Subsequent to allotment of these shares, the Company did not
fulfill certain conditions stipulated in share purchase agreements.
In particular, it had not completed the listing on the London AIM
as well as it had not completed the purchase of certain properties
for development. Under those circumstances, share purchase
agreements require the Company and the investors to take all
necessary steps to unwind the purchase of the shares by the
investors. The Board of Directors of the Company made a call on
unpaid shares by sending the necessary notices to investors.
Further to the investors' non-compliance with the notices and
non-payment of the consideration for the issue of the shares, on 16
April 2013 the Board of Directors of the Company initiated the
procedure for the forfeiture of the shares in question. It was
expected that upon completion of the forfeiture of the shares
issued to the new investors, the Company's Board of Directors will
make its decision with regards to the disposal of the shares
forfeited as it deemed appropriate and in the interests of the
Company. Thus, as at 31 December 2012 the effect related to
forfeiture of the shares was recognised in other reserves within
equity. Subsequently, in accordance with the decision of the Board
of Directors of the Company, dated 25 May 2013, unpaid shares were
legally forfeited, which resulted in a decrease in share capital by
USD 13 thousand, share premium by USD 69,987 thousand and increase
in other reserves by USD 70,000 thousand.
Further, as part of the initial public offering (IPO) of the
Company's shares at London AIM, on 20 July 2013 the Shareholders
approved the increase of the Company's authorised share capital to
EUR 53,000 (or USD 68,564) divided into 106,000,000 ordinary shares
of nominal value EUR 0.0005 each.
On 12 September 2013 the Company was admitted for trading on
London AIM. As a result of the IPO, the Company placed 38,650,637
ordinary shares for the total amount of USD 93,759 thousand.
28,350,214 ordinary shares were transferred to entities under
common control as consideration for acquired subsidiaries at a fair
value of USD 66,056 thousand (see note 1(a)) and 10,300,423
ordinary shares that were settled in cash at a price of USD 2.33
per share. Cash proceeds from placement of 10,300,423 ordinary
shares, net of direct costs related to the IPO process of USD 1,757
thousand, amounted to USD 22,243 thousand.
Call option agreement with ELQ Investors II Ltd.
On 14 July 2011 the Company entered into a transaction pursuant
to which ELQ Investors II Ltd., a wholly-owned subsidiary of the
Goldman Sachs Group Inc, provided the Company with convertible
loans in the maximum amount of up to USD 40 million at an interest
rate of 11.5% per annum. Out of the maximum amount, USD 30 million
were provided to the Company. The funds were used by the Company to
provide a loan (with an initial interest at 11.85% p.a.) to Weather
Empire Limited (a special purpose vehicle incorporated in the
British Virgin Islands) in order to purchase 1,077 shares (or
16.67% of subscribed share capital) in the Company from Retail Real
Estate S.A.
As part of the transaction, ELQ Investors II Ltd. received one
Initial Arricano Share. The shares purchased by Weather Empire
Limited were held under escrow by a Cypriot escrow agent, Themis
Professional Services Limited. In accordance with a call option
agreement, from 14 July 2011 ELQ Investors II Ltd. obtained the
right to receive the entire issued capital of Weather Empire
Limited, which in turn held the 1,077 ordinary shares of the
Company, for USD 1. However, the conversion right expired in July
2013 and accordingly the loan due to ELQ Investors II Ltd became
repayable.
In July 2013, the Company entered into a settlement and release
deed, in accordance with which related parties of the Group and UBS
AG agreed to settle the Company's indebtedness due to ELQ Investors
II Ltd. Simultaneously, the Company concluded two loan agreements
with these related parties amounting to USD 36,974 thousand in
total. One loan amounting to USD 8,475 thousand was repaid on 20
September 2013. As at 31 December 2013, the loan amounting to USD
28,500 thousand was payable on demand by 17 December 2014 at the
latest. Also, the Company issued an the irrevocable guarantee to
UBS AG securing the repayment of the loan obtained by the related
party for the amount of USD 28,800 thousand and the interest
accrued thereon. During six months ended 30 June 2014, the Group
signed an amended loan agreement with this related party,
stipulating a decrease of the loan principal to USD 15,300 thousand
and prolongation of the final repayment date until 17 August 2018,
although the loan remains payable on demand in accordance with the
contractual terms of the loan agreement (refer to note 12).
Accordingly, the amount secured by the irrevocable guarantee issued
to UBS AG was decreased to USD 15,300 thousand, plus interest
accrued thereon and other specified costs related to the loan
facility provided by UBS AG (refer to note 22 (c)(ii)).
Foreign currency translation differences
Foreign currency translation differences comprise foreign
currency differences arising from the translation of the financial
statements of foreign operations and foreign exchange gains and
losses arising from monetary items that form part of the net
investment in the foreign operation.
Other reserves
Other reserves represent the cumulative change in ownership
interests in subsidiaries resulting from acquisitions and disposals
of subsidiaries under common control, and the effect of forfeiture
of shares.
Earnings per share
The calculation of basic earnings per share for the six-month
period ended 30 June 2014 was based on the profit for the period
ended 30 June 2014 attributable to ordinary shareholders of USD
9,023 thousand and a weighted average number of ordinary shares
outstanding of 103,270,637.
The calculation of basic earnings per share for the six-month
period ended 30 June 2013 was based on the loss for the period
ended 30 June 2013 attributable to ordinary shareholders of USD
3,514 thousand and a weighted average number of ordinary shares
outstanding of 106,000,000. As described above, on 20 July 2013 the
Shareholders of the Parent Company approved the increase of the
Company's authorised share capital to EUR 53,000 divided into
106,000,000 ordinary shares of nominal value EUR 0.0005 each.
Accordingly, the change in the quantity of the issued shares on 20
July 2013 was taken into account in the calculation of the weighted
average number of shares for all periods presented in these
consolidated interim condensed financial statements.
The Group has no potential dilutive ordinary shares.
11 Loans and borrowings
This note provides information about the contractual terms of
loans. For more information about the Group's exposure to interest
rate and foreign currency risk, refer to note 22.
30 June 31 December
2014 2013
(unaudited)
(in thousands of USD)
Non-current
Secured bank loans 53,855 62,391
53,855 62,391
Current
Secured bank loans (current portion of
secured long-term bank loans) 12,484 10,277
Unsecured loans from related parties 29,331 30,309
Unsecured loans from third parties 38 37
41,853 40,623
95,708 103,014
The movement in loans and borrowings during the six months ended
30 June 2014 was as follows:
Carrying
(in thousands of USD) value
Balance at 1 January 2014 103,014
Receipts (unaudited)
Loans from related parties 13,156
Total receipts (unaudited) 13,156
Repayments (unaudited)
OJSC "Bank "St.Petersburg" (1,027)
EBRD (4,572)
Raiffeisen Bank Aval (821)
Loans from related parties (13,500)
Total repayments (unaudited) (19,920)
Interest and restructuring fees
Accrued (unaudited) 5,938
Repaid (unaudited) (6,364)
Effect of foreign currency translation (unaudited) (116)
Balance at 30 June 2014 (unaudited) 95,708
Terms and debt repayment schedule
As at 30 June 2014, the terms and debt repayment schedule of
bank loans are as follows (unaudited):
Contractual year of
(in thousands of USD) Currency Nominal interest rate maturity Carrying value
Secured bank loans
Raiffeisen Bank Aval USD 10.75% 2020 13,465
Oshchadbank USD 11.50% 2020 10,061
EBRD USD 3M LIBOR + 6.50% 2018 18,874
Bank "St. Petersburg" USD 10.50% 2020 23,939
66,339
Unsecured loans from related
parties
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