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OTHER SIGNIFICANT EVENTS
Western HVDC Link Contract (UK)
During the last few days of April 2014, the manufacture of
the cables for the Western HVDC Link project in the United
Kingdom encountered some technical problems, which were
duly placed under detailed technical investigation.
Following tests on the quality of the cable produced and
analysis of the materials and the manufacturing process, the
Directors felt able to make a reliable estimate of the project's
revenues and costs.
The total impact on the 2014 results has been Euro 53 million,
resulting from the full elimination of the margins previously
recognised on the contract and the recognition of a provision
to cover the expected contract loss.
Including non-recognition of the margin originally expected on
this project in the period, the overall negative impact of the
Western HVDC Link (UK) project on the 2014 results is Euro
94 million.
Plant closures
On 6 July 2014, the Management Board of Prysmian Nether-
lands informed trade union representatives of the intention
to close the plant in Amsterdam - 78 employees - and transfer
production to the plants in Delft and Emmen. Agreements
for the plant's closure have been reached, with the process of
shutdown currently in progress and due to last for part of 2015.
On 16 July 2014, Draka Paricable (France) initiated a consul-
tation process with the trade unions for the closure of the
Aubevoye plant - 92 employees - and the transfer of production
to the Group’s plants in Amfreville and Gron. The process of
discussions with the unions and the related agreements was
completed by the end of 2014, as well as the plant's closure.
These plant closures are in response to the need to optimise
manufacturing footprint at individual country level, with the
aim of realigning industrial presence with the potential of
the relevant business/market and of improving production
capacity utilisation, as well as overall economic performance,
through economies of scale.
Consequent impairment testing of the assets of the plants
involved in this restructuring has not resulted in the recog-
nition of any impairment losses. Other restructuring costs
have been estimated based on the outcome of negotiations
with the trade unions; at 31 December 2014, these costs were
recognised as far as could be reasonably estimated. Further
details can be found in Note 14. Provisions for risks and
charges.
AMT Explorer cable barge
On 3 July 2014, the AMT Explorer cable barge, chartered to
transport power cables for the Deutsche Bucht and Butendiek
offshore wind farms in Germany, capsized while under tow in
transit from Arco Felice (Naples) to Bremenhaven (Germany).
The rotating platform owned by the Prysmian Group and its
load sank as a result. The value of the cables transported,
unrecoverable given the depth of the water in the area of
the sinking, amounted to approximately Euro 28 million.
The lost cables were fully insured and as at 31 December
2014 Prysmian PowerLink S.r.l. had collected the full amount
of the loss claimed from the insurers. At 31 December 2014,
the value of the rotating platform has been written off in full
(Euro 5 million) and an insurance reimbursement for the same
amount has been recognised.
Prysmian and TenneT, the partner in the wind farm projects,
are working to avoid any consequences that could affect the
project execution timetable.
Second cycle of Group employee share purchase
plan (YES Plan)
During the month of December 2014, employees were
informed of the opening of the plan's second cycle in 2015.
Employees had until the third week of February 2015 to sign
up for the second cycle and to communicate the amount they
intended to invest. The total amount collected will be used to
make purchases of the Company's shares on the Milan Stock
Exchange (MTA) during the month of July 2015.