SWMTL HOLDING AG IN LIQUIDATION SWMTL Group Information
Half-year 2015
30 September 2015
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PRELIMINARY REMARKS
On the General Meeting held on 30 June 2015 Jean-Paul Periat and Viktor Huser were reconfirmed as board members and as liquidators of the company for another term. Jean-Paul Periat has been elected by the General Meeting as Chairman of the Board.
The Board of Directors of Swmtl Holding Ltd. in liq. is continuing working on winding down the company and, in doing so, aspiring to realize the value of its assets in the best achievable way.
For the shareholders, everything depends on the best possible realization of the remaining assets and of the result of the liquidation of Weidenareal Metall Ltd. in Nachlassliquidation ('WAM' or 'Weidenareal'). Subject to the recognition of the Swmtl claim to the 'Kollokationsplan', the company may experience a partial or full repayment on the basis of its creditor position at Weidenareal. However, should the claim eventually not be recognised by the creditors committee ('Gläubigerausschuss') of Weidenareal, then the bankruptcy judge will have to be notified. As per information available, the Kollokationsplan will be released in the coming months.A partial repayment appears to be likely on the basis of the Board's current knowledge.
In considering the remaining shareholders equity, the main challenge to the Board of Directors and liquidators in ensuring the continuation of the liquidation will be to strictly manage the disbursements and finally the liquidity. Currently Swmtl is not invol ved in acti ve or passi ve legal cases, however should one or more of the creditors initiate a legal case and/ or the claim toward Weidenareal not be allocated by the liquidator and the creditor's committee, then the continuation of the liquidation could be seriously jeopardized. Due to the high variance of possible outcomes, it is impossible to make a concrete estimate of the financial outcome of the liquidation process of Swmtl Holding Ltd. in liq.
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BASIS FOR THE CONSOLIDATED INCOME STATEMENT, BALANCE SHEET AND CASH FLOW STATEMENT AND CHANGES AFFECTING GROUP COMP ANIES
These unaudited statements have been prepared in accordance with Swiss GAAP FER 31. The consolidation and valuation principles correspond to those of the annual report. Fixed assets have been valued on a liquidation basis. Naturally, the actual realization values depend on future developments in the liquidation process. There remains an inevit able uncertainty about these values and the amounts accrued for. The Board of Directors and the liquidators are convinced that the estimates made represent the best estimates possible.
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CONSOLIDATED INCOME STATEMENT
Consolidated income statement (unaudited) 2015
(6 Months)
2014
(6 Months)
CHF 000
Operating and administrative expenses -15 -9
Operating income before depreciation (EBITDA) - before extraordinary result -15 -9Depreciation on intangible assets --
Operating income (EBIT) -15 -9Financial result -9 -9
Ordinary result -23 -18Non-operating and extraordinary result -3 1'937
Earnings before taxes (EBT) -27 1'919Income taxes - -
Result for the year (EAT) -27 1'919The extraordinary result of TCHF 3 is mainly due to lower than expected capital taxes of TCHF 42 and accordingly the account payables to the tax authorities have been adjusted and of TCHF 45 of retroacti ve interests on the payables claimed by a former Member of the Executi ve Management. The CHF 1.93 million in the previ ous reporting period relates almost entirely to the waiver received by AV International Ltd. in liq.from Weidenareal in accordance with thestand-still agreement agreed.
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CONSOLIDATED BALANCE SHEET
Consolidated balance sheet (unaudited) 30.06.2015
31.12.2014
CHF 000
Current Assets
586
654
Intangible and financial assets
7'344
7'429
Total assets
7'930
8'083
Short-term liabilities
7'896
8'022
Total liabilities
7'896
8'022
Shareholders' equity
34
61
Total liabilities and shareholders' equity
7'930
8'083
Intangible and financial assets as at 30 June 2015 of CHF 7.34 million consist of claims relating to:the insolvency proceedings of Swissmetal Busch-Jaeger GmbH, Lüdenscheid, in the amount of CHF 0.51 million, and
the expected repayment of the current account with Weidenareal of CHF 0.68 million. The amount includes CHF 0.11 million relating to the claim for an employment agreement compensation claimed by a former Member of the Executive Management . The amounts were adjusted to reflect the expected repayment in the context of the liquidation quota of the subsidiary. There exists an uncertainty regarding the valuation, as proceeds from the amount due from WAM depends on the outcome of the liquidation, and
a bank for a guarantee commitment of CHF 20.0 million securing a mortgage provided to Weidenareal in the remaining amount of CHF 6.14 million. In 2014, the outstanding amount of the mortgage has been fully repaid - subject to the creditor's rights - to the bank by the subsidiary. However, Swmtl was not formally released from the guarantee as the bank is of the opinion that there still exists an uncertainty relating to the inherent claim of recovery.Accordingly the liabilities and the related receivable from the deconsolidated entity did not decrease in the extent of the paid amount.
The short term liabilities as at 30 June 2014 in the order of CHF 7.84 million encompassCHF 6.14 million for the claim of a bank arising from the guarantee commitment and a provision of CHF 0.51 million for the remaining potential exposure toward the same institute, and
an accrual for expected costs of liquidation of CHF 0.06 million, and
accruals of CHF 0.15 million for unpaid compensation to the Board of Directors. There exists an uncertainty regarding the valuation of the accruals forunpaid compensation to the former Board of Directors, as the amount due fromWeidenareal depends on the outcome of the liquidation.
CHF 0.20 million are owed to creditors for services and goods provided (the decrease of TCHF 40 compared to the previous reporting period is due to lower than expected capital taxes) and
CHF 0.34 million for a compensation to a member of the Board leavi ng 10 May 2013 arising from his past contractual agreement and of
a liability of CHF 0.5 million (including CHF 0. 08 million of accrued social security and pension plan contributions and CHF 0.05 of accrued interests) arising from a contractual compensation claimed by a former Member of the Executive Management.
Statement of Changes in Shareholders' EquityShare capital
Capital reserves1
Retained earnings2
Total3
CHF 000
Balance as at 31 December 2013
59'617
34'226
-95'623
-1'780
Result for the 1sthalf-year 2014
-
-
1'919
1'919
Balance as at 30 June 2014
59'617
34'226
-93'704
139
Balance as at 31 December 2014
59'617
34'226
-93'782
61
Result for the 1sthalf-year 2015
-
-
-27
-27
Balance as at 30 June 2015
59'617
34'226
-93'809
34
1 Includes retained statutory reserves and shareholders' equity transaction costs
2 Includes the profits from the initial and subsequent consolidation, unappropriated retaines earnigs, the effect from the first time application of Swiss GAAP FEER on pension Plan and the result of the period
3 since 2010, there are no minority interests
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CONSOLIDATED CASH FLOW STATEMENT
First half-year (unaudited)
CHF 000 2015
2014
Cash flow before change in net current assets -43
1'919
Change in net current assets -25 -2'005
Cash flow from operating activities -68
-86
Total cash flow from investing activities -
-
Free cash flow -68
-86
Net change in cash and cash equivalents -68
-86
Cash and cash equivalents as at 1 January 654
Cash and cash equivalents as at 30 June 586
809
723
The Group generated an operating cash drain of CHF 0.07 million in the fi rst six months 2015 mainly relating to the decrease in net current assets.
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EVENTS OCCURING AFTER THE BALANCE SHEET DATE
In September 2015, the claim in the amount of TCHF 0.57 milliontoward Weidenareal have been recognized by the creditorscommittee to the 'Kollokationsplan'. The amount represents theliquidation quota of 25 % officially communicated, however the timing of the payment remains unknown. The decisionto collocate/recognise or not the remaining amount of CHFCHF 0.11 million relating to the claim for an employment agreement compensation claimed by a former Member of the Executive Management have been temporarily suspended as there are paulian
actions ('Paulianische Anfechtungskeitsklagen') of Weidenareal.
Accordingly, there still exists an uncertainty regarding the valuation, as proceeds from the amount due from WAM depends on the final outcome of the liquidation.
Subject to the recognition of the Swmtl claim to the 'Kollokationsplan', the company may experience a partial or full repayment on the basis of its creditor position at Weidenareal.
- OUTLOOK
For the shareholders, everything depends on the best possible realization of the assets and of the result of the liquidation of Weidenareal. In considering the liquidation quota of 25 %, the Board of Directors of Swmtl regards a transfer of shareholders' funds from Weidenareal in debt restructuring liquidation to Swmtl (which would only be possible i f all creditor classes of WAM were fully satisfied) as an unrealistic scenario.
The next realistic achievable goals of the Board of Directors are on one hand the formalization of the guarantee release from the bank and on the other hand the cash-in of the claim resulting from the insolvency of Swissmetal Busch-Jaeger GmbH, Lüdenscheid.
Jean- Paul Perriat
Weidenstrasse 50 · 4143 Dornach 1 · Sw itzerland
Phone +41 61 705 36 08 · Fax +41 61 705 36 10
investor@sw issmetal.com · www.sw mtl.net
This half -y ear report is only av ailable in the original English
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