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Consolidated Financial Report |
DIRECTORS’ REPORT
2014 Annual Report
Prysmian Group
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FINANCE AND M&A ACTIVITIES
On 18 December 2013, Prysmian S.p.A. entered into a loan
agreement with the European Investment Bank (EIB) for
Euro 100 million, to fund the Group's European Research &
Development (R&D) programmes over the period 2013-2016.
The EIB Loan is particularly intended to support projects
developed in the Group's R&D centres in six countries (France,
Great Britain, the Netherlands, Spain, Germany and Italy) and
represents about 50% of the Prysmian Group's planned in-
vestment expenditure in Europe during the period concerned.
The EIB Loan was received on 5 February 2014; it will be repaid
in 12 equal half-yearly instalments starting on 5 August 2015
and ending on 5 February 2021.
On 19 February 2014, Prysmian S.p.A. signed a credit
agreement for Euro 100 million (the "Revolving Credit Facility
2014") with Mediobanca - Banca di Credito Finanziario S.p.A..
Under this five-year agreement, Mediobanca has provided the
Group with a line of credit intended to refinance existing debt
and working capital requirements.
On 28 February 2014, the Prysmian Group prepaid the out-
standing balance owed under the Term Loan Facility 2010,
amounting to Euro 184 million that had been due on 31
December 2014.
On 27 June 2014, Prysmian S.p.A. signed an agreement (the
"Credit Agreement 2014") under which a syndicate of premier
banks made available a long-term credit facility for Euro 1,000
million (the "Syndicated Revolving Credit Facility 2014"). The
facility, which expires on 27 June 2019, can also be used for the
issue of guarantees. The new revolving facility is intended to
refinance the Revolving Credit Facility 2010 and to finance the
Group's other operating activities.
On the same date as agreeing this new facility, Prysmian
S.p.A. extinguished early the Revolving Credit Facility 2010,
originally due to expire on 31 December 2014 and carrying a
maximum permitted drawdown of Euro 400 million.
Acquisition purchase price adjustment: Global Marine
Systems Energy Ltd (now renamed Prysmian
PowerLink Services Ltd)
The purchase price adjustment process relating to the acqui-
sition of Global Marine Systems Energy Ltd (now renamed
Prysmian PowerLink Services Ltd) was completed on 28
March 2014, with a price adjustment of GBP 20 million in the
Prysmian Group's favour. Since this process was completed
more than a year from the acquisition date of 15 November
2012, the difference between the adjusted final price and that
previously estimated has been accounted for in the income
statement with the recognition of Euro 22 million in non-re-
curring income.
Acquisition of non-controlling interest
in AS Draka Keila Cables
On 9 July 2014, Prysmian Group finalised the acquisition of
the remaining 34% of the subsidiary AS Draka Keila Cables,
becoming the sole shareholder of this Estonian company. The
purchase price was Euro 6.2 million. The investment in Keila
Cables will allow the Group to further accelerate its growth
strategy in this high-potential region.
Stock listing of the joint venture Yangtze Optical Fibre
and Cable Joint Stock Limited Company
On 1 August 2014, Yangtze Optical Fibre and Cable Joint Stock
Limited Company, based in Wuhan (People's Republic of
China) and in which the Group held a 37.5% interest, filed an
application to list its shares on the Main Board of the Hong
Kong Stock Exchange.
The company is a joint venture between the Prysmian Group
and two other partners (China Huaxin Post and Telecom-
munications Economy Development Center and Wuhan
Yangtze Communications Industry Group Co. Ltd., with equity
interests of 37.5% and 25% respectively) and specialises in
the production of optical fibre and optical cables for telecom-
munications.
The prospectus for the public offering and the listing of the
company's shares was published on 26 November 2014 upon
completion of the authorisation process.
Following closure of the offering period, the company's shares
commenced trading on the Main Board of the Hong Kong
Stock Exchange on 10 December 2014. The offering involved
an increase in the company's share capital, with a consequent
dilution of the Prysmian Group's holding to 28.12%. This
dilution has resulted in the recognition of a non-recurring
gain of Euro 8 million.
Share buy-back
Under the share buy-back and disposal programme autho-
rised by the shareholders at their meeting on 16 April 2014,
Prysmian S.p.A. purchased a total of 1,390,000 treasury
shares during the months of November and December 2014
at a cost of approximately Euro 20 million.
In 2014, Prysmian signed an agreement under which a syndicate of premier banks made
available a long-term credit facility for Euro 1,000 million.