,940
|
|
Equity Interest at Fair
Value (4)
|
|
257
|
|
167,832
|
|
78,035
|
|
1,826.00
|
|
247,950
|
|
Debt to adjusted EBITDA
(4) (7) (8) (9) (12)
|
|
5.6
|
|
4.1
|
|
6.1
|
|
5.3
|
|
5.3
|
|
Interest Coverage
(4) (9) (12)
|
|
0.0
|
|
5.8
|
|
6.2
|
|
3.2
|
|
5.4
|
|
Debt Service Coverage
(4) (9) (12)
|
|
0.0
|
|
3.0
|
|
5.0
|
|
2.2
|
|
3.8
|
|
Average Age of Companies
(4) (12)
|
|
20
|
|
63
|
|
46
|
|
39
|
|
50
|
|
Diluted Ownership
Percentage (4) (13)
|
|
0.2%
|
|
61.9%
|
|
13.5%
|
|
0.3%
|
|
25.8%
|
|
Average Revenue (4)
(10) (12)
|
|
733,870
|
|
261,365
|
|
251,552
|
|
199,837
|
|
243,670
|
|
Average Adjusted EBITDA
(4) (7) (12)
|
|
134,266
|
|
32,112
|
|
45,383
|
|
37,802
|
|
39,635
|
|
Total Revenues (4)
(10)
|
|
1,202,092
|
|
5,850,669
|
|
13,271,151
|
|
1,325,965
|
|
21,649,877
|
|
Total Adjusted EBITDA
(4) (7)
|
|
205,301
|
|
626,848
|
|
2,318,982
|
|
241,752
|
|
3,392,883
|
|
% Senior Loans (4)
(9) (11)
|
|
0.0%
|
|
25.4%
|
|
35.5%
|
|
0.0%
|
|
25.2%
|
|
% Loans with Lien (4) (9)
(11)
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Majority Owned Portfolio
Companies ("MOPC") (6)
|
|
2005-2008
Static Pools
Aggregate
|
|
|
|
|
|
|
|
|
|
Number of MOPC
|
|
8
|
|
|
|
|
|
|
|
|
|
Total Revenues
(10)
|
|
633,966
|
|
|
|
|
|
|
|
|
|
Total Gross Profits
(10)
|
|
320,068
|
|
|
|
|
|
|
|
|
|
Total Adjusted EBITDA
(7)
|
|
83,988
|
|
|
|
|
|
|
|
|
|
Total Capital Expenditure
(10)
|
|
12,284
|
|
|
|
|
|
|
|
|
|
Total Current European
Capital Investment in MOPC At Fair Value
|
|
294,035
|
|
|
|
|
|
|
|
|
|
Diluted Ownership
Percentage of European Capital in MOPC (13)
|
|
74.6%
|
|
|
|
|
|
|
|
|
|
Total Cash
|
|
64,377
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
752,800
|
|
|
|
|
|
|
|
|
|
Total Debt
|
|
504,680
|
|
|
|
|
|
|
|
|
|
Total Third Party Debt at
Cost
|
|
368,323
|
|
|
|
|
|
|
|
|
|
Total Shareholders' Equity
at Fair Value
|
|
256,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Static pool classification is
based on the year the initial investment was made. Subsequent
add-on investments are included in the static pool year of the
original investment. There were no new investments made in
2009 to 2011.
|
|
(2)
|
Assumes investments are exited
at current US GAAP fair value.
|
|
(3)
|
Includes fully exited
investments of existing portfolio companies.
|
|
(4)
|
Excludes investments in
Structured Products.
|
|
(5)
|
Excludes equity investments that
are the result of conversions of debt and warrants received with
the issuance of debt.
|
|
(6)
|
Majority Owned Portfolio Company
("MOPC") investments represents investments in which European
Capital, or its affiliates, have a fully diluted ownership
percentage of 50% or more or has over 50% board
representation at the portfolio company.
|
|
(7)
|
Adjusted EBITDA may reflect
certain adjustments to the reported EBITDA of a portfolio company
for non-recurring, unusual or infrequent items or other pro-forma
items or events to normalize current earnings which a buyer may
consider in a change in control transactions. These
adjustments may be material and are highly subjective in nature.
Portfolio company reported EBITDA is for the most recently
available twelve months, or when appropriate, the forecasted twelve
months or current annualized run-rate
|
|
(8)
|
For portfolio companies with a
nominal Adjusted EBITDA amount, the portfolio company's maximum
debt leverage is limited to 15 times Adjusted EBITDA.
|
|
(9)
|
Excludes investments in which we
own only equity.
|
|
(10)
|
For the most recent twelve
months, or when appropriate, the forecasted twelve
months.
|
|
(11)
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As a percentage of our total
debt investments.
|
|
(12)
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Weighted average based on fair
value.
|
|
(13)
|
Weighted average based on fair
value of equity investments.
|
|
(14)
|
Non euro-denominated amounts are
retranslated at the exchange rate ruling at the date of original
investment.
|
|
(15)
|
Non euro-denominated balances,
other than those referred to in (14), are retranslated at the
exchange rate ruling at the balance sheet date.
|
|
(16)
|
Balance Sheet appreciation
(depreciation) of investments excluding foreign exchange
revaluation.
|
|
|
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IMPORTANT DISCLOSURES
NAV
Any valuation information relating to the portfolio companies of
European Capital stated or referred to in this release has been
determined by the Board of European Capital in good faith, on a
basis consistent with past practice and for the purposes of
complying with its reporting obligations under applicable laws.
Forward-looking statements
This document may contain "forward-looking statements." By
their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Many of these risks and uncertainties relate to factors
beyond European Capital's control or which cannot be estimated
precisely. These factors include, but are not limited to,
uncertainties associated with the timing of transaction closings,
changes in interest rates, availability of transactions, changes in
regional, national or international economic conditions, and
changes in the conditions of the industries in which European
Capital has made investments. Actual outcomes and results may
therefore differ materially from any outcomes or results expressed
or implied by any such forward-looking statements.
Performance data quoted above represents past performance of
European Capital. Past performance does not guarantee future
results and the investment return and principal value of an
investment in European Capital will likely fluctuate.
Additionally, European Capital's current performance may be
lower or higher than the performance data quoted above.
Basis of preparation
This interim management statement has been prepared to provide
further transparent information about European Capital and should
not be relied on by any person for any other purpose. Certain
financial information in this interim management statement is based
on unaudited management accounts. Nothing in this document is
intended to be, or should be construed as, a profit forecast.
ABOUT EUROPEAN CAPITAL
European Capital is an investment company for pan-European
equity, mezzanine and senior debt investments with euro 1.0 billion in assets under management.
European Capital is a wholly-owned affiliate of American
Capital, Ltd ("American Capital"). It is managed by European
Capital Financial Services (Guernsey) Limited ("ECFSG" or the
"Investment Manager"), a wholly-owned affiliate of American
Capital. The Investment Manager has offices in London and Paris. As of 31
December 2011 the Investment Manager had 5 investment teams
with 20 investment professionals and employed 26 support staff.
European Capital and its affiliates will consider senior and
mezzanine debt investment opportunities from 5 million to 40
million in either euros or sterling and up to 100 million for One
Stop Buyouts®. For further information, please refer to
www.EuropeanCapital.com.
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded private equity firm and
global asset manager. American Capital, both directly and
through its asset management business, originates, underwrites and
manages investments in middle market private equity, leveraged
finance, real estate and structured products. Founded in
1986, American Capital has $68
billion in assets under management and seven offices in the
U.S. and Europe American
Capital and its affiliates will consider investment opportunities
up to $300 million. For further
information, please refer to www.AmericanCapital.com.
Contact: European Capital Financial Services
Limited
+ 44 207 539 7000
Ira Wagner, President
Juan Carlos Morales Cortes,
Director
Richard Smith, Finance Director
SOURCE European Capital Limited