Italeaf SpA, following the press release issued on 14 June 2018 on the dissemination of the reports of the independent auditors EY SpA accompanying the consolidated annual financial report as at and for the year ended 31 December 2017 and the separate financial statements as at and for the year ended 31 December 2017 of Italeaf SpA, hereby announces that:
- The Independent Auditors acknowledge that the directors of Italeaf, in the note “Assessments on the going concern” report that on April 16, 2018 was approved by the subsidiary TerniEnergia S.p.A. a new recovery plan and relaunch for the period 2018-2022. TerniEnergia S.p.A., main asset of the Italeaf Group, outlines a path towards achieving a balanced economic, equity and financial position;
- in regard to this Plan, the Independent Auditors points out that there are, however, still many and significant profiles of uncertainty on the capacity of the TerniEnergia Group to continue to operate as a going concern related to (i) the actual ability of the Group to achieve the liquidity required by the recovery plan through the disposal of assets, (ii) the effective achievement of operating and economic-financial results substantially in line with the forecasts of growth in revenues and margins of the Smart Solution and Service business, (iii) the ability of the TerniEnergia Group to finalise positively the contacts in progress with the financing institutions to obtain the moratoria and renegotiate the financial debts and to complete the complex procedures necessary to reschedule the existing bond;
- due to uncertainties related to the ability of the subsidiary TerniEnergia S.p.A. to generate cash flows, as well as uncertainties related to the outcome of extraordinary transactions aimed at the sale of industrial areas and buildings owned by Italeaf, functional to the recovery from the current bank debt-exposure, the independent auditors EY SpA notes that the assumption of business continuity is subject to many significant uncertainties with potential interactions and possible cumulative effects on the financial statements;
- for these reasons, the reports of the auditing firm EY conclude that it is impossible to issue an opinion on the financial statements as at 31 december 2017.
- The Independent Auditors EY also included in their report a reference to Information for the Shareholders of Italeaf SpA on the explanatory note “Assets held for sale” of the consolidated financial statements as at December 31, 2017, which describes, among other things, the reasons on the basis of which the directors consider receivables totalling Euro 9 million claimed by the subsidiary TerniEnergia S.p.A. from the purchasers of some of its subsidiaries sold during 2014 to be recoverable. In particular, the directors report that the disposals of these equity investments are transactions with L&T City Real Estate Ltd (in relation to the sale of Solter S.r.l. and Energia Alternativa S.r.l.) and Ranalli Immobiliare S.r.l. (for the sale of the company Soltarenti S.r.l.), companies referable to a lawyer who has judicial assignments from the same subsidiary TerniEnergia S.p.A., as well as indirect shareholder of the same; in particular, on March 12, 2018 the subsidiary TerniEnergia S.p.A. and the above mentioned parties signed a deed of fulfilment of the termination conditions with the consequent repurchase by the Group of control of these companies, instrumental to a sale of the same to third parties, under a complex transaction of establishment of a newco and contribution of assets, details of which are provided in the notes. This will make it possible to offset the credit of Euro 9 million and to collect the proceeds from the a new sale, currently being defined, for some of the assets held for sale and estimated at approximately Euro 6 million.
The Reports of the Independent Auditors are available to the public at the Company’s registered office and on the Company’s website www.italeaf.com in the Investor Relations/Shareholders’ Meetings section, where the Consolidated Annual Financial Report as at 31 December 2017 and the Separate Financial Statements as at 31 December 2017 of Italeaf SpA are available too.