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Financial structure

Our solid financial structure allows us to continue to sustain the Group’s ambitious growth projects

(€ thousands)

06/30/2019

12/31/2018(*)
Net medium and long-term financial indebtedness 812,211 877,688
Net short-term financial indebtedness 157,655 53,083
Cash and cash equivalents -128,799 -89,915
Net financial indebtedness 841,067 840,856
Group net equity 624,417 594,919
Minority interests 1,129 1,028
Net equity 625,546 595,947
Financial indebtedness/net equity 1.34(**) 1.24(***)
Financial Indebtedness/Ebitda 2.23(**) 3.11(***)

(*) 2018 Balance Sheet data has been revised for provisional allocation of the GAES acquisition price.

(**) Indicators re-defined together with banks and financial investors after the adoption of IFRS 9, IFRS 15 and IFRS 16, determining the covenants Financial indebtedness/Net equity at 1.65x (before 1.5x) and Financial indebtedness/EBITDA at 2.85x (before 3.5x).

(***) Indicators calculated in compliance with the previous definitions included in the syndacated loan for the GAES acquisition, before the adoption of IFRS 9, IFRS 15 and IFRS 16.

 

 

(€ millions)

2019

2020

2021

2022

2023 and
beyond

Total

Private Placement

 

-15.5

 

 

-85.4

-100.9

Bank loans

-3.3

-6.8

-151.6

-58.3

  -220.0

Financing for GAES acquisition

-13.2

-39.8

-39.8

-79.5

-344.5 -516.8

Bank overdraft

-104.0

 

 

 

 

-104.0

Others

-11.4

-3.3

-0.5

-13.0

 

-28.2

Cash and cash equivalents

128.8

 

 

 

 

128.8

Total

-3.1

-65.4

-191.9

-150.8

-429.9

-841.1

  • Covenant

    The following loans:

     

    • the USD 130 million private placement 2013-2025 (equal to €100.9 million including the fair value of the currency hedges which set the €/USD exchange rate at 1.2885);
    • the EUR 200 million medium/long-term bilateral loans with top-tier banks;
    • the EUR 195 million in medium/long-term revolving irrevocable credit lines with top-tier banks, of which EUR 20 million received at 30 June 2019,

     

    are subject to the covenants listed below:

     

    • the ratio of Group net financial indebtedness to Group equity must not exceed 1.65;
    • the ratio of net financial indebtedness to EBITDA recorded in the last four quarters (determined excluding the fair value of the share-based payments and based only on recurring business and restated if the Group’s structure should change significantly) must not exceed 2.85.

     

    In the event of relevant acquisitions, the above ratios may be increased to 2.20 and 3.26 respectively, for a period of not more than 12 months, 2 times over the life of the respective loans.

     

    The syndicated loan granted for the GAES acquisition, amounting to €530 million, is subject to the following covenants:

     

    • the ratio of net financial indebtedness to EBITDA recorded in the last four quarters (determined excluding the fair value of the share-based payments and based only on the recurring business and restated if the Group’s structure should change significantly) must not exceed 3.26 through 30 June 2019 and 2.85 in the following periods;
    • the ratio of EBITDA recorded in the last four quarters (determined excluding the fair value of the share-based payments and based only on the recurring business and restated if the Group’s structure should change significantly) and net interest paid in the last 4 quarters must exceed 4.9. As this last covenant is more restrictive it also applied to the private placement.

     

    Following the recent introduction of the new standards IFRS 9, 15 and 16, which resulted in significant adjustments to the amounts recognized in the financial statements, Amplifon re-defined the covenants with banks and financial investors in order to preserve the same headroom for Amplifon and the same protection level to lenders.