Reconstruction Capital II has published accounts for the year ended 31 December 2015. On 31 December 2015, Reconstruction Capital II Limited (“RC2”) had a total audited net asset value (“NAV”) of EUR37.4m or EUR0.3736 per share on an undiluted basis, a 1.03% decrease over the year. The fully diluted NAV per share was EUR0.2847, an increase of 1.24% over the year.
At the end of 2015, RC2 had cash and cash equivalents of EUR1.1m. RC2’s borrowings, after allocating EUR0.63m of the proceeds from the convertible loan note to equity reserves in accordance with applicable accounting standards, amounted to EUR8.98m, whilst suppliers’ liabilities amounted to EUR0.1m.
Apart from acquiring the 7.69% minority stake in Glasro Holding Limited for EUR0.54m in June 2015, RC2 did not make any new investments under its Private Equity Programme, and continued to pursue a number of exits, both from its investee companies as well as from certain assets held by them.
The investments held under the Private Equity Programme had a total fair value of EUR44.4m at the end of 2015 which was slightly more than the 2014 valuation of EUR44.1m. The increase of EUR2.6m in the market value of the Albalact SA holding to EUR12.3m, and in the valuations of Glasro Holdings Limited and Mamaia Hotels SRL investments by EUR1.1m and EUR0.4m, respectively, were offset by the EUR0.4m and EUR 0.6m falls in the valuations of the investments in Top Factoring SRL and Policolor SA, respectively, and the full write-down of the EUR 2.6m equity investment in Klas DOO. In addition to the write off of the equity investment in Klass DOO, a partial provision of EUR0.9m was made against the shareholder loan of EUR 1.5m (including accrued interest).
Based on unaudited management accounts, all four investments in Romania (Policolor SA, Top Factoring SRL and its sister company Glasro Holdings Limited, Mamaia Resort Hotels SRL and Albalact SA) generated positive EBITDA, and in the case of Glasro and Albalact free cash flow in the form of dividends.
On 28 January 2016 RC2 announced an agreement to sell its 25.4% holding in Albalact SA to Lactalis for estimated proceeds of EUR16.7m, to be finally determined based on its net debt immediately prior to the completion of the transaction. This represents a premium of approximately 36% over the carrying value of the investment at year-end. The closing of this transaction is subject to the fulfilment of a series of conditions precedent, including favourable clearance by the Romanian Competition Council which is expected by 1 June 2016.
RC2 : Reconstruction Capital II reports small fall in NAV over 2015