teknia manufacturing group, s.l.u. 1 - teknia manufacturing group, s.l.u. (incorporated in spain in...
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TEKNIA MANUFACTURING GROUP, S.L.U.
(Incorporated in Spain in accordance with the Spanish Capital Companies Act)
EUR 40,000,000 Senior Unsecured Notes Programme 2018
Teknia Elorrio, S.L.U., Teknia Pedrola, S.L.U., Teknia Barcelona, S.L.U., Teknia
Bilbao XXI, S.L.U., Teknia Montmelo, S.L.U., Teknia Martos, S.L.U., Teknia
Azuqueca, S.L.U., Teknia Manresa, S.L.U., Teknia Epila, S.L.U., Teknia R&D,
S.L., Teknia Brasil Ltda., Teknia Rzeszów S.A., Teknia Kálisz, S.p. z o.o., Teknia
Uherský Brod, a.s., and Teknia Nashville, LLC as Subsidiary Guarantors of the
Programme
INFORMATION MEMORANDUM (DOCUMENTO BASE INFORMATIVO DE
INCORPORACIÓN) ON THE ADMISSION (INCORPORACIÓN) OF MEDIUM-
AND LONG-TERM SECURITIES ON THE ALTERNATIVE FIXED-INCOME
MARKET (“MARF”)
Teknia Manufacturing Group, S.L.U. (indistinctively, “Teknia”, “Teknia Group”, the
“Issuer” or the “Company”) a private company with limited liability (Sociedad Limitada)
organised under the laws of Spain, registered in the Vizcaya Mercantile Registry (Basque
Country, Spain) in volume 3702, folio 22, sheet BI-23069, with tax identification number
B-48.984.090 and LEI code 9598001382GF2BG2PP33 will request the admission of the
Notes (incorporación de valores) to be issued under this Programme on the Alternative
Fixed-Income Market (“MARF”) under the provisions of this Information Memorandum
(Documento Base Informativo de Incorporación).
Admission (incorporación) to MARF will be requested for the Notes issued under the
Programme. MARF is a multilateral trading system and is not a regulated market in
accordance with the provisions of Directive 2004/39/EC of 21 April 2004 on markets in
financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and
Directive 2000/12/EC of the European Parliament and of the Council and repealing
Council Directive 93/22/EEC (“Directive 2004/39/EC”). There is no guarantee that the
price of the Notes in MARF will be maintained. There is no assurance that the Notes will
be widely distributed and actively traded on the market because at this time there is no
active trading market. Nor is it possible to ensure the development or liquidity of the
trading markets for the Notes.
The Notes will be represented by book entries in Iberclear, according to the provisions of
title VIII of the Information Memorandum.
An investment in the Notes involves certain risks.
Read section III of the Information Memorandum on Risk Factors.
This Information Memorandum (Documento Base Informativo de Incorporación) is
not a prospectus (folleto informativo) and has not been registered with the National
Securities Market Commission (CNMV). The offering of the securities does not
constitute a public offering in accordance with the provisions of Article 35 of Royal
Decree 4/2015 of 23 October, approving the revised text of the Securities Market Act
and therefore there is no obligation to approve, register, and publish a prospectus
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with the CNMV. The issue of Notes under this Programme is intended exclusively
for professional clients and qualified investors in accordance with the provisions of
Article 205 of Royal Decree 4/2015 and Article 39 of Royal Decree 1310/2005 of 4
November, which partially develops Law 24/1988, of 28 July, on the Securities
Market, with regard to the admission of securities to trading on official secondary
markets, public offerings or subscription, and the prospectus required for this
purpose (“Royal Decree 1310/2005”).
No action has been taken in any jurisdiction to permit a public offering of the Notes
or the possession or distribution of the Information Memorandum or any other
offering material in any country or jurisdiction where such action is required for
said purpose.
This Information Memorandum includes the information required by MARF
Circular 1/2015. The Governing Body of MARF has not made any verification or
checks with respect this Information Memorandum, nor of the rest of the
documentation and information contributed by the Issuer in compliance with said
Circular 1/2015.
ARRANGERS AND PLACEMENT ENTITIES
BANCO DE SABADELL, S.A. and BANKINTER, S.A.
LEGAL ADVISOR OF THE ISSUER
CUATRECASAS GONÇALVES PEREIRA
REGISTERED ADVISOR
PKF ATTEST SERVICIOS EMPRESARIALES, S.L.
The date of this Information Memorandum is 15 of February 2018.
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CONTENTS
I. IMPORTANT INFORMATION 8
II. SUMMARY 11
1. Overview of the Business of the Issuer 11
2. History 12
3. Relevant aspects of recent activity 13
4. Organizational Structure 13
5. Strategy 15
6. Financial information 16
III. RISK FACTORS 23
1. Risks related to the Issuer’s Industry and Business 24
2. Financial risk factors 37
3. Risks relating to the Notes issued under the Programme 40
IV. DECLARATION OF LIABILITY 44
1. Person responsible for the information contained in the Information
Memorandum 44
2. Statement of the person responsible for the content of the Information
Memorandum 44
V. FUNCTIONS OF THE REGISTERED ADVISOR OF MARF 44
VI. INDEPENDENT AUDITORS 46
1. Name and address of the auditors of the Issuer for the period covered by
the historical financial information (together with their membership in a
professional body) 46
2. If auditors have resigned, been removed from their duties or have not
been re-appointed during the period covered by the historical financial
information, indicate the details, if material 47
VII. INFORMATION ON THE ISSUER 47
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1. Full name of the Issuer including its address and identification data 47
2. Description of the Issuer 48
2.1. Milestones of the Issuer 48
2.2. Main Shareholders 49
2.3. Organizational Structure 49
2.4. Corporate purpose 53
2.5. Administrative and management bodies 54
2.5.1. Board of Directors 54
2.5.2. Senior Management 54
2.6. Industry and Activity 60
2.6.1. Industry introduction 60
2.6.2. Strategy 63
2.6.3. Trends in the industry 64
2.6.4. Business Units 65
2.6.5. International expansion 65
2.6.6. Sectors of activity 66
2.7. Declaration on the absence of significant changes in the prospects of the
Issuer 69
2.8. Information on significant changes in the prospects of the Issuer 69
3. Reasons for the Issue and use of proceeds 69
4. Financial information 69
4.1. Audited historical financial information 69
4.2. Financial Statements of the Issuer 70
4.3. Financial ratios as of 31 December 2016 and 2015 76
4.4. Audit of historical annual financial information 77
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4.4.1. Statement that historical financial information has been audited. If audit
reports on the historical financial information have been refused by the
auditors or if they contain qualifications or disclaimers, such
qualifications or disclaimers must be reproduced in full, explaining the
reasons. 77
4.4.2. Indication of other information in the Information Memorandum which
has been audited by the auditors 77
4.4.3. Where financial data in the Information Memorandum is not extracted
from the audited Financial Statements of the Issuer, you must declare the
source of the data and state that the data is unaudited 77
4.5. Age of the most recent financial information 77
4.6. Judicial, administrative and arbitration proceedings 77
5. Significant changes in the financial or trading position of the Issuer 77
VIII. DESCRIPTION OF THE NOTES 78
1. Total amount of the securities issued/admitted to trading 78
2. Date of issue of the Notes 78
3. Form and Denomination 78
4. Status of the Notes and Guarantee 79
5. Price of the Notes 79
6. ISIN Code 80
7. Register, Title and Transfers 80
8. Guarantees and Security 81
8.1. Subsidiary Guarantors 82
8.2. Nature of the Guarantees 84
8.3. Accession of additional Subsidiary Guarantors or Share Pledge over
Subsidiaries 84
8.4. Release of Subsidiary Guarantors 85
8.5. Limitations 86
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9. Covenants 86
9.1. Negative Pledge 86
9.2. Change of Control 88
9.3. Related-party Transactions 89
9.4. Limitation on Indebtedness 90
9.5. Limitation on sale of assets and mandatory tender offer for the Notes 91
9.6. Limitation on Dividends 93
9.7. Limitation on Investments 94
9.8. Limitation on Structural Modifications 95
9.9. Transactions with Subsidiaries 95
9.10. Information and Reports 96
10. Interest 97
11. Redemption and Purchase 98
(i) the Issuer has or will become obliged to pay additional amounts as
provided or referred to in Condition 15 (Taxation) as a result of any
change in, or amendment to, the laws or regulations of the Kingdom of
Spain or any political subdivision or any authority thereof or therein
having power to tax, or any change in the application or official
interpretation of such laws or regulations (including a holding by a court
of competent jurisdiction), which change or amendment becomes
effective on or after the Issue Date; and 98
(ii) such obligation cannot be avoided by the Issuer taking reasonable
measures available to it; 99
12. Payments 100
13. Placement of each issue under the Programme 101
14. Further issues 101
15. Taxation 101
16. Events of Default 103
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17. Prescription 105
18. Paying Agent 105
19. Syndicate of Noteholders, Modification and Waiver 105
20. Notices 117
21. Governing Law and Jurisdiction 117
IX. ADMISSION OF THE SECURITIES 118
1. Request for admission of the securities to the Alternative Fixed
Income Market. Deadline for admission to trading 118
2. Cost of all legal, financial, and audit services and other costs to the
Issuer regarding the registration of the Programme 119
X. THIRD PARTY INFORMATION, STATEMENT BY EXPERTS
AND DECLARATIONS OF INTEREST 119
XI. REFERENCES 119
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I. IMPORTANT INFORMATION
Neither the Issuer nor the Bookrunners have authorized anyone to provide information to
potential investors other than the information contained in this Information Memorandum
and other publicly available information. Potential investors should not base their
investment decision on information other than that contained in this Information
Memorandum and alternative sources of public information.
The Bookrunners assume no liability for the content of the Information Memorandum.
The Bookrunners have signed a contract with the Issuer, but neither the Bookrunners nor
any other entity has made any commitment to underwrite the issue, without prejudice to
the ability of the Bookrunners to acquire part of the Notes on their own behalf.
This Information Memorandum is not a prospectus (folleto informativo) and has not been
registered with the National Securities Market Commission (CNMV). The offering of the
securities does not constitute a public offering in accordance with the provisions of Article
35 of Royal Decree 4/2015 of 23 October, approving the revised text of the Securities
Market Act (“SML”), and therefore there is no obligation to approve, register, and publish
a prospectus with CNMV.
Admission (incorporación) to MARF will be requested for the Notes issued under the
Programme. MARF is a multilateral trading system and is not a regulated market in
accordance with the provisions of Directive 2004/39/EC. This Information Memorandum
includes the information required by MARF Circular 1/2015. The Governing Body of
MARF has not made any verification or checks with respect this Information
Memorandum, nor of the rest of the documentation and information contributed by the
Issuer in compliance with said Circular 1/2015.There is no guarantee that the price of the
Notes in MARF will be maintained.
The Notes will be represented by book entries in Iberclear, according to the provisions of
section VIII of the Information Memorandum.
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SELLING RESTRICTIONS
No action has been taken in any jurisdiction to permit a public offering of the Notes or
the possession or distribution of the Information Memorandum or any other offering
material in any country or jurisdiction where such action is required for said purpose.
In particular:
European Union
The Notes are only directed to qualified investors according to the provisions in Article
2.1.e) of Directive 2003/71/EC. Therefore, this Information Memorandum has not been
registered with any competent authority of any Member State.
Spain
This Information Memorandum has not been registered with the National Securities
Market Commission in Spain (“Comisión Nacional del Mercado de Valores” or
“CNMV”). The issue of the Notes will not constitute a public offering in accordance with
the provisions of Article 35 of Royal Decree 4/2015 of 23 October, approving the revised
text of the Securities Market Act. The issue of Notes shall be intended exclusively for
professional clients and qualified investors in accordance with the provisions of Article
205 of Royal Decree 4/2015 of 23 October, approving the revised text of the Securities
Market Act and Article 39 of Royal Decree 1310/2005 of 4 November, which partially
develops Law 24/1988, of 28 July, on the Securities Market, with regard to the admission
of securities to trading on official secondary markets, public offerings or subscription,
and the prospectus required for this purpose (“Royal Decree 1310/2005”).
Portugal
This Information Memorandum has not been registered with the Portuguese Securities
Market Commission (Comissão do Mercado de Valores Mobiliários) and no action has
been undertaken that would be considered a public offer of the Notes in Portugal.
According to the above, the Notes to be issued under this Programme may not be offered,
sold, or distributed in Portugal except in accordance with the provisions of Articles 109,
110 and 111 of the Portuguese Securities Code (Código dos Valores Mobiliários).
Andorra
No action has been undertaken that may require the registration of this Information
Memorandum with any authority of the Principality of Andorra.
Switzerland
This document does not constitute an offer to sell or a solicitation to buy the Notes in
Switzerland. The Notes issued under the Programme shall not be subject to public
offering or advertised, directly or indirectly, in Switzerland and will not be listed on SIX,
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the Swiss Exchange, or any other Swiss market. Neither this document nor the issue or
marketing materials of the Notes constitute a prospectus within the meaning of articles
652a or 1156 of the Swiss Code of Obligations, nor a listing prospectus according to the
Admission rules of the SIX Swiss Exchange or any other Swiss market.
United States
This document must not be distributed, directly or indirectly, in (or sent to) the United
States of America (according to definitions of the “Securities Act” of 1933 of the United
States of America – “U.S. Securities Act”). This document is not an offer to sell securities
or a solicitation to buy any securities in any jurisdiction in which such offer or sale is
considered contrary to law. The Notes issued under the Programme will not be registered
in the United States for the purposes of the U.S. Securities Act and may not be offered or
sold in the United States without registration or an exemption application for registration
under the U.S. Securities Act. There will not be a public offering of the notes in the United
States or in any other jurisdiction.
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II. SUMMARY
1. Overview of the Business of the Issuer
Teknia Manufacturing Group, S.L.U. was incorporated as a private company with limited
liability under the laws of Spain on 30 July 1998. This Spanish, family-owned company
is engaged in the manufacture of automotive parts, and currently has 20 production plants,
4 commercial offices, and 5 Research & Development (“R&D”) centres.
The Company designs, develops, manufactures and supplies its activities in the
automotive business in three product categories: plastic, metallic (tubing and stamping)
and machining, and sells its products to Tier1 suppliers (c. 80% of sales) and Original
Equipment Manufacturer - “OEMs”- (c.20% of sales).
Teknia Group began its international expansion in 1999 with the acquisition of Tecnotubo
in Brazil. The following graph shows the Teknia Group’s current locations:
In addition, to i) enhancing its product range, ii) providing its clients with the latest
products, and iii) relying on cutting-edge technology, Teknia engages in intense R&D,
which allows the Company to be a leading manufacturer within the industry and a partner
to its clients.
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2. History
Teknia is engaged in the manufacture of automotive parts. Since its inception, the
Company has grown significantly in terms of revenues, earnings, and global presence,
becoming an international automotive parts manufacturer operating in 12 countries.
Teknia began as, and remains, a family-owned company. It launched its activity through
the acquisition of Industrias Elix, which became Teknia Elorrio, but it was not until 1998,
after several other acquisitions on Spanish soil, that the Teknia Manufacturing Group was
founded.
The main milestones achieved along the history of the Issuer are the following:
During its 25-year history, the Company’s performance drivers have been:
- Geographical diversification: worldwide presence in the most important automotive
markets, enabling the Company to cover its clients’ needs in terms of quality, time
and costs. Currently, Teknia has 20 production plants (in nine countries), four
commercial offices, and five R&D centres that provide services to the whole Group.
The production plants are located in Spain (7), Brazil (3), Poland (2), USA (1),
Czech Republic (2), Morocco (1), Mexico (2), Serbia (1) and Turkey (1).
- Technological diversification: the Company specializes in the development and
manufacture of automotive components, assembly, and the design of specific
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manufacturing processes. These services are carried out in three divisions: plastic,
metallic (including tubing and stamping), and machining. Additionally, Teknia has
an R&D division that supports the automotive business and enables the Group to
remain at the forefront of the industry.
- Close relationship with its major clients, which has led to the joint design of
international expansion strategies, in which Teknia has accompanied its clients as
a key supplier in new markets.
- Continuous growth: the company has made major strides in the commercial field,
with the opening of international sales offices, among others, in USA, Germany,
and South Korea, and a commercial office in China, with the goal of increasing
sales and enhancing its visibility with regard to international expansion.
3. Relevant aspects of recent activity
The Group consists in two main business lines: automotive and R&D. The R&D division
supports the automotive business and enables the Group to remain at the forefront of the
industry.
The Plastic division is the largest in terms of sales (approximately 45% of total aggregated
sales in 2016), followed by the Metallic division (approximately 39% of total sales), and
the Machining division (approximately 16% of total sales).
4. Organizational Structure
As of 31 December 2017, the Group is comprised of 25 registered companies (parent
company included), as follows:
(1) Source: Individual Audited Annual Accounts (Aggregated Data)
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Siuled, S.L. is the investment vehicle through which Mr. Javier Quesada owns 100% of
Teknia Manufacturing Group.
Beneath has been detailed the main figures of the audited individual financial statements
(Teknia Montmelo, S.L.U.,Teknia R&D, S.L., Componentes de Automoción Marroquíes
figures correspond to limited reviews, audited) of the most relevant subsidiaries with
industrial activity as of 31 December 2016:
Thousand of Euros
Teknia
Elorrio
Teknia
Pedrola Teknia Epila
Teknia
Barcelona
Teknia
Bilbao XXI
Teknia
Montmeló
Teknia
Martos
Teknia
Brasil
Teknia
Manresa Teknia KG
Total assets 10.293 7.780 2.145 10.796 10.138 2.692 13.749 16.792 12.815 1.461
Total Equity 4.186 1.504 1.016 2.446 3.256 868 5.110 8.800 6.533 971
Net turnover 20.020 11.784 2.036 23.489 16.435 3.563 30.329 20.565 24.279 1.507
Results from Operating expenses 1.730 128 192 1.243 515 568 3.120 (2.101) 3.018 25
Profit/ (Loss) for the period 1.505 83 168 877 254 409 2.338 (2.243) 2.369 25
Thousand of Euros
Teknia
Azuqueca
Teknia
Uhersky
Brod Teknia R&D
Teknia
Rzeszów
Teknia
Kálisz
Teknia
Automotive
Mexico
Teknia
Nashville
Component
es de
Automoción
Marroquies
Teknia Mexico
City
Total assets 18.751 20.929 499 15.748 23.647 9.521 19.614 2.911 3.072
Total Equity 6.147 11.096 59 7.384 6.256 3.239 9.305 375 1.228
Net turnover 42.425 25.350 825 22.989 25.063 10.029 20.469 2.874 4.083
Results from Operating expenses 2.190 2.585 (26) 2.524 265 (193) (152) 83 518
Profit/ (Loss) for the period 1.580 2.127 (26) 1.838 (347) (653) (54) 14 207
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5. Strategy
The Company’s performance drivers have been:
- Geographical diversification: worldwide presence in the most important automotive
markets, enabling the Company to cover its clients’ needs in terms of quality, time
and costs. Currently, Teknia has 20 production plants (in nine countries), four
commercial offices, and five R&D centres that provide services to the whole Group.
The production plants are located in Spain (7), Brazil (3), Poland (2), USA (1),
Czech Republic (2), Morocco (1), Mexico (2), Serbia (1) and Turkey (1).
- Technological diversification: the Company specializes in the development and
manufacture of automotive components, assembly, and the design of specific
manufacturing processes. These services are carried out in three divisions: plastic,
metallic (including tubing and stamping), and machining. Additionally, Teknia has
an R&D division that supports the automotive business and enables the Group to
remain at the forefront of the industry.
- Close relationship with its major clients, which has led to the joint design of
international expansion strategies, in which Teknia has accompanied its clients as
a key supplier in new markets.
- Continuous growth: the company has made major strides in the commercial field,
with the opening of international sales offices, among others, in USA, Germany,
and South Korea, and a commercial office in China, with the goal of increasing
sales and enhancing its visibility with regard to international expansion. Moreover,
it has acquired over 20 companies during its existence, which, along with the
company’s growth, has enabled it to achieve its current size.
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6. Financial information
The financial information presented in this Information Memorandum includes the
consolidated financial statements of Teknia Group for the years ended 31 December, 2015
and 31 December, 2016, which have been extracted from the audited consolidated annual
accounts of the Group for the years ended 31 December 2016 and 31 December 2015,
included in “Annex 1” and “Annex 2” of this Information Memorandum.
In addition, the individual audited annual accounts of the Subsidiary Guarantors for the
year ended 31 December 2016 have also been included as “Annex 3” to this Information
Memorandum.
The consolidated financial statements as of 31 December 2016 and 2015, have been
prepared from the accounting records of the Group and are presented in accordance with
the commercial legislation and the established rules in the General Accounting Plan
approved by Royal Decree 1514/2007 and the amendments made thereto by Royal Decree
1159/2010.
Certain data contained in this Information Memorandum, including financial information,
have been subject to rounding adjustments. Accordingly, in certain instances, the sum of
the numbers in a column or a row of the tables may not conform exactly to the total figure
given for that column or row, or the sum of certain numbers presented as a percentage
may not conform to the total percentage given.
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Audited Consolidated Income Statement for the financial years ended on 31
December 2016 and 2015 (in thousands of Euros)
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CO NSO LIDATED INCO ME STATEMENT
2016 2015 Var 16-15
A) CO NTINUING O PERATIO NS
1. Revenue 297.662 246.279 20,9%
a) Sales 294.979 245.031 20,4%
b) Services rendered 2.683 1.248 115,0%
2. Changes in inventories of finished goods and work in progress 2.389 1.048 128,0%
3. Work carried out by the company for own assets 1.100 572 92,3%
4. Supplies (166.666) (138.749) 20,1%
a) Merchandise used (8.847) (5.389) 64,2%
b) Raw materials and other consumables used (130.560) (109.850) 18,9%
c) Subcontracted work (27.217) (23.286) 16,9%
d) Impairment of merchandise, raw materials and other supplies (42) (224) -81,3%
5. O ther operating income 1.340 1.141 17,4%
a) Non-trading and other operating income 1.264 980 29,0%
b) Operating grants taken to income 76 161 -52,8%
6. Personnel expenses (65.646) (52.949) 24,0%
a) Salaries and wages (51.047) (40.877) 24,9%
b) Employee benefits expense (14.476) (12.024) 20,4%
c) Provisions (123) (48) 156,3%
7. O ther operating expenses (42.643) (36.925) 15,5%
a) Losses, impairment and charges in trade provisions (47) (326) -85,6%
b) Other operating expenses (42.596) (36.599) 16,4%
8. Amortisation and depreciation (9.787) (7.705) 27,0%
9. Non-financial and other capital grants 5 5 -
11. Impairment and gain/(losses) on disposal of fixed assets (19) 1.965 -101,0%
a) Impairments and losses - (317) -100,0%
b) Results due to divestment and others (19) 2.282 -100,8%
14. O ther results 135 141 -4,3%
A.1) RESULTS FRO M O PERATING ACTIVITIES
(1+2+3+4+5+6+7+8+9+10+11+12+13+14) 17.870 14.823 20,6%
15. Finance income 250 320 -21,9%
a) Dividends 3 3 -
b) Marketable securities and other financial instruments 10 99 -89,9%
c) Allocation of grants, donations and bequests of a financial nature 237 218 8,7%
16. Finance expenses (2.550) (1.688) 51,1%
18. Exchange gains/(losses) (1.079) (1.989) -45,8%
19. Impairment and profit/loss on divestment of financial instruments - (228) -100,0%
a) Impairments and losses - (228) -100,0%
A.2) NET FINANCE INCO ME/(EXPENSE) (14+15+16+17+18+19) (3.379) (3.585) -5,7%
A.3) PRO FIT/(LO SS) BEFO RE INCO ME TAX (A.1 + A.2 ) 14.491 11.238 28,9%
24. Income tax (3.521) (1.629) 116,1%
A.4) PRO FIT/(LO SS) FRO M CO NTINUING O PERATIO NS (A.3 +22) 10.970 9.609 14,2%
B) DISCO NTINUED O PERATIO NS - - -
A.5) CO NSO LIDATED PRO FIT/(LO SS) FO R THE PERIO D (A.4) 10.970 9.609 14,2%
Balance attributed to the parent company 10.987 9.659 13,7%
Balance attributed to external shareholders (17) (50) -66,0%
Thousand of Euros
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Audited Consolidated Balance Sheet for the financial years ended on 31 December
2016 and 2015 (in thousands of Euros)
ASSETS
2016 2015 Var 16-15
A) NO N-CURRENT ASSETS 98.442 73.629 33,7%
I. Intangible fixed assets
1. Consolidated goodwill 6.661 2.495 167,0%
2. Research - -
3. Other intangible assets 2.910 2.833 2,7%
9.571 5.328 79,6%
II. Tangible fixed assets
1. Land and buildings 24.945 21.664 15,1%
2. Technical installations and other fixed material assets 47.933 31.517 52,1%
3. Fixed assets under construction and advances 1.276 3.284 -61,1%
74.154 56.465 31,3%
V. Long-term financial investments 2.542 501 407,4%
VI. Deferred tax assets 12.036 11.203 7,4%
VIII. Non-current trade receivables 139 132 5,3%
B) CURRENT ASSETS 115.014 90.597 27,0%
I. Non-current assets held for sale 220 -
II. Inventories 41.555 33.641 23,5%
III. Trade and other receivables
1 Trade receivables for sales and services 53.925 44.299 21,7%
2. Trade receivables from group companies and associates - 16 -100,0%
3. Current tax assets 663 1.109 -40,2%
4. Other receivables 3.247 2.225 45,9%
57.835 47.649 21,4%
IV. Current investments group companies and associates
1 Loans to related parties - 18 -100,0%
2. Other financial assets of group companies and associates - 3.345 -100,0%
- 3.363 -100,0%
V. Current investments 46 1 4500,0%
VI. Current accruals 1.082 1.082 0,0%
VII. Cash and other cash equivalents 14.276 4.861 193,7%
TO TAL ASSETS (A+B) 213.456 164.226 30,0%
Thousands of euros
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TO TAL EQ UITY AND LIABILITIES
2016 2015 Var 16-15
A) EQ UITY 68.225 59.057 15,5%
A-1) Capital and reserves without valuation adjustments
I. Capital 20.000 20.000 -
III. Reserves 39.553 33.680 17,4%
VI. Net income attributed to the parent company 10.987 9.659 13,7%
70.540 63.339 11,4%
A-2) Valuation adjustments
II. Translation differences from consolidated companies (3.141) (5.405) -41,9%
(3.141) (5.405) -41,9%
A-3) Grants, donations and bequests received
I. In consolidated companies 662 858 -22,8%
662 858 -22,8%
A-4) External shareholders 164 265 -38,1%
B) NO N-CURRENT LIABILITIES 61.503 36.989 66,3%
I. Non-current provisions 642 491 30,8%
II. Non-current payables
1. Bonds and other marketable securities 19.635 -
2. Debt with credit entities 32.005 22.984 39,2%
3. Finance lease payables 1.021 296 244,9%
4. Other financial liabilit ies
4.1 Fixed assets suppliers 163 179 -8,9%
4.2 Other financial liabilit ies 6.508 11.694 -44,3%
59.332 35.153 68,8%
IV. Deferred tax liabilities 1.528 1.313 16,4%
V. Non-current accruals 1 32 -96,9%
C) CURRENT LIABILITIES 83.728 68.180 22,8%
II. Current provisions 919 1.592 -42,3%
III. Current payables
1. Bonds and other marketable securities 542 - -
2. Debt with credit entities 20.026 16.664 20,2%
3. Finance lease payables 1.120 537 108,6%
4. Other financial liabilit ies
4.1 Fixed assets suppliers 814 1.065 -23,6%
4.2 Other financial liabilit ies 690 651 6,0%
23.192 18.917 22,6%
IV. Current debt with group companies and associates
2. Other payables - - -
- - -
V. Trade and other payables
1. Suppliers 41.906 34.614 21,1%
2. Suppliers, group companies and associates - 7 -100,0%
3. Current tax liabilit ies 315 351 -10,3%
4. Other payables 17.136 12.418 38,0%
59.357 47.390 25,3%
VI. Current accruals 260 281 -7,5%
TO TAL EQ UITY AND LIABILITIES (A + B + C) 213.456 164.226 30,0%
Thousands of Euros
- 21 -
Audited Consolidated Cash Flow Statements of the financial years ended on 31
December 2016 and 2015 (in thousands of Euros)
- 22 -
CO NSO LIDATED CASH FLO W STATEMENT
2016 2015 Var 16-15
A) CASH FLO WS FRO M O PERATING ACTIVITIES
1. Profit/(loss) for the period before tax 14.491 11.238 28,9%
2. Adjustments for 13.082 7.610 71,9%
a) Amortisation and depreciation (+) 9.787 7.705 27,0%
b) Valuation allowances for impairment losses (+/-) 973 233 317,6%
c) Changes in provisions (+/-) 270 430 -37,2%
d) Grants recognised in the income statement (-) (242) (5) 4740,0%
e) Proceeds from disposals of fixed assets (+/-) 19 (2.282) -100,8%
g) Finance income (-) (250) (320) -21,9%
h) Finance expenses (+) 2.550 1.688 51,1%
k) Other income and expenses (-/+) (25) 161 -115,5%
3. Changes in operating assets and liabilities (8.782) (3.940) 122,9%
a) Inventories (+/-) (6.624) (1.493) 343,7%
b) Trade and other receivables (+/-) (6.899) (3.345) 106,2%
c) Other current assets (+/-) (45) (266) -83,1%
d) Trade and other payables (+/-) 5.567 1.638 239,9%
c) Other current liabilit ies (+ /-) (770) (413) 86,4%
f) Other non-current assets and liabilit ies (+/-) (11) (61) -82,0%
4. O ther cash flows from operating activities (4.050) (4.346) -6,8%
a) Interest paid (-) (1.964) (1.319) 48,9%
c) Interest received (+) 250 102 145,1%
d) Income tax received (paid) (2.336) (3.129) -25,3%
5. Cash flows from/used in operating activities (+/-1+/-2+/-3+/-4) 14.741 10.562 39,6%
B) CASH FLO W'S FRO M INVESTING ACTIVITIES
6. Payments for investments (-) (21.409) (19.921) 7,5%
a) Group companies, net cash flows in consolidated companies (422) (3.473) -87,8%
d) Intangible assets (618) (876) -29,5%
e) Property, plant and equipment (19.551) (15.572) 25,6%
g) Other financial assets (818) -
7. Proceeds from sale of investment (+) 2.490 8.670 -71,3%
e) Property, plant and equipment 2.425 8.670 -72,0%
g) Other financial assets 65 -
8. Cash flows front/used in investing activities (6+7) (18.919) (11.251) 68,2%
C) CASH FLO WS FRO M FINANCING ACTIVITIES
9. Proceeds from and payments for equity instruments (215) 82 -362,2%
a) Issue of equity instruments (+) - 74 -100,0%
e) Acquisition of equity instrument from external shareholders (-) (215) -
g) Grants, donations and bequests received (+) - 8 -100,0%
10. Proceeds from and payments for financial liability instruments 17.438 (626) -2885,6%
a) Issue
1. Bonds and other marketable securities (+) 19.600 -
2. Debt with credit entities (+) 13.675 19.392 -29,5%
5. Other debts (+) 1.142 528 116,3%
b) Redemption and repayment of
2. Debts with financial institutions (-) (10.751) (18.616) -42,2%
5. Other payables (-) (6.228) (1.930) 222,7%
11. Dividends and interest on other equity instruments paid (3.630) (3.525) 3,0%
a) Dividends (-) (3.630) (3.525) 3,0%
12. Cash flows from/used in financing activities (+/-9+/-10-11) 13.593 (4.069) -434,1%
D) EFFECT O F EXCHANGE RATE FLUCTUATIO NS - -
E) NET INCREASE/DECREASE IN CASH AND CASH EQ UIVALENTS (+/-5+/-8+/-12+/-D) 9.415 (4.758) -297,9%
Cash and cash equivalents at the beginning of the period 4.861 9.619 -49,5%
Cash and cash equivalents at the end of the period 14.276 4.861 193,7%
Thousands of Euros
- 23 -
Financial ratios as of 31 December 2016 and 2015:
III. RISK FACTORS
The following are the risks to which Teknia Group is exposed, including those arising
from the business areas in which it operates, as well as those specifically related to
its business. The materialization of any of these risks could have a negative effect on
its business, financial position, and the results of Teknia Group operations, and
subsequently the nominal and/or interest that investors receive for the Notes.
Prospective investors should carefully consider the risks described below in
conjunction with other information contained in this document. In addition, these
risks are not the only ones to which the Issuer could be exposed; it may be the case
that risks which are currently unknown or not considered relevant at this time could
materialize in the future.
2016 2015
PERFORMANCE
EBT / Total Assets 6,8% 6,8%
Turnover / Total Assets 139,4% 150,0%
ROA (OP/Total assets) 8,4% 9,0%
ROE 16,1% 16,3%
Net Result / Turnover 3,7% 3,9%
EBITDA / Turnover 9,3% 9,1%
BALANCE STRUCTURE
Equity / Total Debt 47,0% 56,2%
Total Debt/ Total Equity and Liabilities 68,0% 64,0%
Non Current Liabilities / Current Liabilities 73,5% 54,3%
Cash and similar / Total Debt 9,8% 4,6%
Net Financial Debt / EBITDA (1)
2,47 2,18
Consolidated Profit for the Period / Financial Cost (2)
4,77 6,02
Bank Financial Debt / Total Debt 37,3% 38,5%
SHORT TERM STABILITY
Current Assets / Current LiabiIities 137,4% 132,9%
Current Assets - Inventories / Current Liabilities 87,7% 83,5%
Current Assets / Total Assets 53,9% 55,2%
(1) Net Debt includes all debt (M&A deferred payments included)
(2) Financial cost: Forex cost not included
- 24 -
1. Risks related to the Issuer’s Industry and Business
1. The automotive industry is cyclical, and cyclical downturns in our business
segments negatively impact our business, financial position, results of
operations, and cash flows
The volume of automotive production and the level of new vehicle purchases are
cyclical and fluctuate, sometimes significantly year-on-year. These fluctuations
are caused by several factors, such as general economic conditions, interest rates,
consumer confidence, patterns of consumer spending, fuel costs, and the
automobile replacement cycle. Such fluctuations give rise to changes in demand
for our products and may have a significant adverse impact on our results of
operations. Additionally, TIER 2 customers commit to purchasing minimum
quantities from their suppliers, but since the economic crisis, their budget gaps
have increased. As our business has certain fixed costs that must be met regardless
of product demand, cyclical downturns can further affect the results of our
operations.
The highly cyclical and fluctuating nature of the automotive industry presents a
risk that is beyond our control and that cannot be accurately predicted. Moreover,
a number of factors that we cannot anticipate could, and have had cyclical effects
in the past. Decreases in demand for automobiles generally, or in the demand for
automobiles that use our products specifically, could materially and adversely
affect our business, financial position, the results of operations, and cash flows.
2. Our business is primarily contingent upon the automotive industry, which is
affected by global economic conditions and geopolitical considerations
A significant economic downturn could have a material adverse effect on our
business. Continued concerns about the systemic impact of a potential long-term
wide-spread recession, energy costs (including the recent volatility in oil prices),
the availability and cost of credit, diminished business and consumer confidence,
and increased persistent unemployment in Europe have contributed to a rise in
market volatility and lower expectations for Western and emerging economies.
Recent macroeconomic data points to a potential slowdown in the emerging
markets economies, a fact that would impact the global automotive industry,
lowering its sales forecast and thus, challenging Teknia Manufacturing Group’s
capacity to meet its business plan.
In addition, any increased financial instability may lead to longer-term disruptions
in the credit markets, which could impact our customers’ ability to obtain
financing for their businesses at reasonable prices, and could impact their
customers when seeking financing for automobile purchases. Our TIER 1 and
OEMs customers typically require significant financing for their respective
businesses. Our suppliers, as well as the other players that supply our customers,
may face similar difficulties in obtaining financing for their businesses.
- 25 -
If capital is not available to our customers and suppliers, or if its cost is
prohibitively high, their businesses would be negatively impacted. Any such
negative impact, in turn, could have an adverse material impact on our company,
either through the loss of revenues to any of our customers so affected, or due to
our inability to meet our commitments without excess expense resulting from
disruptions in supply caused by the suppliers so affected. Financial difficulties
experienced by any major customer could have a material adverse impact on us if
such customer i) were unable to pay for the products we provide, ii) materially
reduced its capital expenditure, and resulting demand for, new product lines, or
iii) we otherwise experienced a loss of, or material reduction in, business from
such customer.
Additionally, protectionist pressures have been rising worldwide, as signaled by
policy statements and opinion polls, as well as by recent developments in
multilateral, regional and bilateral trade negotiations.
The risk of a resurgence of protectionism in the aftermath of the financial crisis
should not be neglected. A resurgence of trade protectionism would not only
significantly impair the global recovery process by further hampering trade flows
and global demand but it would also reduce the global growth potential in the long
run.
As a result of such difficulties, we could experience lost revenues, significant
write-offs of accounts receivable, significant impairment charges, or additional
restructurings beyond the steps taken to date.
3. Geopolitical risks could result in the break-up of the European Union (EU)
In the automotive industry, the European market is one of the most important and
mature. On the other hand, this sector is highly dependent on the ability to finance
companies and individuals. These characteristics make it sensitive to a
hypothetical breakdown of the EU because (i) would have to redesign the
allocation of production units in order to ensure supply industry (ii) probably
would be a new financial crisis that could influence negatively in vehicle purchase
decisions and therefore directly impact on sales and production.
If it happens, it could materially and adversely impact our business, financial
condition, results of operations and cash flows.
4. We operate in a very competitive business environment
Despite the industry’s entry barriers, there are a variety of competing actors who
are reduced to local players in the presence of global suppliers. Each has its
competitive advantages, and the goal is to continue to grow, pro-market in the
case of emerging countries, or at the expense of competitors in more mature
markets. This implies that we must maintain very high standards of quality,
engineering, research and development, logistics, costs and financial solvency.
- 26 -
5. Limited international positioning
The segment of second-tier suppliers has the characteristic of operating as a link
between two large sectors: commodities suppliers (as suppliers) and 'Tier 1'
suppliers and OEMs as customers. These segments are also more mature and with
higher level of concentration. In this competitive environment, there are large
multinational companies of large size and influence in the economy which have a
high bargaining power over Tier 2 companies. The company is gradually
increasing its international footprint and getting strategic position in certain
markets and products. Nevertheless, sometimes the company could be in a weak
negotiation position that could negatively impact in results of operations and cash
flows.
6. A significant decline in business with our key customers could adversely affect
our business, financial position, and the results of operations
Although we supply our products to several leading automobile manufacturers, as
is common in our industry we depend on certain large-value customers for a
significant proportion of our revenues. For example, 2016’s total annual sales
-BOSCH 15%, JCI 6%, CONTINENTAL 7%, VALEO 8%, RENAULT-NISSAN
4%, AUTOLIV 4%, TRW/ZF 4%- would represent 48% of the estimated revenue.
The loss of all or a substantial portion of our sales to any of our large-volume
customers could have a material adverse effect on our business, financial position,
or the results of operations, by reducing cash flows and limiting our ability to
spread our fixed costs over a larger revenue base. We may make fewer sales to
these customers for a variety of reasons, including, but not limited to:
• Loss of awarded business;
• Reduced or delayed customer requirements;
• TIER 2s sourcing business traditionally outsourced to us;
• Strikes or other work stoppages affecting our customers’ production;
• Bankruptcy or insolvency of a customer; or
• Reduced demand for our final customers’ products.
7. We are dependent on the ability to obtain and maintain sufficient capital
financing, including working capital lines and credit insurance, which impacts
the liquidity and financial position of all players
Our working capital requirements can vary significantly, depending in part on the
level, variability and timing of our customers’ worldwide vehicle production and
the payment terms with our customers and suppliers.
- 27 -
Moreover, if our suppliers were to suspend normal trade credit terms and require
payment in advance or payment on delivery. If our available cash flows from
operations are not sufficient to fund our ongoing cash needs, we would be required
to look to our cash balances and availability for borrowings under our credit
facilities to satisfy those needs, as well as potential sources of additional capital,
which may not be available on satisfactory terms and in adequate amounts, if at
all.
There can be no assurance that we, our customers, and our suppliers will continue
to have such ability. This may increase the risk that we will be unable to produce
our products or will have to pay higher prices for our inputs. These higher prices
may not be recovered in our sales prices.
Our suppliers often seek to obtain credit insurance based on the strength of the
financial position of our subsidiary with the payment obligation, which may be
less robust than our consolidated financial position.
Access to funding could also be adversely impacted as Central Banks around the
world begin to withdraw liquidity from global markets because of the improving
growth and higher inflation expectations.
If we were to experience liquidity issues, our suppliers may not be able to obtain
credit insurance and, in turn, would likely not be able to offer us the payment
terms we have received historically. Our failure to receive such terms from our
suppliers could have a material adverse effect on our liquidity.
8. Risks related to Research and Development (R&D) project success
Teknia has a R&D division that provides services such as: product development,
prototype manufacturing, and simulations for the automotive business.
In 2016, the Group allocated EUR 1,978 thousand to research and development
projects (according to Spanish tax regulation), with dedicated 11 employees. This
amount is pending to be accredited by a certification entity approved by Entidad
Nacional de Acreeditación (ENAC). Teknia relies on this division to ensure one
of the most updated product ranges in the industry with cutting-edge technology
in its three divisions, and to be a true partner for its clients rather than a mere
provider.
The Strategic Plan includes allocating the expenses incurred by the Company’s
R&D projects.
The allocation of these expenses is constrained by the following aspects:
• The expenses have to be specifically itemized by project and the related costs
clearly identified so that they can be allocated over time.
- 28 -
There must be sound reasons for believing in the technical success and economic-
commercial profitability of the project(s). In the event of non-compliance with
any of these conditions, the Company may not be able to allocate all of the
expenses anticipated in the Strategic Plan.
9. Risk of loss of key personnel
We have a management team with a substantial amount of expertise in the
automotive industry. The departure of key members of management could result
in the loss of valuable know-how and/or less or unsuccessful implementation of
strategies.
10. Risk linked with post-merger integration and synergies of the companies
acquired
We have made strategic acquisitions and divestitures, and may consider or
undertake further acquisitions in the future. We may also consider or undertake
strategic divestitures when they are aligned with our strategy.
However, we may not be able to identify suitable acquisition candidates in the
future, or may not be able to close acquisitions on favourable terms. We may lack
sufficient management, financial and other resources to successfully integrate
future acquisitions or to ensure that such future acquisitions will perform as
planned or prove to be beneficial to our operations. We may not be offered suitable
terms, including price, for the divestitures we wish to make. Acquisitions and
divestitures involve numerous other risks, business concerns, undisclosed risks
impacting the target, and potential adverse effects on existing business
relationships with current customers and suppliers. In addition, any acquisitions
or divestitures could affect our financial position, cash flow or create dilution for
our stockholders. In certain transactions, our acquisition analysis includes
assumptions regarding the consolidation of operations and improved operating
cost structures for combined operations. Such synergies or benefits may not be
achieved according to the anticipated schedule or in the anticipated amount, if at
all. Any future acquisitions may result in significant transaction expenses,
unexpected liabilities, and risks associated with entering new markets, in addition
to integration and consolidation risks.
As a result of our acquisitions or divestments, we may assume continuing
obligations, deferred payments, and liabilities. Any past or future acquisitions may
result in exposure to third parties for liabilities, such as liability for faulty work
done by the acquired business, and liability of the acquired business or assets that
may or may not be adequately covered by insurance or by indemnification, if any,
from the former owners of the acquired business or assets. In connection with
divestitures, we may remain exposed to the buyer for tax or environmental
purposes, or other liabilities of the divested business. The occurrence of any of
these liabilities could have a material adverse effect on our business and the results
of operations.
- 29 -
11. We base our strategy on investing substantial resources in markets where we
expect growth and take the time to alter this strategy in case expectations are
not realized
Our future growth is dependent on us making the right investments at the right
time to support product development and manufacturing capacity in areas where
we can support our customer base. We have identified certain markets, including
NAFTA, ASIA, Turkey, Japan and PACIFIC AREA, as key markets where we
are likely to experience substantial growth, and accordingly have made, and
expect to continue making, substantial investments, both directly and through
participation in various partnerships and joint ventures to support anticipated
growth in those regions. If we are unable to expand customer demand in these
regions, we may not only fail to achieve the expected rates of return on our
existing investments, but we may incur losses on such investments and be unable
to redeploy the invested capital in a timely manner to take advantage of other
markets, potentially resulting in lost market share. Our results will also suffer if
these regions do not grow as quickly as we anticipate.
12. Other risks of doing business in foreign countries
International operations are subject to various risks that could have a material
adverse effect on those operations and our business as a whole, including but not
limited to:
o Exposure to local economic and social conditions, including logistical and
communication challenges;
o Exposure to local political conditions;
o Exposure to local public health issues and the resulting impact on economic
and political conditions;
o Exposure to potentially undeveloped legal systems, which make it difficult
to enforce contractual rights; and exposure to potentially adverse changes in
laws and regulatory practices;
o Exposure to local tax requirements and obligations;
o Foreign currency exchange rate fluctuations and currency controls;
o Greater risk of uncontrollable accounts and longer collection cycles;
o The necessity of foreign representatives and/or consultants;
o The risk of government sponsored competition;
o The difficulty of managing and operating an enterprise spread over various
countries;
o Controls on the repatriation of cash, including the imposition or increase of
withholding and other taxes on remittances and other payments by foreign
subsidiaries; and
o Export and import restrictions.
13. Our success depends in part on our ability to leverage our engineering
capabilities, as well as research and development initiatives to pursue new
business opportunities
- 30 -
Typically, the terms and conditions of the agreements with our customers include
a commitment regarding minimum purchase volumes from us. However, such
contracts routinely state that customers have the contractual right to unilaterally
terminate our contracts with them with no notice or limited notice. If such
contracts are terminated by our customers, our ability to obtain compensation from
our customers for such termination is generally limited to the direct out-of-pocket
costs that we incur for materials, works-in-progress, and in certain instances,
underappreciated capital expenditures and tooling. Further, there is no guarantee
that our customers will renew their purchase orders with us. We cannot assure you
that the results of our operations will not be materially and adversely impacted in
the future if we are unable to realize revenues from our awarded business, if our
customers cancel the awarded business or if our customers fail to renew their
contracts with us.
14. Infringement of intellectual property license rights and the failure to protect the
Group’s intellectual property may adversely affect our business
We believe that we either own or may validly use all of the intellectual and
industrial property rights required for our business operations, and that we have
taken all reasonable measures to protect our rights or obtain warranties from the
owners of third party rights. However, we cannot rule out the risk that our
intellectual and industrial property rights may be disputed by a third party on the
grounds of pre-existing rights or for any other reason. Furthermore, for countries
outside of Europe and North America, we cannot be sure of holding or obtaining
intellectual and industrial property rights that offer the same level of protection as
those in Europe and North America.
15. We may not realize all of the sales expected from our entire order backlog
Although not a common occurrence, occasionally some projects in the backlog do
not end in production and sales. This may be due to different reasons: i) projected
drop in vehicle sales, ii) changes in strategic production decisions, iii) faulty
planning and design tools, and iv) other unforeseen circumstances. At the same
time, investment in productive capacity can be made before any changes in the
production schedule, resulting in poorly sized assets.
Moreover, during the industrialization process of an order (usually 6-18 months),
we may realise the infeasibility of the project. In the majority of cases, this is
discussed and resolved with the customer and with the appropriate joint actions.
In others cases, however, we have to decide cease production on the project.
All these circumstances may cause a decline in sales compared with the provisions
and the profitability of the company.
16. Increases in labour costs, potential labour disputes and work stoppages at our
facilities and the facilities of our suppliers or customers could materially
adversely affect our financial performance
- 31 -
We have specific exposure to labour strikes at our companies, mainly in
international operations. For example, in 2014, we had a strike at our plant in
Jacarei, Brazil due to a dispute regarding a 10% wage increase (the Brazilian
Subsidiary is not profitable). If major work disruptions involving our employees
were to occur, our business could be adversely affected by a variety of factors,
including a loss of revenues, increased costs and reduced profitability. We cannot
assure that we will not experience a material labour disruption at one or more of
our facilities in the future. We cannot guarantee that we will be able to successfully
extend or renegotiate our collective bargaining agreements as they expire from
time to time. If we fail to extend or renegotiate any of our collective bargaining
agreements or are only able to renegotiate them on terms that are less favourable
to us, we may need to incur additional costs, which could have a material adverse
effect on our business, financial position, and the results of operations.
Furthermore, many of the manufacturing facilities of our customers and suppliers
are unionized and are also subject to the risk of labour disruptions. A significant
labour disruption could lead to a lengthy shutdown of our customers’ or our
suppliers’ production lines, which could have a material adverse effect on our
operations and profitability.
17. Our business is subject to environmental, health and safety laws and regulations,
and our ongoing operations may expose us to related liabilities
The nature of our operations subjects us to various statutory compliance and
litigation risks under health, safety and employment laws. Although we make
continuous efforts to comply with regulations, we cannot guarantee that there will
be no accidents or incidents suffered by our employees, our contractors, or other
third parties on our sites. If any of these incidents occur, we could be subject to
prosecution and litigation, which may lead to the imposition of fines, penalties,
and other damages, and may harm our reputation. Such events could have a
material adverse effect on our business, financial position, and operational results.
18. Delivery interruptions of raw materials or components, or an increase in prices
could impact our manufacturing process
We depend on regular deliveries from particular suppliers of components and raw
materials. The foregoing means that interruptions or stoppages in such deliveries
could materially and adversely affect our operations until an alternative is found.
In addition, we may not be able to find acceptable alternatives, and any such
alternatives could result in increased costs and potential losses on certain contracts.
Even if acceptable alternatives are found, the process of locating and securing
such alternatives might be disruptive to our business and might lead to the
termination of supply agreements with our customers.
If any of our suppliers fail or refuse to deliver materials to us for an extended
period of time, or if we are unable to negotiate acceptable terms for the supply of
materials with these or alternative suppliers, our business could suffer. We may
- 32 -
not be able to find acceptable alternatives, and any such alternatives could result
in increased costs and potential losses on certain contracts. Even if acceptable
alternatives are found, the process of locating and securing such alternatives might
be disruptive to our business and might lead to the termination of supply
agreements with our customers.
We depend on the ability of our suppliers to provide materials and components
that meet our customers’ technical specifications, quality standards, and delivery
schedules.
19. Our operations depend on our ability to maintain continual, uninterrupted
production at our manufacturing facilities, as well as the continual,
uninterrupted performance of our information technology (“IT”) system
Like any industrial society, the maintenance of production equipment is essential
for the proper functioning of the business. This investment requires dedication
and funding. However, we cannot guarantee that our efforts can prevent any event
that could result in production problems.
On the other hand, the increasingly intense need for better
management/production information systems is a key business element. Moreover,
many customers require us to share information systems (Case EDI) with
commercial, technical, and logistics areas. Teknia is investing in IT systems and
implementing an adequate Enterprise Resource Planning (“ERP”) throughout the
Group to ensure the quality and easy management of the information.
If any of these key elements suffers a loss, it could cause problems in the
production and shipping of parts and therefore affect profitability.
20. Product liability claims and recall costs could harm profitability and damage
our reputation
We face an inherent business risk of exposure to product liability claims in the
event of the failure of our products to perform to specifications, or if our products
are alleged to result in property damage, bodily injury or death. We are generally
required under our customer contracts to indemnify our customers for product
liability claims concerning our products. Accordingly, we may be materially and
adversely impacted by product liability claims.
If any of our products are, or are alleged to be, defective, we may be required to
participate in a recall involving those products. In addition, our customers demand
that we bear the cost of the repair and replacement of defective products, which
are either covered under warranty or are the subject of a recall.
Warranty provisions are established based on our best estimate of the amounts
necessary to settle existing or probable claims on product defect issues. Recall
costs are costs incurred when government regulators or our customers decide to
recall a product due to a known or suspected performance issue and we are
- 33 -
required to participate either voluntarily or involuntarily. Currently, under most
customer agreements, we only account for existing or probable warranty claims.
We have no warranty and recall data that allows us to establish accurate estimates
of, or provisions for, future warranty or recall costs relating to new products,
assembly programmes, or technologies being brought into production. In addition,
our insurance covering product recalls is limited in amount and coverage and in
some jurisdictions non-existent. The obligation to repair or replace such products
could have a material adverse effect on our profitability and financial position.
A decrease in the actual and perceived quality of our products could damage our
image and reputation, as well as the image and reputation of one or more of our
brands. Defective products could result in loss of sales, loss of customers and loss
of market acceptance. In turn, any major defect in one of our products could also
have a material adverse effect on our reputation and market perception, which in
turn could have an adverse effect on our sales and the results of our operations.
21. Increased capital expenditure requirements for our ongoing operations will
consume cash from our operations and borrowings
Our ability to undertake such operational and maintenance measures largely
depends on the cash flow from our operations and our access to capital. We intend
to continue to fund our cash needs through cash flows from operations.
However, there may be unforeseen capital expenditure needs for which we may
not have adequate capital. The timing of capital expenditures may also cause
fluctuations in our operational results.
22. Our inability to offset price concessions or additional costs from our customers
could negatively impact our profitability
We face continual pricing pressure, in addition to pressures to absorb costs related
to product design and engineering, as well as other items previously paid for
directly by TIER 1, such as tooling. Typically, in line with our industry practice,
our customers benefit from price reductions during the lifecycle of a contract. We
expect to offset these price concessions by achieving production efficiencies;
however, we cannot guarantee that we will do so. If we fail to achieve production
efficiencies that fully offset price concessions or do not otherwise offset such price
concessions, our profitability and the results of our operations could be adversely
affected.
23. A breach of the covenants of our Notes or financing contracts could adversely
affect our financial position
This Programme contemplates several covenants that the Teknia Group has to
meet at the end of the period. Such covenants are reflected in section 8 of the
Information Memorandum.
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Additionally, the Teknia Group has Notes, Commercial Paper and financing
contracts amounting to EUR 82,52 million (excluding market interest
adjustments for interest-free loans) as of 31 December 2016. This financing
requires the Teknia Group to meet during its term, mainly, covenants related to:
i) the indebtedness ratio (net financial debt/Consolidated EBITDA), and ii) the
solvency ratio (equity/financial debt).
Any breach of the covenants of the Notes or syndicated loan terms may require
the Teknia Group to repay the Notes or syndicated loan early, which may
adversely affect our business, its results, or its financial, economic or equity
situation.
24. Shareholding concentration situation
The Company has an ownership structure concentrated on one partner (and
founder) almost since its inception. This situation limits the ability, if necessary,
to obtain funds from shareholders in a hypothetical distress situation. The
Company also faces the usual risks associated with a possible succession process.
Although it is not close in time, it could rush in case of an event or incident. It
could distract the management, the shareholders, and impact negatively in
strategic targets of the company, and therefore, in the growth, results and cash
flows generation.
25. The value of our deferred tax assets could become impaired, which may
materially and adversely affect our operating results
The deferred tax assets included as of December 2016 are related with net
operating loss carry forwards and non-used tax deductions that can be used to
offset taxable income in future periods and reduce the income taxes payable in
those future periods. Our ability to utilize our net operating loss carry forwards
may be limited or delayed. We periodically determine the probability of the
realization of deferred tax assets, using significant judgments and estimates with
respect to, among other things, historical operating results, expectations of future
earnings, and tax planning strategies. If we determine in the future that there is not
sufficient evidence to support the valuation of these assets, due to the factors
described above or other factors, we may be required to adjust the valuation
allowance to reduce our deferred tax assets. Such a reduction could result in
material non-cash expenses in the period during which the valuation allowance is
adjusted and could have a material adverse effect on the results of our operations.
In addition, adverse changes in the underlying profitability and financial outlook
of our operations in several foreign jurisdictions could lead to changes in our
valuation allowances against deferred tax assets and other tax accruals that could
adversely affect our financial results.
Finally, the Company and some of its Spanish subsidiaries and holding companies
form a tax group subject to the special tax consolidation regime for corporate
income tax purposes. If, for whatever reason, the consolidated tax regime were
forfeited or the tax group extinguished, the right to offset the tax loss carry
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forwards and use the tax credits of the tax group would be assigned to the
companies that generated them. This could limit the ability of the companies to
effectively make use of these deferred tax assets and that could adversely affect
our financial results.
26. Our profitability may be adversely affected by our inability to utilize tax losses
in certain jurisdictions
We have incurred losses in some countries in which we may not be able to partially
offset against income we have earned therein. In some cases, we may not be able
to utilize these losses at all if we cannot generate profits in those countries or if
we have ceased conducting business in those countries altogether. Our inability to
utilize material tax losses could materially and adversely affect our profitability.
At any given time, we may face other tax exposures arising from changes in tax
laws, tax reassessments or otherwise. To the extent that we cannot implement
measures to offset these exposures, they may have a material adverse effect on
our profitability.
This could limit the ability of the companies to effectively make use of these
deferred tax assets and that could adversely affect our financial results.
27. We are subject to a complex local and international tax environment that often
requires us to make subjective determinations (i.e. Transfer pricing,
international and local laws, regulations and criteria)
We are subject to many different forms of taxation including but not limited to
income tax, value added tax, social security, and other payroll-related taxes. Tax
law and administration is complex and often requires us to make subjective
determinations. The tax authorities may not agree with the determinations that we
make with respect to the application of tax law. Such disagreements could result
in lengthy legal disputes and, ultimately, in the payment of substantial amounts of
tax, interest, and penalties, which could have a material effect on the results of our
operations.
28. At certain times, we may not be adequately insured
We currently have insurance arrangements in place for products and public
liability, property damage, business interruption (including for sudden and
unexpected environmental damage). However, these insurance policies may not
cover losses or damages resulting from the materialization of any of the risks we
are subject to. Furthermore, significant increases in insurance premiums could
reduce our cash flow. It is also possible that, in the future, insurance providers
may no longer wish to insure businesses in our industry against certain
environmental occurrences.
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29. Significant changes in laws and governmental regulations could have an
adverse impact in our profitability
The legal, regulatory, and industry standard environment in our principal markets
is complex and dynamic, and future changes to the laws, regulations and market
practices concerning, for example, CO2 emissions and safety tests and protocols,
could have an adverse effect on the products we produce and our profitability.
Additionally, we could be adversely affected by changes in taxation or other laws
and jurisprudence which impose additional costs on automobile manufacturers or
consumers, or more stringent fuel economy and emissions requirements on
manufacturers from which we derive some of our sales.
30. Terrorism, other acts of violence, wars or political changes in geographical
areas where we operate may affect our business and results
Terrorism, other acts of violence, or war may negatively affect our business and
the results of our operations. There can be no assurance that there will not be
terrorist attacks or violent acts that may directly affect us, our customers, or
partners. In addition, political changes in certain geographical areas where we
operate may affect our business and the results of operations. Any of these
occurrences could cause a significant disruption in our business and could
adversely affect our business operations, financial position, and operational results.
31. Natural catastrophe affecting any of our plants
The Company’s plants are exposed to natural disasters. Should a natural disaster
occur, the effect could damage part or all of the machinery and thus cease
production for a certain period of time. In this case, the Company may have to
assume high costs to repair or substitute the affected equipment in order to restore
production. Such events could have a material adverse effect on our business
operations, financial position, and operational results.
32. We may be subject to current or future restrictions on the transfer of funds
Under the current foreign exchange regulations in certain countries in which we
operate, there are restrictions on the transfer of funds to and from such countries,
which may include restrictions on the disposition of funds deposited with banks
and restrictions on transferring funds abroad, and may require official approval to
buy foreign currency. Additionally, we have trapped cash in certain jurisdictions
in which we operate in relation to our joint ventures and local law. These
restrictions could impact the payment of dividends to us by certain of our
subsidiaries. If we were unable to repatriate funds from any such countries, we
would not be able to use the cash flow from our businesses to finance our operating
requirements elsewhere and satisfy our debt obligations, including the Notes.
33. The automotive industry’s reputation is at risk due to recent events involving
the manipulation of vehicle emission software
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Given the strict legislation in automotive sector and high level of quality, from
time to time a global loss may occur (for instance, TAKATA Corp. is facing the
most important recall in history). In addition other type of events, as Volkswagen
Group admission to having installed software to manipulate the emission readings
of US Environmental Protection Agency tests, could deteriorate reputation of
those companies and its supply chain. As of now, it is uncertain how much those
events will impact in our business or the car industry in general. One thing is sure;
the world no longer considered the companies in this sector to be reliable, efficient,
and trustworthy.
Our activity depends greatly on the automotive industry. If this industry lowers its
sales forecast and thus its production levels due to reputation problems, Teknia
could see some of their future deliveries compromised and their financial results
affected. The results could result in the failure to achieve the projected business
plan.
34. The Catalan situation may adversely affect our business in Catalonia
In connection with the political situation in Catalonia, although the recent
measures taken by the Spanish Government have helped to mitigate the
uncertainty level in that region, originated by a movement seeking independence,
to the date of registration of this Information Memorandum, there is still some
uncertainty on the outcome of the political and economic outlook in Catalonia,
that could derive in volatility in the stock markets or affect in any other way to
the economic activity in Spain, and particularly, in Catalonia. As a whole, it could
bring an adverse impact on the geographical region of Cataluña and therefore on
the automotive production plants located in this region and, in general, on the
companies incorporated in this region. The Issuer cannot predict the outcome of
this continuing constitutional tension and how it would affect the Notes to be
issued under the Information Memorandum, or the ability of the Issuer to pay
interest and repay principal to the Noteholders.
2. Financial risk factors
Our activities are exposed to a number of financial risks: market risk (fair value risk
and price risk), exchange risk, and interest rate risk on cash flows. Our Company seeks
to minimize potential adverse effects on our financial performance. Risk management
is controlled by our financial department in accordance with policies approved by the
President of the Company and the Steering Committee.
Our Financial Department identifies, evaluates, and implements measures to reduce or
match risks in close cooperation with our operating units. Our Steering Committee and
the President of Teknia determine policies for the global management of risk, and for
specific risk areas such as currency risk, interest rate risk, liquidity risk, non-derivative
financial instruments, and the investment of cash surpluses.
1. Market risk (fair value and price risk)
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We are not exposed to the risk of changes in market value of the investments held
as “available for sale,” which are classified under “non-current financial assets”
in the consolidated statement of financial position.
The risk deriving from a possible increase in the prices of materials, including the
purchase of components used in the production processes, is mitigated by the fact
that we operate with our main suppliers under long-term agreements, which
provide price-stability. On the other hand, we negotiate with our customers to pass
on the price increases of certain materials.
The terms of the agreements with some customers have resulted in lower prices,
which could reduce our margins. We nevertheless develop improvement
programmes and tools to offset these decreases with increases in productivity. We
also negotiate with our suppliers to help them absorb these price reductions.
2. Credit risk
Our customer portfolio is diversified across the major TIER 1 and OEM groups.
As a result, there is no particular concentration of credit risk (major concentration
is 16%). In the past, automobile manufacturers were deemed not to have a major
credit risk, all of our Top 10 customers maintain an Investment Grade from the
rating agencies. We therefore consider that, in spite of the difficulties facing the
automobile sector, the credit ratings of its debtors are sound and its receivables
will be collectable as normal.
In the automotive components industry, the costs to transfer, duplicate or develop
a new supplier are so high that TIER 2 companies like Teknia usually works with
a unique mould/tooling for stamping, plastic injection, and tube manipulating
technologies. It lets TIER 2 companies ensure collection of credit if necessary.
We have set a policy of hedging credit risk with insurance companies for certain
machine technology customers to ensure that those sales are collected.
The credit risk on cash and cash equivalents, financial investments and deposits
with banks and financial institutions is deemed to be immaterial, as these
operations are only entered into with financial institutions with high credit ratings.
3. Liquidity risk
We manage liquidity risk prudently, based on maintaining sufficient cash and
equivalents and the availability of funding by means of sufficient committed
credit.
Furthermore, the centralized cash pooling system we have set up allows us to
manage financial resources with greater efficiency. Our Financial Department
aims to keep financing flexible through its use of the Corporate Facilities.
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4. Exchange risk
Significant long-term fluctuations in relative currency values, in particular a
significant change in the relative values of the non-euro currencies in which we
operate could have an adverse effect on our profitability and financial position,
and any sustained change in such relative currency values could adversely affect
our competitiveness in certain geographic regions.
Economic instability in the countries in which we operate where the euro is not
the local currency, and the related decline in the value of the relevant local
currency in these countries, could have a material adverse effect on our business,
financial position, results of operations and cash flows.
Our company operates in nine different currencies: EUR (the Group’s reference
and consolidation currency), USD, BRA, PLN, MXN, CZK, TRY, MAD and
RSD. It is Group policy not to make any currency hedge. However, the
subsidiaries and the parent plants have the necessary tools to implement a "natural
hedge." Thus, when operating with local currency markets, approximately 80% of
the transactions related to the activity are covered by them. We cannot ensure the
success of this 100% natural hedge since, despite having tools to minimize the
risk of the approximately 20% remaining, it is not always possible to avoid an
exchange cost, which would negatively affect profitability.
In this case, we are subject to risk if the foreign currency in which our costs are
paid appreciates against the currency in which we generate revenues, because the
appreciation effectively increases our cost in that country. The financial position,
results of operations, and cash flows of some of our operating entities are reported
in foreign currencies and then translated into Euros at the applicable foreign
exchange rate for inclusion in our consolidated financial statements. As a result,
appreciation of the euro against these foreign currencies generally will have a
negative impact on our reported sales and profits, while depreciation of the euro
against these foreign currencies will generally have a positive effect on reported
revenues and profits.
5. Interest risk
Given the nature of our business (intensive in production capital) and that we do
not carry major amounts of interest-earning assets, our operating revenues and
cash flows are fairly independent of the variations in market interest rates.
Our interest rate risk stems from our current and non-current floating rate
borrowings and credit lines. Our variable rate borrowings expose us to interest
rate risks for cash flows. As of the December 2016 reporting period,
approximately 45% of borrowings were at fixed interest rates.
6. Risk derived from Teknia’s borrowings
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In order to carry out its activities, Teknia has received financing from credit
institutions and the bond issuance carried out during the fiscal year 2016.
Therefore, Teknia is exposed to the risk of non-compliance with the obligations
arising from its borrowings.
In particular, under the commitments assumed by reason of the bond issuance
carried out in 2016, Teknia is currently subject to the fulfilment of various
financial covenants (including indebtedness limitation, negative pledge, dividend
payments restrictions, restrictions on sales of assets and mandatory tender offers
of the bond, investment restrictions, etc.), which derive from the Information
Memorandum registered on June 20, 2016 at the Alternative Fixed-Income
Market (MARF). Teknia regularly monitors compliance with these financial
covenants in order to anticipate any risk of non-compliance and to take corrective
measures.
On or about the date hereof, Teknia has renewed the commercial paper
programme which was initially registered in MARF with a maximum aggregate
amount of Eur 25 millon on February 2017
3. Risks relating to the Notes issued under the Programme
1. Early redemption of the notes risk
The Programme provides the possibility of early redemption of the Notes issued
there under by the Issuer, who then proceeded with the transaction, an investor
might not be able to reinvest the outcome on comparable values at the same
interest rate.
2. Risk of having the credit rating downgraded
The Issuer which notes are incorporated into the MARF under the Programme is
subject to a credit rating by rating agencies. The credit rating is the rating scale
that seeks to classify the extent of the obligations the Issuer may have regarding
the issuance of the notes.
The rating reflects only the view of the rating agency and, at the time of the
evaluation, takes into consideration the credit rating of the Issuer and, where
appropriate, the Subsidiary Guarantor(s), as well as the structural characteristics
and other aspects of the issue. However, the rating may not reflect the potential
impact of risks related to structure, market and other factors in the valuation of
securities.
There is no assurance that any of the credit ratings assigned to the securities will
endure over time or will not be subject to suspension, reduction or withdrawal at
any time by the rating agency, because of certain circumstances (e.g. change of
evaluation criteria). If the rating assigned was reduced or withdrawn, the market
value of the securities may be reduced. Future events, including those affecting
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the Issuer and the Subsidiary Guarantors, if any, may adversely affect the rating
of the securities.
Therefore, any change in creditworthiness, or the perception of it, that could also
adversely affect the market value of the securities’ credit ratings are not a
recommendation to buy, subscribe, sell or hold securities and will depend, among
other circumstances, on certain characteristics of the business and the financial
position of the Issuer and/or Subsidiary Guarantor(s).
3. Future sale of Notes on the secondary market after the offering could
negatively affect the Notes’ market price
Sales of a substantial number of the Company's Notes on the public market
following this offering, or the perception that such issuance or sale might occur,
could adversely affect the market price of the Notes and/or the Company's ability
to raise capital through a future public offering.
4. The Notes price could be volatile and subject to sudden and significant
declines
The market price of the Notes may be volatile. Factors beyond the Company's
control, such as changes in the results of operations and the financial position of
the Company's competitors, negative publicity, or changes in financial market
conditions, may have a significant effect on the market price of the Company's
Notes. In addition, during the past few years, the markets in Spain and worldwide
have experienced significant volatility in prices and trading volumes. This
volatility could have a negative impact on the market price of the Notes, regardless
of the Company's financial position and the results of its operations.
5. Noteholders in countries with currencies other than the euro will be exposed
to exchange rate risks
Noteholders residing in countries that have not adopted the euro as their official
currency will be exposed to an additional investment risk related to variations in
the rate of exchange between the currency of their country of residence and the
euro. Notes will only be issued and listed in Euros.
6. The Teknia Group may not be able to obtain the funds required to repurchase
Notes upon a change of control
The Terms and Conditions of the Notes issued under the Programme shall contain
provisions relating to certain events constituting a “Change of Control” of the
Teknia Group. Upon a Change of Control, the Teknia Group would be required to
offer to repurchase all outstanding Notes at a price equal to 101% of their principal
amount, plus accrued and unpaid interest and additional amounts, if any, as of the
date of repurchase. If a Change of Control were to occur, the Teknia Group cannot
assure you that it would have sufficient funds available at such time to pay the
repurchase price of the outstanding Notes under the Programme. A Change of
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Control may result in a prepayment or default event, and the acceleration of other
indebtedness. The repurchase of the Notes pursuant to such an offer could
precipitate a default under such indebtedness, even if the Change of Control itself
does not. Sufficient funds may not be available when necessary to make any
required repurchases. In addition, the Teknia Group expects that it would require
third-party financing to make an offer to repurchase the Notes upon a Change of
Control. The Teknia Group cannot assure you that it would be able to obtain such
financing. Any failure by the Issuer to offer to purchase the Notes would constitute
a default under the Terms and Conditions of the Notes issued under the
Programme.
The Change of Control provision may not necessarily afford protection in the
event of certain important corporate events, including a reorganization,
restructuring, merger or other similar transaction, involving the Teknia Group that
may adversely affect the Noteholders, because such corporate events may not
involve a shift in voting power or beneficial ownership or, if they do, may not
constitute a “Change of Control” as defined in the Terms and Conditions of the
Notes issued under the Programme.
7. There may not be an active trading market for the Notes, in which case the ability
to sell the Notes may be limited
The Teknia Group cannot assure Noteholders of the liquidity of any market, their
ability to sell the Notes, or the sale price of the Notes. Future trading prices for the
Notes will depend on many factors, including, among other things, prevailing
interest rates, the Teknia Group’s operating results, and the market for similar
securities.
Although an application will be submitted to list the Notes issued under the
Programme on the Spanish Mercado Alternativo de Renta Fija (MARF), the
Teknia Group cannot assure that the Notes will be or will remain listed. Although
no assurance is made as to the liquidity of the Notes as a result of admission
(incorporación) to the MARF market, failure to be approved for admission or
exclusion (whether or not for an alternative admission to listing on another stock
exchange) of the Notes from the MARF market may have a material effect on a
Noteholder’s ability to resell the Notes, as applicable, on the secondary market.
8. Credit ratings may not reflect all risks and are not recommendations to buy or
hold securities, and may be subject to revision, suspension or withdrawal at any
time
AXESOR has assigned the Issuer a credit rating of BB, with a stable outlook. The
agency rating is a way to measure the risk. In the market, investors demand higher
returns on higher risks and should assess the likelihood of a downward variation
in the credit quality of the Issuer or the securities (if any is assigned), which could
lead to a loss of liquidity in the securities purchased on the market and a loss in
value.
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The Teknia Group’s credit rating may be revised upward or downward, suspended,
or even withdrawn by the rating agency. A downward revision, suspension, or
withdrawal of the credit rating by the rating agency could alter the price of the
Notes from a market perception and hinder the Teknia Group’s access to debt
markets, thus affecting its ability to achieve financing.
9. The decisions of the Noteholders Syndicate may be contrary to those of
individual Noteholders
The Terms and Conditions of the Notes issued under the Programme may include
clauses regarding the Noteholders Syndicate assemblies which may take place to
resolve matters regarding the interests of Noteholders. These clauses establish
specific majorities which will be binding for all Noteholders, including those who
have not come nor voted in the assembly, or who have voted against the majority,
thus being bound by the decisions taken in a validly convened and held assembly.
Therefore, it is possible that the Noteholders Syndicate takes a decision with
which an individual Noteholder is not in agreement, but to which all Noteholders
are bound.
10. Risks related to the Notes’ Subsidiary Guarantors
The Notes issued under the Programme will be guaranteed by the Subsidiary
Guarantors.
The enforcement of any of the Guarantees against any Subsidiary Guarantor will
be subject to certain defences available to Subsidiary Guarantors in the relevant
jurisdiction. Although laws differ among these jurisdictions, these laws and
defences generally include those that relate to corporate purpose or benefit,
fraudulent conveyance or transfer or voidable preference, insolvency or bankruptcy
challenges, financial assistance, preservation of share capital, thin capitalization,
capital maintenance, set-off counter-claims, and prescription (time bar) or similar
laws, regulation or defences affecting the rights of creditors generally. If one or
more of these laws and defences are applicable, a Subsidiary Guarantor may have
no liability or decreased liability under its Guarantee, as applicable, depending on
the amounts of its other obligations and applicable law.
11. Risk related to the Issuer as an entity with no operations of its own
The Issuer is an entity with no independent business operations and no significant
assets, other than the equity interests the Company holds in its subsidiaries. The
Issuer will be dependent upon the cash flows from its subsidiaries in the form of
dividends or others distributions or payments to meet its obligations, including its
obligations under the Notes. The amounts of dividends and distributions available
to the Company will depend on the profitability and cash flows of its subsidiaries
and the ability of its subsidiaries to issue dividends to it under the applicable law.
The subsidiaries of the Issuer, however, may not be permitted to make distributions,
move cash, or advance upstream loans to the Issuer to make payments in respect
of its indebtedness, including the Notes. Applicable laws and regulations, including
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tax laws, may also limit the amounts that the subsidiaries of the Issuer are permitted
to pay as dividends or distributions. Any restrictions on distributions by such
subsidiaries could adversely affect the ability of the Issuer to make payment on the
Notes.
IV. DECLARATION OF LIABILITY
1. Person responsible for the information contained in the Information
Memorandum
(a) Mr. Javier Quesada, as representative, in the name and on behalf of Teknia
Manufacturing Group, S.L.U. (interchangeably, “Teknia,” the “Company”
or the “Issuer”), duly authorized by virtue of the resolution of the board of
directors granted on 21 December 2018, is responsible for the entire contents
of this Information Memorandum (Documento Base Informativo de
Incorporación), which conforms to Circular 1/2015 of 30 September, on
admission (incorporación) and removal of securities on the Alternative
Fixed-Income Market (the “MARF”).
(b) Mr. Javier Quesada is expressly authorized to grant such public or private
documents as may be necessary for the proper processing of the Notes issued
under this Programme, as representative of the Company.
2. Statement of the person responsible for the content of the Information
Memorandum
Mr. Javier Quesada, as representative of Teknia Manufacturing Group, S.L.U.,
hereby declares that, after acting with reasonable care, the information contained in
this Information Memorandum is, to his knowledge, in full accordance with the
facts and contains no omissions likely to affect its content.
V. FUNCTIONS OF THE REGISTERED ADVISOR OF MARF
PKF ATTEST SERVICIOS EMPRESARIALES, S.L. is a company incorporated on
August 21st, 2002, before the notary public of Bilbao, Mr. Ignacio Alonso Salazar, duly
registered in the Commercial Registry of Vizcaya, Volume 4,205, Page 112, Sheet BI-
34713, and in the Registry of Registered Advisors pursuant to Operative Instruction
(Instrucción Operativa) 14/2014, of 12 November, in accordance with section 2 of the
Circular 3/2013, of 18 July, on Registered Advisors on the Alternative Fixed-Income
Market (“PKF Attest” or the “Registered Advisor”).
PKF Attest has been designated as Registered Advisor of the Issuer. Accordingly, the
Registered Advisor shall enable the Issuer to comply with the obligations and
responsibilities to be assumed on incorporating its issues into the multilateral trading
system, the Alternative Fixed-Income Market (“MARF” or the “Market”), acting as
specialist liaison between both, MARF and Teknia, and as a means to facilitate the
insertion and development of the same under the new securities trading regime.
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Therefore, PKF Attest must provide MARF with any periodically information it may
require and, on the other hand, MARF may require as much information as it may deem
necessary regarding the actions to be carried out and its corresponding obligations, being
authorized to perform as many actions as necessary, where appropriate, in order to verify
the information provided.
The Issuer must have, at any time, a designated Registered Advisor registered in the
“Market Registered Advisor Registry” (Registro de Asesores Registrados del Mercado).
PKF Attest has been designated as Registered Advisor of the Issuer in order to provide
advisory services to Teknia (i) on the admission to trading (incorporación) of the
securities issued, (ii) on compliance with any obligations and responsibilities applicable
to the Issuer for taking part on MARF, (iii) on compiling and presenting the financial and
business information required, and (iv) in order to ensure that the information complies
with these regulatory requirements.
As Registered Advisor, PKF Attest with respect to the request for the admission
(incorporación) to trading of the securities on MARF:
(i) has verified that the Issuer complies with the requirements of MARF’s
regulations for the admission (incorporación) of the securities to trading;
(ii) has assisted the Issuer in the preparation of the Information Memorandum,
has reviewed all the information provided by the Issuer to the Market in
connection with the request for the admission (incorporación) to trading
of the securities on MARF and has checked that the information provided
complies with the requirements of applicable regulations and does not
leave out any relevant information that could lead to confusion among
potential investors.
Once the securities are admitted to trading, the Registered Advisor will:
(i) review the information that the Issuer prepares for MARF periodically or
on a one-off basis, and verify that this information meets the requirements
concerning content and deadlines set out in the regulations;
(ii) advise the Issuer on the events that might affect compliance with the
obligations assumed when including its securities to trading on MARF,
and on the best way of treating such events in order to avoid breach of said
obligations;
(iii) report to MARF any events that could represent a breach by the Issuer of
its obligations in case it notices any potential and relevant breach that had
not been rectified following notification; and
(iv) manage, answer and deal with queries and requests for information from
MARF regarding the situation of the Issuer, progress of its activity, the
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level of compliance with its obligations and any other data the Market may
deem relevant.
Regarding the previous, the Registered Advisor shall perform the following actions:
(i) maintain regular and necessary contact with the Issuer and analyze any
exceptional situations that may arise concerning the evolution of the price,
trading volumes and other relevant circumstances regarding trading of the
Issuer’s securities;
(ii) sign any declarations which, in general, have been set out in the regulations
as a consequence of the admission (incorporación) to trading of the
securities on MARF, as well as with regard to the information required
from companies with securities on the Market;
(iii) forward to MARF, without delay, the communications received in
response to queries and requests for information the latter may send.
VI. INDEPENDENT AUDITORS
1. Name and address of the auditors of the Issuer for the period covered by the
historical financial information (together with their membership in a
professional body)
Moore Stephens AMS, S.L. (“Moore Stephens”), with registered office at
Cardenal Gardoqui, 9, Bilbao, tax identification number B-48.146.948 and
registered in ROAC with number S0516, has audited the consolidated annual
accounts of Teknia corresponding to the financial years ended 31 December 2016
and 2015.
Additionally, Moore Stephens AMS, S.L. is the auditor of all the Spanish
subsidiaries guarantors (Teknia Elorrio, S.L.U., Teknia Azuqueca, S.L.U., Teknia
Martos, S.L.U., Teknia Bilbao XXI, S.L.U., Teknia Pedrola, S.L.U., Teknia
Manresa, S.L.U., Teknia Epila, S.L.U., Teknia R&D, S.L and Teknia Montmelo,
S.L.U. -last two subsidiaries, limited review-) with the exception of Teknia
Barcelona, S.L.U. which is audited by Moore Stephens Addveris Auditores, S.L.,
and Moore Stephens network firms the auditor of all the international subsidiaries
guarantors (Moore Stephens Lima Lucchesi for Teknia Brasil Ltda., Moore
Stephens Central Audit S.p. z o.o. for Teknia Rzeszów S.A. and Teknia Kálisz, S.p.
z o.o., Moore Stephens s.r.o. for Teknia Uherský Brod, a.s, Moore Stephens
Revizija i Računovodstvo D.O.O. for Teknia KG D.O.O. and Marcelo de los Santos
y Cía, S.C. for Teknia Automotive Mexico S.A. de C.V.) except for Teknia
Nashville, LLC whose auditor as of December 2016 is Elliott Davis Decosimo
(Moore Stephens group).
- 47 -
2. If auditors have resigned, been removed from their duties or have not been re-
appointed during the period covered by the historical financial information,
indicate the details, if material
The Company's auditor has not resigned nor been removed from its duties during
the financial years 2016 and 2015.
The Sole Shareholder decided on 10 October, 2014 to appoint Moore Stephens
AMS, S.L. as independent auditors of the consolidated financial statements for the
year 2016. In addition to this, the Sole Shareholder has appointed MOORE
STEPHENS AMS, S.L. and other Moore Stephens network firms as: i) auditors of
the individual financial statements for each company, except Teknia USA, Teknia
Germany GmbH that are non-audited as Group consider them not significant ii)
responsible of the limited review of the individual financial statements of Teknia
Montmeló, S.L.U., Componentes de Automoción Marroquíes SARL and Teknia
R&D, S.L.U.
VII. INFORMATION ON THE ISSUER
1. Full name of the Issuer including its address and identification data
The full name of the Issuer is TEKNIA MANUFACTURING GROUP, S.L.U.
(“Teknia” or the “Issuer”). Its registered office is at Barrio San Agustín, s/n, 48230
Elorrio (Vizcaya).
The Issuer is a private limited company (sociedad limitada) incorporated on 30 July, 1998
by means of a public deed granted before the notary public of Bilbao, Mr. Andrés Mª
Urrutia Badiola, and duly registered in the Commercial Registry of Vizcaya, Volume
3,702, Page 22, Sheet BI-23069.
Its share capital amounts to twenty million and seventeen Euros and ninety cents (EUR
20,000,017.90), represented by three hundred and thirty-two thousand seven hundred and
seventy-nine (332,779) shares with a nominal value of sixty Euros and ten cents (EUR
60.10) per share.
The Tax Identification Number of the Issuer is B-48984090.
The Legal Entity Identifier (LEI) of the Issuer is 9598001382GF2BG2PP33.
Website: http://www.tekniagroup.com/
- 48 -
2. Description of the Issuer
2.1. Milestones of the Issuer
Teknia is engaged in the manufacture of automotive parts. Since its inception, the
Company has grown significantly in terms of revenues, earnings, and global presence,
becoming an international automotive parts manufacturer operating in 12 countries.
Teknia began and remains, as a family-owned company. It launched its activity through
the acquisition of Industrias Elix, which became Teknia Elorrio, but it was not until 1998,
after several other acquisitions on Spanish soil, that the Teknia Manufacturing Group was
founded.
The main milestones achieved along the history of the Issuer are the following:
During its 25-year history, the Company’s performance drivers have been:
- Geographical diversification: worldwide presence in the most important automotive
markets, enabling the Company to cover its clients’ needs in terms of quality, time
and costs. Currently, Teknia has 20 production plants (in nine countries), four
commercial offices, and five R&D centres that provide services to the whole Group.
The production plants are located in Spain (7), Brazil (3), Poland (2), USA (1),
Czech Republic (2), Morocco (1), Mexico (2), Serbia (1) and Turkey (1).
- 49 -
- Technological diversification: the Company specializes in the development and
manufacture of automotive components, assembly, and the design of specific
manufacturing processes. These services are carried out in three divisions: plastic,
metallic (including tubing and stamping), and machining. Additionally, Teknia has
an R&D division that supports the automotive business and enables the Group to
remain at the forefront of the industry.
- Close relationship with its major clients, which has led to the joint design of
international expansion strategies, in which Teknia has accompanied its clients as
a key supplier in new markets.
- Continuous growth: the company has made major strides in the commercial field,
with the opening of international sales offices, among others, in USA, Germany,
and South Korea, and a commercial office in China, with the goal of increasing
sales and enhancing its visibility with regard to international expansion.
2.2. Main Shareholders
The sole shareholder of Teknia, the Issuer of the transactions, is Mr. Javier Quesada, with
100% share participation in Teknia Manufacturing Group, S.L.U. through the investment
vehicle Siuled, S.L.
2.3. Organizational Structure
As of 31 December 2017, the Group is comprised of 25 registered companies (parent
company included), as follows:
- 50 -
1. Teknia Manufacturing Group, S.L.U., is the parent company of the Group and
bears its central costs, including the Management Team, Financial
Department, Human Resources Department, etc.
2. Teknia Elorrio, S.L.U. (Vat number: B48054225), manufactures metal parts
at the Elorrio and Eibar production facilities (Spain). Its Registered Office is
in Barrio de San Agustín, S/N Elorrio, (C.P.48230), Vizcaya, Spain.
3. Teknia Bilbao XXI, S.L.U. (Vat number: B48094288) together with Teknia
Montmelo, S.L.U. form Teknia Bilbao and manufacture machine parts at the
T. Bilbao facility (Spain). Its Registered Office is in Parque Empresarial Abra
Industrial, Vial H, Parcela 1,2,3; (C.P.48500), Abanto y Ciérvana, Spain.
4. Teknia Montmeló, S.L. (Vat number: B64857428) is included in the T. Bilbao
production facility as an independent business unit with the same technology.
Its Registered Office is in Pol. Ind. El Eixample C/ Comte de Montemolín,
39 Parets del Vallés, (C.P. 08150), Barcelona, Spain.
5. Teknia Pedrola, S.L.U. (Vat Number: B50871110) manufactures metal parts
at the Pedrola production facility (Spain). Its Registered Office is in Polígono
Industrial el Pradillo C/ Aneto, 23 Pedrola, (C.P.50690), Zaragoza, Spain.
6. Teknia Martos, S.L.U. (Vat number: B23068091) manufactures plastic
injection parts at the Martos production facility (Spain). Its Registered Office
is in C/Bailen 53, (C.P.23600), Martos, Jaén, Spain.
7. Teknia Azuqueca, S.L.U. (Vat number: B19101948) manufactures plastic
injection parts at the Azuqueca production facility (Spain). Its Registered
Office is in Polígono Industrial Miralcampo, calle Aluminio 4, (C.P.19200),
Azuqueca de Henares, Guadalajara, Spain.
8. Teknia Barcelona, S.L.U. (Vat number: B08658379) together with Segove
Cataluña S.L.U. form Teknia Barcelona (Spain) and manufacture machine
parts at the Barcelona facility (Spain). Its Registered Office is in Pol. Ind. El
Eixample C/ Comte de Montemolín, 39 Parets del Vallés, (C.P. 08150),
Barcelona, Spain.
9. Teknia Epila S.L.U. (Vat number: B11511565) is responsible for the purchase,
transfer, maintenance, storage and sale of machinery within the Group (Spain).
Its Registered Office is in Polígono Industrial Valdemuel, Avda. Opel España
S/N (C.P. 50.290) Épila, Zaragoza, Spain.
10. Teknia Manresa, S.L.U. (Vat number: B08575672) manufactures metal
parts at the Manresa production facility (Spain). Its Registered Office is in
C/Esteve Terradas, nº39; Polígono Industrial Bufalvent, (C.P.08243)
Manresa; Barcelona, Spain.
- 51 -
11. Teknia R&D, S.L. (Vat number: B85841351) handles the Company’s R&D
activity, including personnel, though each facility has R&D experts on its
workforce. Its Registered Office is in Plaza Marqués de Salamanca, 9, 7º
Izda, 28006, Madrid, Spain.
12. Teknia Germany GmbH (Vat number: DE262981717) includes the
Company’s central commercial department in Germany. Its aim is to
centralize the Company’s commercial activity and control the various
relations with the same client within the different divisions. It also plays an
important role in terms of R&D activity. Its Registered Office is in
Zimmermannstrasse 5, (C.P. 70182) Stuttgart, Germany.
13. Componentes de Automoción Marroquíes SARL (Vat number: 40281341)
manufactures plastic injection parts at the Tangier production facility
(Morocco). Teknia owns a 100% stake in the Rzeszow facility, the other 1%
stake is held by employees. Its Registered Office is in Zona Franca de
exportación ilot 13 lot 5, (C.P. 90000) Tanger, Morocco.
14. Teknia Polska Sp. z.o.o. (Vat number: 7010013924) manages the
Company’s activity in Poland and is the parent company of Teknia Kalisz
Sp.z.o.o. (Kalisz production facility) and Teknia Rzeszow S.A.(Rzeszow
production facility). Teknia owns a 100% stake in the Rzeszow facility. Its
Registered Office is in Warsaw (Poland).
15. Teknia Kálisz Sp. z.o.o. (Vat number: PL6181011972) manufactures metal
parts at the Kalisz and Popovek production facilities (Poland). Its Registered
Office is in ul. Złota 20ª (C.P.62-800) Kalisz, Poland.
16. Teknia Rzeszow, S.A. (Vat number: PL8130268113) manufactures plastic
injection parts at the Rzeszow production facility (Poland). Its Registered
Office is in ul. Przemyslowa 4, (C.P. 35-105) Rzeszow, Poland.
17. Teknia Uhersky Brod a.s (Vat number: CZ49971034) manages the
Company’s activity in the Czech Republic.It manufactures plastic injection
parts at the Nivnice and Uhersky Brod production facilities (Czech Rep). Its
Registered Office is in Rybarska, 2330 (C.P. 688 01) Uhersky Brod, Czech
Republic.
18. Teknia KG D.O.O. (Vat number: SB104487899) manufactures metal parts
at the Kragujevac production facility (Serbia). Its Registered Office is in
34000 Kragujevac, Serbia. Dragoslava Srejovica 56, Serbia.
19. TekniaSan Luis Potosí, S.A. de C.V. .. (Vat number: TAM 101202895)
manufactures plastic injection parts at the San Luis de Potosí production
facility (Mexico).Teknia owns a 97,090% stake in Mexico facility, the other
15% stake is held by a local partner who helps manage activities. Its
Registered Office is in Avenida CFE 788, Zona Industrial Rural, (C.P.
78395) San Luis Potosí, S.L.P., Mexico.
- 52 -
20. Teknia U.S.A., LLC (Vat Number: 80-0962044) is in charge of the technical
and commercial activities in the NAFTA area. Its Registered Office is in
Orchard Hill PL STE 600, Novi MI (USA).
21. Teknia Brasil Ltd. (Vat Number: 61.147.518/0001-47) manufactures plastic,
metal and machine parts at the three production facilities that the Company
currently operates in Brazil. Teknia owns a 100% stake in the Brazil facility,
the other 14.1% stake is held by a local partner who helps manage activities.
Its Registered Office is in Rua Ioneji Matsubayashi, 1.221 - Bairro Itaquera
- Sao Paulo - (CEP: 08260-050), Brasil.
22. Teknia Mexico City, S.A. de C.V. (Vat number: SAM8111234G2)
manufactures machine parts at the Mexico City production facility (Mexico).
Its Registered Office is in Avena 218, Colonia Granjas Mexico D.F. C.P.
08400, Mexico D.F., Mexico.
23. Teknia Nashville, LLC (formerly named Orchid Mt. Juliet) is engaged in
the production of hinges. Its Registered Office is 94 Belinda Parkway, Mt
Juliet, 37122 Tennessee, USA.
On July 2017 Teknia Manufacturing Group, SL, has segregated its corporate service unit
in a subsidiary service company named Teknia Entidad de Gestión, SL. It belongs 100%
to Teknia Manufacturing Group,SL and implies no change in day by day operating and
has no impact in Group Equity.
Beneath has been detailed the main figures of the audited individual financial statements
(Teknia Montmelo, S.L.U., Teknia R&D, S.L., Componentes de Automoción Marroquíes
figures correspond to limited reviews, not audit, and Teknia Nashville, LLC figures are
post due diligence process, not audited) of the most relevant subsidiaries with industrial
activity as of 31 December 2016:
Thousand of Euros
Teknia
Elorrio
Teknia
Pedrola Teknia Epila
Teknia
Barcelona
Teknia
Bilbao XXI
Teknia
Montmeló
Teknia
Martos
Teknia
Brasil
Teknia
Manresa Teknia KG
Total assets 10.293 7.780 2.145 10.796 10.138 2.692 13.749 16.792 12.815 1.461
Total Equity 4.186 1.504 1.016 2.446 3.256 868 5.110 8.800 6.533 971
Net turnover 20.020 11.784 2.036 23.489 16.435 3.563 30.329 20.565 24.279 1.507
Results from Operating expenses 1.730 128 192 1.243 515 568 3.120 (2.101) 3.018 25
Profit/ (Loss) for the period 1.505 83 168 877 254 409 2.338 (2.243) 2.369 25
Thousand of Euros
Teknia
Azuqueca
Teknia
Uhersky
Brod Teknia R&D
Teknia
Rzeszów
Teknia
Kálisz
Teknia
Automotive
Mexico
Teknia
Nashville
Component
es de
Automoción
Marroquies
Teknia Mexico
City
Total assets 18.751 20.929 499 15.748 23.647 9.521 19.614 2.911 3.072
Total Equity 6.147 11.096 59 7.384 6.256 3.239 9.305 375 1.228
Net turnover 42.425 25.350 825 22.989 25.063 10.029 20.469 2.874 4.083
Results from Operating expenses 2.190 2.585 (26) 2.524 265 (193) (152) 83 518
Profit/ (Loss) for the period 1.580 2.127 (26) 1.838 (347) (653) (54) 14 207
- 53 -
2.4. Corporate purpose
In accordance with article 5 of the Teknia Manufacturing Group, S.L.U. bylaws, the
corporate purpose of the Company is:
“…
1. The company's primary purpose is the promotion and development of companies
through temporary participation in their capital.
The following activities also constitute the corporate purpose of the Company:
a) The identification, investigation, negotiation, execution and monitoring of
investments in the capital of companies engaged in business activities.
b) The subscription, acquisition, holding, use and disposal, under any title, of
shares or other securities issued by those companies.
c) Offering loans, secured or unsecured, including participatory loans to these
companies;
d) Participation in the management of the subsidiaries and the provision of
services of:
e) Technical, economic and financial advice to them.
f) The purchase and sale, transfer, use, donation, lease and exploitation of
real estate.
g) The transfer, lease and by any other means, transmission of all types of
patents and trademarks.
h) The design, manufacturing, trading and marketing of related to the
automotive auxiliary, appliance and electrical, electronic and
telecommunications products industry.
i) Industrial research and exploitation of industrial property resulting from
that or the acquired.
j) By any other means, as rent or transfer.
- 54 -
2. The above activities may be carried out by the Company, in whole or in part,
either directly or indirectly through participation in other companies with similar
or identical object.
3. Expressly excluded are all activities for which the law mandates specific
requirements that cannot be met by this Company. In any case, the achievement
of social order shall be made in compliance with the existing legal regime.
4. If the laws demand any professional or administrative authorization or
registration in public records in order to exercise of any of the activities included
in the corporate purpose, such activities should be performed by persons having
the appropriate professional qualifications and, where appropriate, they may not
start before having completed the administrative requirements.
…”
2.5. Administrative and management bodies
2.5.1. Board of Directors
Since July 2017 the management of Teknia is entrusted to an Executive Board,
who is, as of the date of this Information Memorandum, composed of:
- President: Siuled, SL (represented by Mr. Javier Quesada Suescun)
- Board Members: Mr. Javier Lazpita Sarriugarte and Mr. Seth Ossorio Herrería
- Non-counsel Secretary: Mr. Diego Martel Muñoz-Cobos
2.5.2. Senior Management
The Senior Management structure of Teknia, as of the date of preparation of this
Information Memorandum, is as follows:
- 55 -
CVs of Senior Managers of the Teknia Manufacturing Group, S.L.U. are as
follow:
- Mr. Javier Quesada, representative of mercantile Siuled, SL, acting as
President of Teknia Group Board of Directors
- Javier has a degree in Industrial Engineering from Universidad de
Bilbao and a degree in Business Administration from IESE Business
School.
- Javier has more than 36 years of professional experience, most as the
Sales Director or CEO of several companies related to the
automotive components sector.
- Through the acquisition of a small company in 1992, Javier was able
to create an international auto parts manufacturer, currently present
in 12 countries.
- Javier speaks Spanish, French and English.
- 56 -
- Mr. Javier Lázpita, CEO
- Javier has a degree in Business Administration from Universidad del
País Vasco and completed a General Direction Program at IESE
Business School.
- Javier has more than 28 years of professional experience (the last 8
at Teknia) in the automotive component sector having held several
positions of responsibility.
- His main responsibility in Teknia is to achieve greater interaction
among the Company’s business lines. His main tasks include
identifying and approving industrial targets, evaluating the
implementation of strategic plans, and ensuring their success, etc.
- Javier speaks Spanish and English.
- Mr. Diego Martel, Non-Counsel Secretary. Legal Manager
- Diego has a degree in Law from Universidad Autónoma de Madrid.
- Diego has more than 22 years (the last 6 at Teknia) of professional
experience in positions of responsibility in the Legal and Human
Resources departments of major Spanish companies.
- Diego prepares and reviews the Group contracts and agreements,
advises on commercial and labour law, provides tax advice, and
coordinates with external legal firms.
Diego speaks Spanish and English.
- Mr. Javier Quesada de Luis, Commercial, Innovation and Strategy
Vice-President. CCO
- Javier has a degree in Business Administration from Universidad
Complutense de Madrid.
- Javier has more than 6 years of experience working in Teknia in
several positions, including managerial, focused his whole career on
Business Development activities.
- As C.I.&S Vice-President, is the responsible of Comercial and
Marketing áreas, R&D and Strategy and Planification areas.
- As CCO, his main responsibility is leading the area of Business
Development and Sales, managing all sale departments of the Group,
- 57 -
including Sales Offices, together with the COO’s and reporting to
the CEO.
Javier speaks Spanish, English and German.
- Mr. Rafael Morales, Industrial Vice-President. CPMO
- Rafael has a degree in Mechanical Industrial Engineering from
Escuela Tecnica Superior de Ingenieros Industriales de Sevilla.
- Rafael has more than 20 years of professional experience in the
automotive sector, 19 of them at Teknia in several positions of
responsibility such as product engineering manager, commercial
manager and plant manager.
- He is in charge of Quality, Lean Manufacturing, Procurement,
Energy & Environment, IT and Real Estate areas of the Group
Rafael speaks Spanish and English.
- Mr. Antonio Miralles, Corporate Vice-President. CFO
- Antonio has a degree in Business Administration from Universidad
de Jaen, an Executive Master Degree in Finance from Instituto de
Empresa and a Master Degree in Commercial Management and
Marketing from ESIC.
- Antonio has more than 17 years of professional experience. The last
11 years, he has been part of Teknia’s team, occupying different
financial positions.
- As Corporate Vice-President is the responsible of HR, Legal,
Accounting, Controlling, Taxation, M&A and Financial areas of the
Group.
- As CFO Antonio is in charge of the Group’s economic and financial
management, defined as: the preparation and presentation of
financial statements, management control, financial and insurance
management, investor’s relationship, optimization of tax policy and
investment appraisal, among others.
Antonio speaks Spanish and English.
- Mr. Juan Antonio Rendón, COO Nafta
- Juan Antonio has a degree in Technical Mechanical Industrial
Engineering from Universidad Politécnica de Cádiz, a masters in
- 58 -
Quality and Production Direction from IDE-CESEM, and a masters
in Business Administration from Instituto de Empresa.
- Juan Antonio has more than 15 years of experience in the automotive
sector, 14 of them at Teknia in several positions of responsibility
such as commercial manager, facility manager, and division
manager.
- Juan Antonio speaks Spanish and English.
- Mr. Robert Wdowczyk, COO Metallic
- Robert has a degree in Engineering from the Technical University of
Posen and completed a master in Mechanics and Mechanical
Engineering from the Technical University of Posen along with an
MBA from the Wielkopolska Business School / The Posen
University of Economics.
- Robert has more than 23 years (8 of them at Teknia) of experience
in the managerial positions.
- His main responsibility is the strategic direction and management of
the whole Metallic Division, and the control of its short, medium and
long term objectives.
- Robert speaks Polish and English.
- Mr. José María Sánchez, COO Plastic
- José has a degree in Technical Mechanical Industrial Engineering
from Universidad Pontificia Comillas - I.C.A.I.
- José has more than 25 years (12 of them at Teknia) of experience in
the automotive sector.
- His main responsibility is the strategic direction and management of
the whole Plastic Division, and the control of its short, medium and
long term objectives.
- José speaks Spanish and English.
- Mr. Michel Peña, COO Machining
- Michel has a degree in Technical Industrial Electronic Engineering
from Escuela Universitaria de Ingeniería Técnica Industrial de
- 59 -
Bilbao and completed a General Direction Program at IESE
Business School.
- Michel has more than 26 years of experience as an engineer, 20 at
Teknia where he has held several positions of responsibility such as
facility manager and purchase director.
- His main responsibility is the strategic direction and management of
the whole Machining division, and the control of its short, medium
and long term objectives.
- Michel speaks Spanish and English.
- Mr. Seth Ossorio, COO Brazil
- Seth has a Bachelor´s degree in Industrial Engineering from
Universidad de Bilbao and a a Master in Business Administration
from UPV.
- Seth has more than 14 years of professional experience. The last 6
years he has been part of Teknia’s team, occupying different
managerial positions.
- His main responsibility is the strategic direction and management of
Teknia’s Brazilian business, and the control of is short, medium and
long term objectives.
- Seth speaks Spanish, Portuguese and English.
- Mrs. Ángeles Martín, Human Resources Manager
- Ángeles has degree on Human Resources and Labor Relations by Rey
Juan Carlos University, Madrid.
- Ángeles career has been developed 100% in Human Resources area.
She is over 20 years experienced. Ángeles has performed the position
as Human Resources Manager in Teknia Azuqueca for the last 6 years.
Nowadays she is facing a new challenge as Teknia´s Corporative
Human Resources Manager. She started on this position last October
2017.
- Ángeles is responsible for of all Human Resources’ aspects as
recruitment & selection, labor relations, reward strategy
implementation and follow up , management performance & its
development, training definition & development, talent search &
retention, absenteeism management, etc.
- 60 -
- Mr. Lars Peter. CQO.
- Graduated with a Master degree in Industrial Management from
Osnabrueck University of Applied Science, Germany, Lars
enhanced his education with an Executive MBA from IE Business
School and an Executive Development Program coursed at ESIC
Business and Marketing School.
- Lars has 20 years of professional experience, most of them in the
automotive industry. He held managerial positions in international
project management and quality assurance. Lars joint Teknia as
Chief Quality Office in February 2017.
- Lars is responsible for all quality related aspects of the group,
including the global quality strategy and standards.
- Besides his German mother tongue Lars speaks Spanish and English.
2.6. Industry and Activity
2.6.1. Industry introduction1
The automotive manufacturing industry, which comprises the production of trucks,
passenger’s cars and motorcycles, has grew yearly since the “big crisis”. In terms of light
vehicles, its production reached 94.9 million units in 2016 (92,8 million units assembled
according to PwC analysis).
Most automotive OEMs’ (Original Equipment Manufacturer) are based in North America,
Western Europe and Japan/Korea (53.07% total global production), what has led to the
existence of a historically strong automotive industry in these areas. However, in recent
years, the competitive pressure in the industry, together with increased globalization, has
led to the flourishing of an industry increasingly important in emerging areas, especially
in China with a 29.6% of total manufactured light vehicles in 2016.
Among other emerging areas, China, India and Mexico could be highlighted because of
their future growth forecast.
1 Font: OICA. 2016 Production Statistics
- 61 -
This growing presence in emerging countries of the OEMs is forcing the rest of the
automotive industry players to become also global players, especially suppliers, which
should be very close to OEM’s production plants and manufacture 70-75% of the parts
constituting a vehicle. In this sense, many companies in the industry are making efforts
during the last years to increase their international presence.
By geographical areas, European markets are still significantly below saturation.
Nevertheless, after a year of important growth (+4,5%), industrial analyst of PwC2 gives
this market a short growth pause. Same analysts report considers “North America market
seems close to saturation, while local production capacity is being built up further”.
Talking about China, current potential of growth is the most important, not only because
of the demand highly growth, but also the sheer magnitude of the productions increase is
drastic. More upward potential is expected by PwC from a large number of emerging
markets, such as Russia, Brazil and Thailand, which have significant room for recovery
after extended crisis. “India, in particular seems set for a long-term growth increase, after
a temporary relapse in the last quarter of 2016 due to the cancellation of several
circulating rupee notes”.
2 PwC Autofacts. Analyst Note January 2017
- 62 -
The main characteristics of TIER 2 (Parts Manufacturers) industry are summarized in
these four points:
- Mature, atomized and highly competitive: due to the automotive sector’s
long trajectory, companies in this industry have a high degree of maturity.
Moreover, the requirement for specialized products and the proximity to the
client favour the existence of a high number of competitors (EUR 20-30 million
average sales). Due to these factors, there is a limited number of companies
that have been able to gain significant size with a diversified portfolio of
products and markets.
- High bargaining power agents: TIER 2 suppliers act as a link between
commodity suppliers and TIER 1 suppliers, both of which are sectors with a
high level of maturity and concentration. In this competitive atmosphere, some
small players have to negotiate with multinational companies, which have a
much higher bargaining power.
- High entry barriers: High investment requirements for manufacturing and
R&D related to processes and products, along with the difficulty associated
with integrating the production process to clients, are the barriers that make
entering this industry complex.
- Low threat of substitute products: The products offered by the automotive
industry are very well established in the market, almost considered a need in
the current society and thus the threat of substitution is estimated to be low.
- 63 -
2.6.2. Strategy
In order to continue with its international expansion and reinforce its role as a key global
automotive supplier for its clients, Teknia has designed a 2017-2021 Strategic Plan.
The plan consists of two main lines: i) an organic growth plan based on expanding current
facilities, and ii) an international acquisition plan, especially in those markets where the
Company is not currently operating.
The following map shows the target markets to be developed under the Strategic Plan:
- Market development-
The organic growth of the Company is based mainly on the following assumptions:
➢ Strong product, technology and process specialization, with the long-term goal of
providing state-of-the-art manufacturing capacities.
➢ Continuous incorporation of value added processes in all products/technologies.
➢ R&D annual investment of around 1.5% of total sales.
➢ Efforts in facility competitiveness.
➢ Global coordination of production facilities.
➢ Consolidation of operations in Brazil.
➢ Development of Mexican and NAFTA markets.
2
Teknia’s track-record in M&A transactions shows a prudent and conservative approach.To reinforce this inorganic growth, minority investor/s will be incorporated.
MID. EAST (Turkey)
ASIA (China & India)
NAFTA (USA & Mexico)
Teknia Group Strategy (Inorganic Growth)
SOUTH AMERICA(Brasil)
PACIFIC (Japan & S. Korea)
- 64 -
Additionally, market recovery is expected, as is the contribution of new plants at Teknia
Brazil, Kalisz (Poland), and Azuqueca (Spain).
In order to provide adequate support to its global customers, Teknia is developing an
intensive commercial plan, with the opening of technical & commercial offices:
➢ Stuttgart (Germany) – Opened in 2007, its main objective is to centralize and
coordinate commercial activity within the Company.
➢ Schenzhen (China) – Opened in 2008, its main objective is to help the tooling and
components purchase process, and to launch commercial activity in view of the
upcoming activity in the country.
➢ Seoul (South Korea) – Opened in 2011, its main objective is to be in charge of
commercial activity in the Asia area.
➢ Michigan (USA) – Opened in 2013, it is responsible for commercial activity in
the NAFTA area.
Regarding inorganic growth, i) acquisitions and ii) joint ventures are the potential options
envisaged by Teknia for growth in those markets where the Company wants to enter or
increase its presence.
The expertise of Teknia’s Management Team in identifying, acquiring and integrating
new businesses will play a key role in this process.
2.6.3. Trends in the industry
Suppliers are suffering intense price pressures while the demands for a greater
international presence are increasing. These require greater investments and increased
management complexity, which threatens the viability of a number of players and leads
to a consolidation process within the industry.
Suppliers should now follow OEMs in their emerging market activity, pursuing global
product concepts, global engineering launches and supply chains, which require global
coordination of regional production facilities, and a balanced cost reduction in order to
improve margins and profitability. In this sense, improved market conditions present
opportunities to obtain growth funds.
The market is, therefore, becoming more and more global in two main ways: while mature
market suppliers are trying to expand their activity via joint-ventures, acquisitions and
greenfield projects in the emerging markets (with the aim of adding flexible capacity to
meet new, higher production volumes and new programme launches), emerging market
suppliers are strengthening their capabilities through acquisitions in mature markets as a
result of intensified competition in their home markets.
Additionally, many emerging market companies are acquiring or reaching strategic
agreements with European/North American companies, with the aim of acquiring product
know-how. This is mainly due to the increasing demands of technology and quality in the
recently implemented OEMs.
- 65 -
2.6.4. Business Units
The Group consists in two main business lines: automotive and R&D. The R&D division
supports the automotive business and enables the Group to remain at the forefront of the
industry.
In the automotive business, the development and manufacture of automotive
components, assembly and the design of specific manufacturing processes, operates
through 3 divisions: plastic, metallic (including tubing and stamping) and machining.
The Plastic division is the largest in terms of sales (approximately 45,2% of total
aggregated sales in 2016), followed by the Metallic division (approximately 38,4% of
total sales), and the Machining division (approximately 16,4% of total sales).
The Company plans to continue focusing on i) the above mentioned technologies, in
which the Company has extensive expertise, knowledge and competitive advantages, ii)
the development of its business in Brazil, where the Company has carried out an important
investment (in terms of assets and commercial relationships) and expects high growth
rates in the coming years, and iii) the development of its business in Mexico.
The R&D division provides services such as: product development, prototype
manufacturing, and simulations for the automotive business.
Teknia relies on this division to ensure one of the most updated product ranges in the
industry with cutting-edge technology in its three divisions, and to be a true partner for
its clients rather than a mere provider.
The Head Office provides services such as: management, finance, human resources, IT,
sales and commercial activities, among others.
2.6.5. International expansion
According to the Strategic Plan, international expansion is one of ourmain growth pillars.
Teknia has a successful track record in cross-border M&A transaction. This enables the
company to havea large experience in identifying, acquiring and integrating industrial
companies into the Group.
Teknia’s will boost its international presence under the Strategic Plan with the entry into
new markets (India and China principally, but also NAFTA, Russia, Turkey and other
Eastern Europe countries) and the consolidation of the existing ones.
-Teknia’sBusiness Lines-
Teknia
Plastic Division Metallic Division Machining Division R&D Division Head Office
Automot ive business
- 66 -
The selection of those countries where Teknia wants to expand its activity is based on i)
client requests to accompany them in their international expansion, and ii) the expected
growth of selected target markets.
2.6.6. Sectors of activity
In this section information about each division is explained. The economic data reflected
corresponds to audited individual annual accounts aggregated Figures.
Plastic Division
The Plastic division is engaged in the manufacture of plastic automotive parts using
different technologies and semi or fully large-scale automated stations and assembly lines.
This division represented nearly 45,2% of the Group’s total aggregated sales in 2016,
with total aggregated turnover of EUR 138.2M in 2016 (around 80% to TIER 1 and the
rest to OEMs) and aggregated EBITDA of EUR 12.7M (9.2% margin). The aggregated
turnover for this division in previous years was: EUR 118.9M in 2015 and EUR 103.2M
in 2014. The aggregated EBITDA for this division in previous years was: EUR 9.3M in
2015 and EUR 5.4M in 2014. Additionally, it constitutes Teknia’s largest international
presence, with seven production facilities: Spain (2), Czech Republic (2), Poland (1),
Morocco (1), Brazil (1), Mexico (1) and Turkey3 (1).
In terms of sales, the facility located in Azuqueca (Spain) is the largest, with 31% of total
sales, followed by Martos (Spain) representing 22%.
The Plastic division manufactures its products through a wide variety of technologies and
machinery. Among them:
The Plastic division’s product range is as follows:
3 Shared facility with Metallic Division
Technology
• Inject ion moulding• Blow moulding• Surface coat ings / print ings
• Welding• Die-cut t ing
• Tool shop• Assembly
Machinery(# machines)
• Up to 100 tons (32)• From 100 - t o 300 tons (84)• From 300 - t o 500 tons (33)
• From 500 - t o 850 tons (20)• From 850 - t o 1100 tons (6)
• Over 1100 tons (5)• Blow moulding machines (3)
- 67 -
Metallic Division
The Metallic division is engaged in the manufacture of metallic automotive parts,
including tubing and stamping.
This division represented nearly 38.4% of the Group’s total sales, with total aggregated
turnover of EUR 117.4M in 2016 (around 80% to TIER 1 and around 20% to OEMs) and
aggregated EBITDA of EUR 5.5M (19.7% margin). The aggregated turnover for this
division in previous years amounted: EUR 85.6M in 2015 and EUR 85.3M in 2014. The
aggregated EBITDA for this division in previous years was: EUR 7.5M in 2015 and EUR
7.2M in 2014.The division has six production facilities; Spain (3), Brazil (2), Poland (1),
USA (1), Serbia (1) and Turkey (1).
In terms of sales, Manresa is the division’s largest plant, with 21% of sales. Nashville
(18,6%) and Kalisz (18,5%) are two other important plants for the division.
The Metallic division manufactures its products through a wide variety of technologies
and machinery. Among them:
The Metallic division’s product range is as follows:
Reservoirs
Brake f luid reservoirsCaps and f ilters
Fluid level indicatorsFloaters
Safety systems
Airbag coversSide seat airbags
Airbag mountingsHorn plates
Locking systems
Inter ior components
Cockpit and pillar coversMiddle consoles
Sun visorsBezels
Exter ior components
Water def lectorRocker panel cover
BumperWheel cut moulding
Roof rack
Other products
Other interior componentsHousing and channels
Cluster partsSeating systems
Air ducts
Trim / FabricsLight ing parts
Surge TanksAd-Blue Tanks
Windscreen bott les
Engine partsSolar parts
Technology
• Stamping• Transfert t ube vending• Bending & end-forming
• Welding & brazing• Assemblies
• Plat ings and coat ings• Leak-test ing
Machinery(# machines)
• Press 631 - 800 TN (1)• Press 451 - 630 TN (2)• Press 300 - 450 TN (11)
• Press up t o 299 TN (61)• Benders 24 –64 mm diam. (40)
• Transfert s benders (5)
- 68 -
Machining Division
The machining division is engaged in the manufacture of precision metallic components
for the automotive industry.
This division represented nearly 16,4% of the Group’s total aggregated sales, with total
aggregated turnover of EUR 45.9M in 2016 (around 95% to TIER 1 and around 5% to
OEMs) and aggregated EBITDA of EUR 5.0M (10.9% margin). The aggregated turnover
for this division in previous years amounted: EUR 47.9M in 2015 and EUR 39.5M in
2014. The aggregated EBITDA for this division in previous years was: EUR 5.0M in
2015 and EUR 3.0M in 2014. The division has four production facilities: Spain (2), Brazil
(1), and Poland4 (1).
In terms of sales, the facility located in Barcelona is the largest, with 47% of total sales,
followed closely by Bilbao (40%).
The Machining division manufactures its products through a wide variety of technologies
and machinery. Among them:
The Machining division’s product range is as follows:
4 Shared facility with Metallic Division
Fuel filler pipes
Complete Headrest
assemblies &
components
Pedalsets
Wiper Mechanism
Engine-cooling
climatization & turbo
Dipsticks, decantation
plates, filter covers
Oil tubes & strainers
Truck & Civil Engineer ing
tubes
Seat-belt pre -tensioners
& airbag deployment
components
Brakes
Tubes
Wiper Motor Brackets
Structural components
Electr ical Motor housings
Seat-pans
Pivot & motor cranks
Seat-podium for industr ial
vehicles
Hand-brake system
components
Other products
Technology
• Bar-turning• Second operat ions in t ransfer
machines
• Grinding and deburring• Small-scale sub-assemblies
• Stamping and folding
Machinery(# machines)
• Schut te mec 16-42 (20)• As14/sas16 mec 14-16 (31)• Wickman mec 16-42 (28)
• Schut te cnc 36 (2)• Index cnc 32-42 (8)
• Deco I cnc 13-32 (8)• Deco II cnc 20 (6)• Bs20 cnc 20 (6)
• Monohusillo cnc (6) • Others (5)
- 69 -
2.7. Declaration on the absence of significant changes in the prospects of the Issuer
Since the publication of the latest audited consolidated financial information as of 31
December 2016 and until the date of this Information Memorandum, there has been no
material adverse change in the outlook for the Teknia Manufacturing Group, S.L.U.
However, between 31 December 2016 and the date of this Information Memorandum, the
Teknia Group highlights the following facts:
- Teknia Manufacturing Group, S.L.U. acquired on January 11, 2017 the Turkish
company USTUN MAKINE, A.S. This company will be the base of the
development of all Teknia technologies in the Turkish market. Initially, it will be
focused on the Metallic Division.
Enterprise Value: EUR 4M, debt included
Payment: 100% upfront
- In February 2017, Teknia registered a commercial paper programme in MARF
with a maximum aggregate amount of Eur 25 million.
2.8. Information on significant changes in the prospects of the Issuer
As of the date of this Information Memorandum, Teknia Manufacturing Group, S.L.U. is
not aware of any trend, uncertainty, demand, commitment or adverse event which could
reasonably have a material effect on the prospects for the financial year 2017.
3. Reasons for the Issue and use of proceeds
The main purpose of the proceeds from this Programme will be to finance the corporate
acquisitions that are currently under analysis.
4. Financial information
4.1. Audited historical financial information
This section includes the Consolidated Financial Statements of the Teknia Group for
the years ended 31 December 2016 and 2015, which have been extracted from the
audited consolidated annual accounts of the Group for the years ended 31 December
2016 and 31 December 2015, included in “Annex 1” and “Annex 2” of this
Information Memorandum.
Fuel injection Transmission & EngineGear Shifts Braking SystemsAir conditioning &
Electr ical sector
- 70 -
The consolidated annual accounts as of 31 December 2016 and 2015, have been
prepared from the accounting records of the Group and are presented in accordance
with the commercial legislation and the established rules in the General Accounting
Plan approved by Royal Decree 1514/2007 and the amendments made thereto by
Royal Decree 1159/2010.
4.2. Financial Statements of the Issuer
Audited Consolidated Income Statement for the financial years ended on 31
December 2016 and 2015 (in thousands of Euros)
- 71 -
CO NSO LIDATED INCO ME STATEMENT
2016 2015 Var 16-15
A) CO NTINUING O PERATIO NS
1. Revenue 297.662 246.279 20,9%
a) Sales 294.979 245.031 20,4%
b) Services rendered 2.683 1.248 115,0%
2. Changes in inventories of finished goods and work in progress 2.389 1.048 128,0%
3. Work carried out by the company for own assets 1.100 572 92,3%
4. Supplies (166.666) (138.749) 20,1%
a) Merchandise used (8.847) (5.389) 64,2%
b) Raw materials and other consumables used (130.560) (109.850) 18,9%
c) Subcontracted work (27.217) (23.286) 16,9%
d) Impairment of merchandise, raw materials and other supplies (42) (224) -81,3%
5. O ther operating income 1.340 1.141 17,4%
a) Non-trading and other operating income 1.264 980 29,0%
b) Operating grants taken to income 76 161 -52,8%
6. Personnel expenses (65.646) (52.949) 24,0%
a) Salaries and wages (51.047) (40.877) 24,9%
b) Employee benefits expense (14.476) (12.024) 20,4%
c) Provisions (123) (48) 156,3%
7. O ther operating expenses (42.643) (36.925) 15,5%
a) Losses, impairment and charges in trade provisions (47) (326) -85,6%
b) Other operating expenses (42.596) (36.599) 16,4%
8. Amortisation and depreciation (9.787) (7.705) 27,0%
9. Non-financial and other capital grants 5 5 -
11. Impairment and gain/(losses) on disposal of fixed assets (19) 1.965 -101,0%
a) Impairments and losses - (317) -100,0%
b) Results due to divestment and others (19) 2.282 -100,8%
14. O ther results 135 141 -4,3%
A.1) RESULTS FRO M O PERATING ACTIVITIES
(1+2+3+4+5+6+7+8+9+10+11+12+13+14) 17.870 14.823 20,6%
15. Finance income 250 320 -21,9%
a) Dividends 3 3 -
b) Marketable securities and other financial instruments 10 99 -89,9%
c) Allocation of grants, donations and bequests of a financial nature 237 218 8,7%
16. Finance expenses (2.550) (1.688) 51,1%
18. Exchange gains/(losses) (1.079) (1.989) -45,8%
19. Impairment and profit/loss on divestment of financial instruments - (228) -100,0%
a) Impairments and losses - (228) -100,0%
A.2) NET FINANCE INCO ME/(EXPENSE) (14+15+16+17+18+19) (3.379) (3.585) -5,7%
A.3) PRO FIT/(LO SS) BEFO RE INCO ME TAX (A.1 + A.2 ) 14.491 11.238 28,9%
24. Income tax (3.521) (1.629) 116,1%
A.4) PRO FIT/(LO SS) FRO M CO NTINUING O PERATIO NS (A.3 +22) 10.970 9.609 14,2%
B) DISCO NTINUED O PERATIO NS - - -
A.5) CO NSO LIDATED PRO FIT/(LO SS) FO R THE PERIO D (A.4) 10.970 9.609 14,2%
Balance attributed to the parent company 10.987 9.659 13,7%
Balance attributed to external shareholders (17) (50) -66,0%
Thousand of Euros
- 72 -
Audited Consolidated Balance Sheet for the financial years ended on 31 December
2016 and 2015 (in thousands of Euros)
ASSETS
2016 2015 Var 16-15
A) NO N-CURRENT ASSETS 98.442 73.629 33,7%
I. Intangible fixed assets
1. Consolidated goodwill 6.661 2.495 167,0%
2. Research - -
3. Other intangible assets 2.910 2.833 2,7%
9.571 5.328 79,6%
II. Tangible fixed assets
1. Land and buildings 24.945 21.664 15,1%
2. Technical installations and other fixed material assets 47.933 31.517 52,1%
3. Fixed assets under construction and advances 1.276 3.284 -61,1%
74.154 56.465 31,3%
V. Long-term financial investments 2.542 501 407,4%
VI. Deferred tax assets 12.036 11.203 7,4%
VIII. Non-current trade receivables 139 132 5,3%
B) CURRENT ASSETS 115.014 90.597 27,0%
I. Non-current assets held for sale 220 -
II. Inventories 41.555 33.641 23,5%
III. Trade and other receivables
1 Trade receivables for sales and services 53.925 44.299 21,7%
2. Trade receivables from group companies and associates - 16 -100,0%
3. Current tax assets 663 1.109 -40,2%
4. Other receivables 3.247 2.225 45,9%
57.835 47.649 21,4%
IV. Current investments group companies and associates
1 Loans to related parties - 18 -100,0%
2. Other financial assets of group companies and associates - 3.345 -100,0%
- 3.363 -100,0%
V. Current investments 46 1 4500,0%
VI. Current accruals 1.082 1.082 0,0%
VII. Cash and other cash equivalents 14.276 4.861 193,7%
TO TAL ASSETS (A+B) 213.456 164.226 30,0%
Thousands of euros
- 73 -
TO TAL EQ UITY AND LIABILITIES
2016 2015 Var 16-15
A) EQ UITY 68.225 59.057 15,5%
A-1) Capital and reserves without valuation adjustments
I. Capital 20.000 20.000 -
III. Reserves 39.553 33.680 17,4%
VI. Net income attributed to the parent company 10.987 9.659 13,7%
70.540 63.339 11,4%
A-2) Valuation adjustments
II. Translation differences from consolidated companies (3.141) (5.405) -41,9%
(3.141) (5.405) -41,9%
A-3) Grants, donations and bequests received
I. In consolidated companies 662 858 -22,8%
662 858 -22,8%
A-4) External shareholders 164 265 -38,1%
B) NO N-CURRENT LIABILITIES 61.503 36.989 66,3%
I. Non-current provisions 642 491 30,8%
II. Non-current payables
1. Bonds and other marketable securities 19.635 -
2. Debt with credit entities 32.005 22.984 39,2%
3. Finance lease payables 1.021 296 244,9%
4. Other financial liabilit ies
4.1 Fixed assets suppliers 163 179 -8,9%
4.2 Other financial liabilit ies 6.508 11.694 -44,3%
59.332 35.153 68,8%
IV. Deferred tax liabilities 1.528 1.313 16,4%
V. Non-current accruals 1 32 -96,9%
C) CURRENT LIABILITIES 83.728 68.180 22,8%
II. Current provisions 919 1.592 -42,3%
III. Current payables
1. Bonds and other marketable securities 542 - -
2. Debt with credit entities 20.026 16.664 20,2%
3. Finance lease payables 1.120 537 108,6%
4. Other financial liabilit ies
4.1 Fixed assets suppliers 814 1.065 -23,6%
4.2 Other financial liabilit ies 690 651 6,0%
23.192 18.917 22,6%
IV. Current debt with group companies and associates
2. Other payables - - -
- - -
V. Trade and other payables
1. Suppliers 41.906 34.614 21,1%
2. Suppliers, group companies and associates - 7 -100,0%
3. Current tax liabilit ies 315 351 -10,3%
4. Other payables 17.136 12.418 38,0%
59.357 47.390 25,3%
VI. Current accruals 260 281 -7,5%
TO TAL EQ UITY AND LIABILITIES (A + B + C) 213.456 164.226 30,0%
Thousands of Euros
- 74 -
Audited Consolidated Cash Flow Statements of the financial years ended on 31
December 2016 and 2015 (in thousands of Euros)
- 75 -
CO NSO LIDATED CASH FLO W STATEMENT
2016 2015 Var 16-15
A) CASH FLO WS FRO M O PERATING ACTIVITIES
1. Profit/(loss) for the period before tax 14.491 11.238 28,9%
2. Adjustments for 13.082 7.610 71,9%
a) Amortisation and depreciation (+) 9.787 7.705 27,0%
b) Valuation allowances for impairment losses (+/-) 973 233 317,6%
c) Changes in provisions (+/-) 270 430 -37,2%
d) Grants recognised in the income statement (-) (242) (5) 4740,0%
e) Proceeds from disposals of fixed assets (+/-) 19 (2.282) -100,8%
g) Finance income (-) (250) (320) -21,9%
h) Finance expenses (+) 2.550 1.688 51,1%
k) Other income and expenses (-/+) (25) 161 -115,5%
3. Changes in operating assets and liabilities (8.782) (3.940) 122,9%
a) Inventories (+/-) (6.624) (1.493) 343,7%
b) Trade and other receivables (+/-) (6.899) (3.345) 106,2%
c) Other current assets (+/-) (45) (266) -83,1%
d) Trade and other payables (+/-) 5.567 1.638 239,9%
c) Other current liabilit ies (+ /-) (770) (413) 86,4%
f) Other non-current assets and liabilit ies (+/-) (11) (61) -82,0%
4. O ther cash flows from operating activities (4.050) (4.346) -6,8%
a) Interest paid (-) (1.964) (1.319) 48,9%
c) Interest received (+) 250 102 145,1%
d) Income tax received (paid) (2.336) (3.129) -25,3%
5. Cash flows from/used in operating activities (+/-1+/-2+/-3+/-4) 14.741 10.562 39,6%
B) CASH FLO W'S FRO M INVESTING ACTIVITIES
6. Payments for investments (-) (21.409) (19.921) 7,5%
a) Group companies, net cash flows in consolidated companies (422) (3.473) -87,8%
d) Intangible assets (618) (876) -29,5%
e) Property, plant and equipment (19.551) (15.572) 25,6%
g) Other financial assets (818) -
7. Proceeds from sale of investment (+) 2.490 8.670 -71,3%
e) Property, plant and equipment 2.425 8.670 -72,0%
g) Other financial assets 65 -
8. Cash flows front/used in investing activities (6+7) (18.919) (11.251) 68,2%
C) CASH FLO WS FRO M FINANCING ACTIVITIES
9. Proceeds from and payments for equity instruments (215) 82 -362,2%
a) Issue of equity instruments (+) - 74 -100,0%
e) Acquisition of equity instrument from external shareholders (-) (215) -
g) Grants, donations and bequests received (+) - 8 -100,0%
10. Proceeds from and payments for financial liability instruments 17.438 (626) -2885,6%
a) Issue
1. Bonds and other marketable securities (+) 19.600 -
2. Debt with credit entities (+) 13.675 19.392 -29,5%
5. Other debts (+) 1.142 528 116,3%
b) Redemption and repayment of
2. Debts with financial institutions (-) (10.751) (18.616) -42,2%
5. Other payables (-) (6.228) (1.930) 222,7%
11. Dividends and interest on other equity instruments paid (3.630) (3.525) 3,0%
a) Dividends (-) (3.630) (3.525) 3,0%
12. Cash flows from/used in financing activities (+/-9+/-10-11) 13.593 (4.069) -434,1%
D) EFFECT O F EXCHANGE RATE FLUCTUATIO NS - -
E) NET INCREASE/DECREASE IN CASH AND CASH EQ UIVALENTS (+/-5+/-8+/-12+/-D) 9.415 (4.758) -297,9%
Cash and cash equivalents at the beginning of the period 4.861 9.619 -49,5%
Cash and cash equivalents at the end of the period 14.276 4.861 193,7%
Thousands of Euros
- 76 -
4.3. Financial ratios as of 31 December 2016 and 2015
2016 2015
PERFORMANCE
EBT / Total Assets 6,8% 6,8%
Turnover / Total Assets 139,4% 150,0%
ROA (OP/Total assets) 8,4% 9,0%
ROE 16,1% 16,3%
Net Result / Turnover 3,7% 3,9%
EBITDA / Turnover 9,3% 9,1%
BALANCE STRUCTURE
Equity / Total Debt 47,0% 56,2%
Total Debt/ Total Equity and Liabilities 68,0% 64,0%
Non Current Liabilities / Current Liabilities 73,5% 54,3%
Cash and similar / Total Debt 9,8% 4,6%
Net Financial Debt / EBITDA (1)
2,47 2,18
Consolidated Profit for the Period / Financial Cost (2)
4,77 6,02
Bank Financial Debt / Total Debt 37,3% 38,5%
SHORT TERM STABILITY
Current Assets / Current LiabiIities 137,4% 132,9%
Current Assets - Inventories / Current Liabilities 87,7% 83,5%
Current Assets / Total Assets 53,9% 55,2%
(1) Net Debt includes all debt (M&A deferred payments included)
(2) Financial cost: Forex cost not included
- 77 -
4.4. Audit of historical annual financial information
4.4.1. Statement that historical financial information has been audited. If
audit reports on the historical financial information have been refused
by the auditors or if they contain qualifications or disclaimers, such
qualifications or disclaimers must be reproduced in full, explaining the
reasons.
The historical consolidated financial information of the Teknia Manufacturing
Group, S.L.U. corresponding to the years 2016 and 2015 has been audited by
Moore Stephens AMS, S.L. and the audit reports thereon contained no
qualifications.
4.4.2. Indication of other information in the Information Memorandum
which has been audited by the auditors
Non-applicable.
4.4.3. Where financial data in the Information Memorandum is not
extracted from the audited Financial Statements of the Issuer, you must
declare the source of the data and state that the data is unaudited
Componentes de Automoción Marroquíes, Teknia Montmeló, Teknia R & D and
Teknia Germany subsidiaries have been subject to a limited review of their
Financial Statements.
4.5. Age of the most recent financial information
The most recent consolidated financial information contained in this Information
Memorandum refers to the audited financial information as of and for the year
ended 31 December 2016.
4.6. Judicial, administrative and arbitration proceedings
As of the date of this document, the Teknia Group is not involved in any material
civil or administrative legal proceedings.
5. Significant changes in the financial or trading position of the Issuer
From 31 December 2016 until the date of this Information Memorandum, the
following loans have been obtained:
(a) Eur 2.824k funded to finance subsidiaries CAPEX. All those funds were
borrowed directly to subsidiary companies.
(b) On or about the date hereof Teknia established a Commercial Paper Programme
in the Spanish Alternative Fixed-Income Market (MARF) with a maximum
aggregate amount of Eur 25 million. With this new Commercial Paper
- 78 -
Programme Teknia continues to diversify its financing sources and reinforces its
presence in the capital markets.
VIII. DESCRIPTION OF THE NOTES
1. Total amount of the securities issued/admitted to trading
The maximum nominal amount of this Programme will be FORTY MILLION
EUROS (40,000,000 €). The securities to be issued under this Programme will be
senior unsecured simple notes (the “Notes”). Regarding the terms and conditions of
the securities, the Notes under the Programme will be issued pursuant to the template
attached as “Annex 4” hereto (the “Final Conditions”).
The Final Conditions of each issue will specify the nominal and total effective
amount of the Notes admitted to trading and the nominal and effective amount and
number of Notes to be admitted. The amount of each issue of the Notes under the
Programme could range between ONE MILLION EUROS (1,000,000 €) and
FORTY MILLION EUROS (40,000,000 €).
2. Date of issue of the Notes
The Final Conditions of each issue of Notes will establish the envisaged dates of
issue of the Notes, which may not exceed the validity period of this Programme.
The validity of this Programme is one (1) year as from the admission (incorporación)
of the same to MARF.
3. Form and Denomination
The Notes will be in uncertified, dematerialised book-entry form (anotaciones en
cuenta), subject to Royal Decree 878/2015 of 2 October on compensation, liquidation
and recording of marketable securities represented by book-entries, on the legal
regime of central securities depositories and central counterparties and on the
transparency requirements of the issuers of securities admitted to trading on an
official secondary market, as amended by Royal Decree 827/2017 of September 1
(Real Decreto 878/2015, de 2 de octubre sobre compensación, liquidación y registro
de valores negociables representados mediante anotaciones en cuenta, sobre el
régimen jurídico de los depositarios centrales de valores y de las entidades de
contrapartida central y sobre requisitos de transparencia de los emisores de valores
admitidos a negociación en un mercado secundario oficial en su redacción dada por
el Real Decreto 827/2017 de 1 de septiembre) (“RD 878/2015”).
Each Note will have a nominal value of EUR 100,000 (the “Authorised
Denomination”).
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4. Status of the Notes and Guarantee
a) Status of the Notes:
The Notes constitute direct, senior, unconditional, unsubordinated and, subject to the
provisions of Condition 9.1 (Negative Pledge), unsecured obligations of the Issuer
which (unless they qualify as subordinated credits under Article 92 of the Insolvency
Law) in the event of the insolvency (concurso) of the Issuer will, at all times, rank
pari passu among themselves and pari passu with all other present and future
unsecured and unsubordinated obligations of the Issuer, save for such obligations as
may be preferred by provisions of law that are both mandatory and of general
application, and in particular, save for such payment obligations that are preferred by
law under Articles 84, 90 and 91 of the Insolvency Law.
In the event of the insolvency (concurso) of the Issuer, under the Insolvency Law,
and assuming that the Notes remain unsecured, claims relating to the Notes (unless
they qualify as subordinated credits under Article 92 of the Insolvency Law) will be
ordinary credits (créditos ordinarios) as defined in the Insolvency Law. Ordinary
credits rank below credits against the insolvency estate (créditos contra la masa) and
credits with a privilege (créditos privilegiados). Ordinary credits rank above
subordinated credits. Accrued and unpaid interest due in respect of the Notes at the
commencement of an insolvency proceeding (concurso) of the Issuer will qualify as
subordinated credits. Under Spanish law, accrual of interest on the Notes shall be
suspended from the date of any declaration of insolvency.
b) Status of the Guarantee:
The Subsidiary Guarantors will unconditionally and irrevocably guarantee the due
and punctual payment of all sums from time to time payable by the Issuer in respect
of the Notes issued under the Programme.
This Guarantee of the Notes will constitute direct, general, unsubordinated and,
subject to the provisions of Condition 9.1 (Negative Pledge), unsecured obligations
of the Subsidiary Guarantors which (unless they qualify as subordinated credits under
Article 92 of the Insolvency Law) in the event of the insolvency (concurso) of the
Subsidiary Guarantors will, at all times, rank pari passu with all other present and
future unsecured and unsubordinated obligations of the Subsidiary Guarantors, save
for such obligations as may be preferred by provisions of law that are both mandatory
and of general application, and in particular, save for such payment obligations that
are preferred by law under Articles 84, 90 and 91 of the Insolvency Law.
5. Price of the Notes
The Notes may be issued at par value or for a lower or higher amount, as established
in the Final Conditions.
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6. ISIN Code
The information relating to the ISIN Code (International Securities Identification
Number), or any other codes used internationally, of each of the issues made under
this Programme will appear in the Final Conditions of the relevant issue.
7. Register, Title and Transfers
(a) Registration: The Notes issued under this Programme will be registered with
the Spanish Sociedad de Gestión de los Sistemas de Registro, Compensación
y Liquidación de Valores, S.A. Unipersonal, with its registered address at
Plaza de la Lealtad, 1, Madrid (“Iberclear”) that records all aggregate
securities balances for each of its participating entities (entidades
participantes) (the “Iberclear Members”). Each Noteholder's (as defined
below) title to the corresponding principal amount of the Notes is set out in
the registries maintained by the respective Iberclear Member or the Spanish
Central Registry itself if the holder is an Iberclear Member.
(b) Title: Title of the Notes issued under this Programme will be evidenced by
book-entry forms (anotaciones en cuenta), and each person shown in the
registries maintained by the respective Iberclear Members, as being a holder
of Notes shall be (except otherwise required by the applicable Spanish law)
considered the holder of the principal amount of the Notes recorded therein.
The "Holder" of a Note means the person in whose name such Note is for the
time being registered in the book-entry forms (anotaciones en cuenta) at
Iberclear or, as the case may be, the relevant Iberclear Member accounting
book and "Noteholder" shall be construed accordingly. One or more
certificates (each, a "Certificate") attesting to the relevant Holder's holding
of the Notes in the relevant registry will be delivered by the relevant Iberclear
Member or, where the Holder is itself an Iberclear Member, by Iberclear (in
each case, in accordance with the requirements of Spanish law and the
relevant Iberclear Member's or, as the case may be, Iberclear's procedures) to
such Holder upon such Holder's request.
(c) Transfers: The Notes issued under this Programme will be issued without any
restrictions on their transferability. Consequently, the Notes may be
transferred and title to the Notes may pass (subject to Spanish law and to
compliance with all applicable rules, restrictions and requirements of
Iberclear or, as the case may be, the relevant Iberclear Member) upon
registration in the relevant registry of each Iberclear Member and/or the
Iberclear itself, as applicable. Each Holder will be treated (except as
otherwise required by Spanish law) as the legitimate owner of the relevant
Notes for all purposes (whether or not it is overdue and regardless of any
notice of ownership, trust or any interest or annotation of, or the theft or loss
of, the Certificate issued in respect of it) and no person will be liable for so
treating the Holder.
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8. Guarantees and Security
The Notes will be fully and unconditionally guaranteed, jointly and severally, by the
Subsidary Guarantors.
a) Subject to the remaining provisions of this Condition 8, the payment of all
sums expressed to be payable by the Issuer under the Notes issued within the
framework of the Programme will be unconditionally and irrevocably
guaranteed on a joint and several basis (solidariamente) by the Subsidiary
Guarantors.
The Guarantees by the Subsidiary Guarantors shall be granted and in full force
prior to the disbursement date of the first issuance of Notes to be made under
the Programme. The Guarantees shall be extended in order to expressly secure
not only the first issuance of Notes but also any further issuances of Notes
made under the Programme up to its maximum amount.
The Collateralisation Ratio must represent at any time at least a 95% (the
“Minimum Collateralisation Ratio”).
In case a Subsidiary Guarantor has negative EBITDA, the EBITDA of such
Subsidiary Guarantor shall be considered zero (0) for the purposes of the
calculation of the Minimum Collateralisation Ratio only.
b) If the Minimum Collateralisation Ratio is not met, the Issuer shall at its sole
discretion (i) appoint additional fully owned (directly or indirectly)
Subsidiaries to act as Subsidiary Guarantors or (ii) grant a pledge over the
shares of any non-fully owned Subsidiary of the Issuer in accordance with
Condition 8.3 below (Accession of additional Subsidiary Guarantors or Share
Pledge over Subsidiaries).
c) In these Conditions, any such guarantee given by a Subsidiary Guarantor is
referred to individually as a “Guarantee” and, together, as the “Guarantees”.
For the purpose of Conditions 8 and 9:
“Consolidated EBITDA” means the consolidated earnings before interest,
taxes, depreciation and amortization of the Group, according to the last audited
annual consolidated financial statements available. For clarification purposes the
Consolidated EBITDA of the Group shall include the EBITDA of the Issuer and
the EBITDA of its Subsidiaries (only in the percentage owned by the Issuer in
the Subsidiaries).
“Collateralisation Ratio” means the ratio of (x) the Guarantors EBITDA to (y)
the Consolidated EBITDA.
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“EBITDA” means the earnings before interest, taxes, depreciation and
amortization of the Issuer or any Subsidiary, according to the last audited annual
financial statements available.
“Guarantors EBITDA” means the sum of (i) the EBITDA of the Issuer, (ii) the
Subsidiary Guarantors EBITDA and (iii) the EBITDA of those Subsidiaries in
which a Share Pledge over Subsidiaries has been granted.
“Subsidiary” means, with respect to any specified Person:
(1) any corporation, association or other business entity (other than a partnership,
joint venture or similar entity) (a) of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that Person
or one or more of the other Subsidiaries of that Person (or a combination
thereof); or (b) where that Person or one or more of the Subsidiaries of that
Person (or a combination thereof) have the right to appoint or remove a
majority of its board of directors or equivalent administration, management
or supervisory body; and
(2) any partnership, joint venture or similar entity (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are that Person or one or
more Subsidiaries of that Person (or any combination thereof).
“Subsidiary Guarantors”, means Teknia Elorrio, S.L.U., Teknia Pedrola,
S.L.U., Teknia Barcelona, S.L.U., Teknia Bilbao XXI, S.L.U., Teknia Martos,
S.L.U., Teknia Azuqueca, S.L.U., Teknia Manresa, S.L.U., Teknia Epila, S.L.U.,
Teknia Montmelo, S.L.U., Teknia R&D, S.L., Teknia Brasil Ltda., Teknia
Rzeszów S.A., Teknia Kálisz, S.p. z o.o., Teknia Uherský Brod, a.s, and Teknia
Nashville, LLC, and any other fully owned (directly or indirectly) Subsidiary of
the Issuer that guarantees the Notes from time to time; provided, in each case,
that a Subsidiary Guarantor shall cease to be a Subsidiary Guarantor upon a
Release Event.
“Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company, government or any agency or political subdivision thereof or
any other entity.
8.1. Subsidiary Guarantors
Without prejudice to universal liability of the Issuer, the Notes issued under the
Programme will be secured by an autonomous abstract and first demand guarantee
granted by the Subsidiary Guarantors.
The main features of each of the Subsidiary Guarantors are described below:
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Teknia Elorrio, S.L.U. (Vat number: B48054225). Its Registered Office is in Barrio de
San Agustín, S/N Elorrio, (C.P.48230), Vizcaya, Spain.
Teknia Bilbao XXI, S.L.U. (Vat number: B48094288). Its Registered Office is in
Parque Empresarial Abra Industrial, Vial H, Parcela 1,2,3; (C.P.48500), Abanto y
Ciérvana, Spain.
Teknia Montmeló, S.L. (Vat number: B64857428). Its Registered Office is in Pol. Ind.
El Eixample C/ Comte de Montemolín, 39 Parets del Vallés, (C.P. 08150), Barcelona,
Spain.
Teknia Pedrola, S.L.U. (Vat Number: B50871110). Its Registered Office is in
Polígono Industrial el Pradillo C/ Aneto, 23 Pedrola, (C.P.50690), Zaragoza, Spain.
Teknia Martos, S.L.U. (Vat number: B23068091). Its Registered Office is in C/Bailen
53, (C.P.23600), Martos, Jaén, Spain.
Teknia Azuqueca, S.L.U. (Vat number: B19101948). Its Registered Office is in
Polígono Industrial Miralcampo, calle Aluminio 4, (C.P.19200), Azuqueca de Henares,
Guadalajara, Spain.
Teknia Barcelona, S.L.U. (Vat number: B08658379). Its Registered Office is in Pol.
Ind. El Eixample C/ Comte de Montemolín, 39 Parets del Vallés, (C.P. 08150),
Barcelona, Spain.
Teknia Epila S.L.U. (Vat number: B11511565). Its Registered Office is in Polígono
Industrial Valdemuel, Avda. Opel España S/N (C.P. 50.290) Épila, Zaragoza, Spain.
Teknia Manresa, S.L.U. (Vat number: B08575672). Its Registered Office is in
C/Esteve Terradas, nº39; Polígono Industrial Bufalvent, (C.P.08243) Manresa;
Barcelona, Spain.
Teknia R&D, S.L. (Vat number: B85841351). Its Registered Office is in Plaza
Marqués de Salamanca, 9, 7º Izda , 28006, Madrid, Spain.
Teknia Kálisz Sp. z.o.o. (Vat number: PL6181011972). Its Registered Office is in ul.
Złota 20ª (C.P.62-800) Kalisz, Poland.
Teknia Rzeszow, S.A. (Vat number: PL8130268113). Its Registered Office is in ul.
Przemyslowa 4, (C.P. 35-105) Rzeszow, Poland.
Teknia Uhersky Brod a.s (Vat number: CZ49971034). Its Registered Office is in
Rybarska, 2330 (C.P. 688 01) Uhersky Brod, Czech Republic.
Teknia Brasil Ltd. (Vat number: 61.147.518/0001-47). Its Registered Office is in Rua
Ioneji Matsubayashi, 1.221 - Bairro Itaquera - Sao Paulo - (CEP: 08260-050), Brasil.
Teknia Nashville, LLC (VAT number: 62-1873673. Its Registered Office is in 94
Belinda Parkway, Mt Juliet, 37122 Tennessee, USA.
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8.2. Nature of the Guarantees
In accordance with the Guarantees, each guarantee shall constitute an autonomous
abstract and first demand guarantee (garantía abstracta a primer requerimiento),
and therefore shall not constitute a fianza¸ in accordance with article 1.822 of the
Spanish Civil law, and therefore the rights of order, excussion and division (orden,
excusión y división) shall not apply.
The Guarantees may be enforced by the Commissioner upon a default of the Notes
pursuant to Condition 16 (Events of Default). If the Guarantees become
enforceable, the Commissioner, prior favourable resolution of the Syndicate of
Noteholders, may at its discretion enforce any of them without further notice or
formality.
Noteholders may not, individually or collectively, take any direct action to enforce
any rights in their favour under the Guarantees. Noteholders may only act through
the Commissioner.
Notwithstanding the above, the Commissioner shall inform the Issuer about the
enforcement of any Guarantee to any Subsidiary Guarantor. The Commissioner
shall cancel any enforcement of the Guarantees once received all the amounts due
under each issue of Notes.
8.3. Accession of additional Subsidiary Guarantors or Share Pledge over
Subsidiaries
If the Subsidiary Guarantors at any time represent less than the Minimum
Collateralisation Ratio, the Issuer shall at its sole discretion within a ninety (90)
days period from the date in which the Minimum Collateralisation Ratio is not
met decide to (i) appoint additional fully owned (directly or indirectly)
Subsidiaries as Subsidiary Guarantors or (ii) grant a pledge over the shares (in the
relevant percentage held by the Issuer) of any non-fully owned Subsidiary (the
“Share Pledge over Subsidiaries”), in order to comply with such ratio.
In addition, even if the Minimum Collateralisation Ratio is met, the Issuer may
voluntary appoint additional Subsidiaries as Subsidiary Guarantor.
The Issuer shall procure the delivery to the Commissioner of any agreement
documenting the Guarantee or the Share Pledge over Subsidiaries mentioned
above in favour of the Noteholders.
If at any moment after the granting of the Share Pledge over Subsidiaries such
Subsidiary becomes a fully owned Subsidiary, the Commissioner undertakes to
promptly release such pledge and the Issuer shall cause such Subsidiary to become
a Subsidiary Guarantor following the procedure set forth in Condition 8.3 above,
provided that such accession is required to maintain the Minimum
Collateralisation Ratio.
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8.4. Release of Subsidiary Guarantors
If a Release Event (as defined below) has occurred with respect to a Subsidiary
Guarantor and (i) neither an Event of Default has occurred or is underway at that
time, or would occur as a consequence of such Release Event, (ii) nor any
Covenants under Condition 9 are breached, (iii) nor would the relevant Minimum
Collateralisation Ratio be breached as a consequence of such Release Event (the
“Release Conditions”), then the relevant Subsidiary Guarantor may be released
from its obligations under its Guarantee.
A “Release Event” shall include:
1. The full and final payment of all sums payable by, and the performance of
all the obligations of, the Issuer under the applicable issue of Notes under
the Programme;
2. The designation of the Issuer of that Subsidiary Guarantor as non-
guarantor subsidiary (“Non-Guarantor Subsidiary”). The Issuer, may
designate any Subsidiary Guarantor as a Non-Guarantor Subsidiary if the
Release Conditions are fulfilled.
If a Subsidiary Guarantor is designated as a Non-Guarantor Subsidiary,
the aggregate fair market value of all outstanding investments owned by
the Issuer and its Subsidiary Guarantors in the Subsidiary Guarantor
designated as a Non-Guarantor Subsidiary will be deemed to be an
investment made as of the time of designation and will reduce the amount
available for related party transactions under Condition 9.3 (Related-
party Transactions), for investments under Condition 9.7. (Limitation on
Investments), and for transactions with Non-Guarantor Subsidiaries under
Condition 9.9 (Transactions with Subsidiaries). Therefore, that
designation will only be permitted if the related-party transaction, the
investment, or the transaction with such subsidiary would be permitted at
that time and if the Subsidiary Guarantor otherwise meets the definition of
a Non-Guarantor Subsidiary, and therefore shall only be possible if the
Indebtedness Ratio, is less than 3.50, each determined on a pro forma
consolidated basis, assuming for these purposes that such release has been
made on the first day of the applicable Testing Period.
Any designation of Subsidiary Guarantor of the Issuer as a Non-Guarantor
Subsidiary will be evidenced to the Commissioner by filing therewith a
certified copy of the Board of Directors of the Issuer giving effect to such
designation and a certificate certifying that such designation complies with
Condition 8.3 and all Release Conditions.
The Board of Directors of the Issuer may at any time designate (or
redesignate) any Non-Guarantor Subsidiary to be a Subsidiary Guarantor
of the Issuer, in accordance with Condition 8.2; provided that such
designation (or redesignation, as the case may be) is deemed to be an
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incurrence of Indebtedness by such Subsidiary of the Issuer of any
outstanding Indebtedness of such Subsidiary, and such designation (or
redesignation) will only be permitted if (a) no Event of Default exists
following such designation (or redesignation).
3. As described under Condition 19 (Syndicate of Noteholders. Modification
and Waiver).
The Issuer shall promptly notify the Noteholders of the release of any Subsidiary
Guarantor pursuant to this Condition 8.4 (Release of Subsidiary Guarantors).
8.5. Limitations
If a Subsidiary of the Issuer who is required to be a Subsidiary Guarantor pursuant
to Condition 8 is prohibited or restricted by law from becoming a Subsidiary
Guarantor as confirmed by the opinion of independent legal advisers of
recognised standing, but such prohibition or restriction could be avoided by the
inclusion of limitations in the Guarantee to be given by it, such Subsidiary of the
Issuer shall become a Subsidiary Guarantor, provided that its Guarantee shall
incorporate and shall be subject to such limitations.
If, as a result of a change in law taking effect after the date on which a Subsidiary
becomes a Subsidiary Guarantor, the guarantee of any such Subsidiary Guarantor
becomes prohibited or restricted by law, but such prohibition or restriction could
be avoided by the inclusion of limitations in the relevant Guarantee, the Guarantee
of such Subsidiary Guarantor shall be deemed to incorporate the applicable
limitations as of the date such change in law comes into effect, and the Issuer shall
ensure that the Guarantee of such Subsidiary Guarantor is amended within 90 days
of the Issuer becoming aware of any such prohibition or restriction to reflect such
limitations.
In the circumstances described above, the limitations applicable to such Guarantee
shall be the minimum limitations required under relevant laws in order that the
prohibition or restriction is satisfied.
9. Covenants
The Notes to be issued under this Programme will contain the following
covenants, some of them to be determined in the relevant Final Conditions.
9.1. Negative Pledge
So long as any Note remains outstanding under this Programme, neither the Issuer
nor the Subsidiary Guarantors shall create or permit any Security Interest upon the
whole or any part of its present or future undertakings, assets or revenues
(including uncalled capital) to secure any Indebtedness or Guarantee of
Indebtedness without (i) at the same time, or prior thereto, securing the Notes
equally and rateably therewith, or (ii) providing such other security for the Notes
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as may be approved by an extraordinary resolution of Noteholders, unless such
Security Interest is a Permitted Security Interest, to secure any Indebtedness or to
secure the guarantee of any such Indebtedness.
For the purposes of this Condition:
“Guarantee” means, in relation to any Indebtedness of any Person, any
obligation of another Person to pay such Indebtedness including (without
limitation):
(a) any obligation to purchase such Indebtedness;
(b) any obligation to lend money, to purchase or subscribe shares or other
securities or to purchase assets or services in order to provide funds
for the payment of such Indebtedness;
(c) any indemnity against the consequences of a default in the payment of
such Indebtedness; and
(d) any other agreement to be responsible for such Indebtedness.
“Indebtedness” means any indebtedness of any Person for money borrowed
or raised including (without limitation) any indebtedness for or in respect of:
(i) amounts raised by accept under any accepted credit facility; (ii) amounts
raised under any note purchase facility; and (iii) the amount of any liability
in respect of leases or hire purchase contracts which would, in accordance
with applicable law and generally accepted accounting principles, be treated
as finance or capital leases.
“Issue Date”, means for the purposes of the covenants, the first issue date of
Notes under this Programme.
“Permitted Security Interest” means:
a. any netting or set-off arrangement entered into by any member of
the Group in the ordinary course of its financing arrangements for
the purposes of netting debit and credit balances, or a transaction
over cash accounts securing cash pooling arrangements;
b. any Security Interest in existence on the Issue Date to the extent that
it secures Indebtedness outstanding on such date;
c. any Security Interest over or affecting any asset existing at the time
it was acquired by a member of the Group after the Issue Date;
d. any Security Interest over or affecting any asset of any company
existing at the time it becomes a member of the Group after the Issue
Date;
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e. any Security Interest for tax being challenged diligently and in good
faith, taking into account applicable time and grace periods for any
such challenge;
f. any Security Interest created by or resulting from any litigation or
legal proceeding;
g. any Security Interest over any machinery or goods related to the
Permitted Business of the Group in the ordinary course of the Issuer
or the Subsidiary Guarantors’ business or operations up to a
maximum amount individually or in the aggregate of 10% of the
nominal value of the Notes at Issue Date; and
h. any Security Interest which replaces any other Security Interest
permitted under paragraphs (a) to (g) above inclusive and which
secures an amount not exceeding the maximum principal amount
secured by such permitted Security Interest,
provided that (i) the obligation secured by such Security Interest has
been incurred by any member of the Group and (ii) the total obligations
secured by all the Security Interest at any time do not represent more
than the total amount of Consolidated EBITDA on the last Calculation
Date.
“Security Interest” means any mortgage, charge, pledge, lien or other
security interest including, without limitation, anything analogous to any of
the foregoing under the laws of any jurisdiction.
9.2. Change of Control
If a Change of Control occurs, each Noteholder shall have the option to require
the Issuer to redeem or, at the Issuer's option, purchase (or procure the purchase
of) in whole or in part its Notes at a price equal to 101 percent of their principal
amount plus accrued and unpaid interest up to (but excluding) the date for such
redemption or purchase (the “Put Option”).
If a Change of Control occurs, then the Issuer shall, without undue delay, after
becoming aware thereof, give notice of the Change of Control (a “Put Event
Notice”) to the Noteholders in accordance with Condition 21 (Notices) specifying
the nature of the Change of Control.
To exercise the Put Option, a Noteholder must within the Put Period block such
Note(s) or instruct the Spanish Central Registry or its Iberclear Member to block
such Note(s) and deposit a duly signed and completed notice of exercise in the
then current form obtainable from the Paying Agent (a “Put Notice”) in which the
Noteholder must specify a bank account to which payment is to be made under
this Condition 9.2 at the specified office of the Paying Agent, during normal
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business hours on any business day in the city of the specified office of the Paying
Agent.
The Issuer shall redeem or, at its option, purchase (or procure the purchase of),
the relevant Note(s) on the date (the “Put Date”) seven days after the expiration
of the Put Period unless such Notes are previously redeemed or purchased and
cancelled. A Put Notice, once issued, shall be irrevocable.
For the purpose of these Conditions:
“Change of Control” shall occur in respect of the Issuer if (i) one or more
persons, acting individually or in concert, acquire Control, directly or
indirectly, of the Issuer; (ii) the Controlling Shareholder acting together or, as
the case may be, in concert with any other Person or Persons, losses Control,
directly or indirectly, of the Issuer; (iii) the Issuer consolidates with or merges
into another person and where the Issuer is not the continuing entity; and (iv)
the sale, lease, conveyance or other disposition of all or substantially all of
the assets of the Issuer taken as a whole.
“Put Period” means the immediately succeeding 90 days period after the date
on which a Put Notice has been published in accordance with Condition 21.
“Control” has the meaning assigned to that term in Article 42(1) of the
Spanish Commercial Code.
“Controlling Shareholder” means Siuled, S.L.
9.3. Related-party Transactions
So long as any Note remains outstanding under the Programme, the Issuer will
not, and will not permit any Subsidiary Guarantor to (i) enter into any agreement
or transaction with any Related Party which is not under normal market conditions
and (ii) enter into agreements having their termination date prior to the maturity
date of the Notes.
Notwithstanding the above, the Issuer and the Subsidiary Guarantors will be
permitted to:
a) enter into any netting or set-off arrangement entered into by any member of
the Group in the ordinary course of its financing arrangements for the purposes
of netting debit and credit balances, or a transaction over cash accounts
securing cash pooling arrangements; and
b) engage in the sale and lease back of real estate assets, provided however that
(i) the proceeds obtained from this sale and lease back are not distributed as
dividends or any other Distribution as defined in Condition 9.6. and (ii) that
Condition 9.5. shall apply.
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For the purpose of these Conditions:
“Related Party” means (i) any of the shareholders, directors or officers of
the Issuer, all of them directly or through entities, and any entity over which
the Issuer exercises control, in accordance with the definitions contained in
this regard in article 42(1) of the Commercial Code (Código de Comercio),
or hold a direct or indirect interest equal to or greater than 25% of the share
capital of such entity, and (ii) any of the directors or officers of the
Subsidiaries, all of them directly or through entities, and any entity over
which the Subsidiary exercises control, in accordance with the definitions
contained in this regard in article 42(1) of the Commercial Code (Código de
Comercio), or hold a direct or indirect interest equal to or greater than 25%
of the share capital of such entity.
9.4. Limitation on Indebtedness
So long as any Note remains outstanding under the Programme, the Group (being
the “Group” the Issuer and its Subsidiaries) shall not, after the Issue Date, incur
any additional Indebtedness, if on the Calculation Date the Indebtedness Ratio
exceeds 3.50 to 1.00, determined on a pro forma consolidated basis, assuming for
these purposes that such additional Indebtedness had been incurred, and the net
proceeds thereof applied.
For purposes of determining compliance with any euro-denominated restriction
on the incurrence of Indebtedness, the Euro Equivalent of the principal amount of
Indebtedness denominated in another currency will be calculated based on the
most recently published annual financial statements to the extent shown therein or
otherwise, based on the relevant currency exchange rate in effect on the date such
Indebtedness was incurred, in the case of term Indebtedness, or first committed,
in the case of Indebtedness incurred under a revolving credit facility; provided
that, if and for so long as any such Indebtedness is subject to an agreement
intended to protect against fluctuations in currency exchange rates with respect to
the currency in which such Indebtedness is denominated covering principal and
interest on such Indebtedness, the amount of such Indebtedness, if denominated
other than in Euros, will be the amount of the principal payment required to be
made under such currency agreement and, otherwise, the Euro Equivalent of such
amount plus the Euro Equivalent of any premium which is at such time due and
payable but is not covered by such currency agreement.
For the purpose of these Conditions:
“Calculation Date” means, for the purposes of calculating the Indebtedness
Ratio, the date on which the last audited annual consolidated financial
statements are available.
“Euro Equivalent” means, with respect to any monetary amount in a
currency other than Euros, at any time of determination thereof, the amount
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of Euros obtained by converting such currency other than Euros involved in
such computation into Euros at the spot rate for the purchase of Euros with
the applicable currency other than Euros as published in the Financial Times
in the “Currency Rates” section (or, if the Financial Times is no longer
published, or if such information is no longer available in the Financial Times,
such source as may be selected in good faith by the Issuer) on the date of such
determination.
“Indebtedness Ratio” means as of any Calculation Date, the ratio of (x) the
Net Financial Debt for the relevant Testing Period preceding such Calculation
Date of determination to (y) the Consolidated EBITDA accrued during the
relevant Testing Period. In the event that the Group incurs, assumes,
guarantees, repays, repurchases, redeems, or otherwise discharges any
Indebtedness subsequent to the commencement of the period for which the
calculation of the Indebtedness Ratio is made, then the Indebtedness Ratio
will be calculated giving pro forma effect (as determined in good faith by a
responsible accounting or financial officer of the Issuer) to such incurrence,
assumption, guarantee, repayment, repurchase, redemption or other discharge
of Indebtedness, and the use of the proceeds there from, as if the same had
occurred at the beginning of the applicable Testing Period.
“Net Financial Debt” means, at the relevant Calculation Date, the difference
between financial debt (bank borrowings, debt instruments and other
marketable securities, both long and short term) and cash and cash equivalents
(cash and bank deposits and other liquid investments with settlement in a term
no longer than T+3) according to the last consolidated audited annual
accounts available. For the purposes of calculating the consolidated Net
Financial Debt the following calculations shall be considered: (i) if the
financial debt of the Subsidiary is guaranteed by the Company, such financial
debt would be fully taken into account, while (ii) if the financial debt of the
Subsidiary is not guaranteed by the Company, only the financial debt of the
Subsidiary multiplied by the relevant stake of the Company in such
Subsidiary would be considered.
“Testing Period” means, with respect to any Calculation Date, the last
audited annual consolidated financial statements used for the calculation to
be made at such Calculation Date.
Irrespective of the Indebtedness Ratio the Issuer and the Subsidiary Guarantors
are permitted to incur or permit Indebtedness under cash pooling arrangements in
the ordinary course of business.
9.5. Limitation on sale of assets and mandatory tender offer for the Notes
The Issuer and the Subsidiary Guarantors will not undertake an Asset Sale unless
(i) such Asset Sale is made on an arm’s length basis, and (ii) at least, 75 percent
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of the price is paid in Cash or Cash Equivalent on the date of execution of the
Asset Sale.
The Issuer undertakes to apply towards reinvestment in the Issuer’s or Subsidiary
Guarantor’s ordinary business any proceeds obtained from an Asset Sale within
the 365 days following the completion of such Asset Sale. Should the Issuer or
the applicable Subsidiary Guarantor not reinvest the net proceeds (that is,
deducting from such proceeds any taxes and expenses related to such Asset Sale)
from the Asset Sale within the aforesaid time period the proceeds not reinvested
shall be considered as “Excess Proceeds”. If, at any time during any given
financial year, the amount of Excess Proceeds arising from a single or a series of
Asset Sales is above EUR 15,000,000, the Issuer shall launch, within a three
month period from the date on which the Excess Proceeds exceed EUR
15,000,000, a tender offer targeting to all Noteholders for purchase on a pro rata
basis at a price equal to 101 percent of the principal amount plus interest accrued.
Notwithstanding the preceding, any single transaction or series of related
transactions that involves assets having a Fair Market Value of less than EUR
250,000, will not be deemed to be an Asset Sale.
For the purpose of these Conditions:
“Asset Sale” means the sale, lease, conveyance or other disposition of any
assets by the Issuer or any of its Subsidiaries.
"Cash Equivalents" means:
(a) direct obligations (or certificates representing an interest in such
obligations) issued by, or unconditionally guaranteed by, the
government of a member state of the European Union (except Greece),
the United States of America, Switzerland, or Canada (including, in
each case, any agency or instrumentality thereof), as the case may be,
the payment of which is backed by the full faith and credit of the
relevant member state of the European Union or the United States of
America, Switzerland, or Canada, as the case may be, and which are not
callable or redeemable at the Issuer's option;
(b) overnight bank deposits, time deposit accounts, certificates of deposit,
bankers' acceptances and money market deposits (and similar
instruments) with maturities of 12 months or less from the date of
acquisition issued by a bank or trust company which is organised under,
or authorised to operate as a bank or trust company under, the laws of a
member state of the European Union (except Greece) or of the United
States of America or any state thereof, Switzerland or Canada; provided
that such bank or trust company has capital, surplus and undivided
profits aggregating in excess of EUR 500,000,000 (or the foreign
currency equivalent thereof as of the date of such investment) and
whose long-term debt is rated Baa2 or higher by Moody's Investors
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Service, Inc. ("Moody's"), BBB or higher by Standard & Poor's Ratings
Group ("S&P"), BBB or higher by Fitch Ratings Limited ("Fitch"), or
BBB by DBRS Ratings Limited ("DBRS") (or the equivalent rating
category of another internationally recognised rating agency);
(c) repurchase obligations with a term of no greater than 30 days or such
shorter period until the immediately following the relevant interest
payment date or the Maturity Date, for underlying securities of the types
described in paragraphs (a) and (b) above entered into with any
financial institution meeting the qualifications specified in paragraph (b)
above;
(d) commercial paper having one of the two highest ratings obtainable from
Moody's, S&P, Fitch or DBRS, and, in each case, maturing within one
year of the date of acquisition; and
(e) holdings in money market funds at least 95 per cent. of the assets of
which constitute Cash Equivalents of the kinds described in paragraphs
(a) through (d) of this definition.
“Fair Market Value” means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the Issuer, which
determination shall be conclusive if evidenced by a board resolution.
“Maturity Date” means the date in which the Notes issued under the
Programme and with the longer maturity in time matures.
9.6. Limitation on Dividends
So long as any Note remains outstanding, the Issuer shall not pay, make or declare
any dividend or other Distribution (in kind or in cash) when the Indebtedness
Ratio for the previous financial year ended 31 December, exceeds 3.50 to 1.0.
In the event that the Indebtedness Ratio falls below 3.50 to 1.0, the Issuer shall be
entitled to pay a dividend or other Distribution not exceeding 40 percent of the
Ordinary Benefit but only in respect of such Testing Period and not in respect of
any earlier Testing Period, provided that, as a consequence of such Distribution,
the Indebtedness Ratio is still below 3.50 to 1.0.
For the purpose of these Conditions:
“Distribution” means the payment by the Issuer of any dividend, the
redemption or repurchase of any of the Issuer’s shares, the repayment of any
Indebtedness granted by the Issuer to its shareholders, the Controlling
Shareholder or any of its Subsidiaries or otherwise subordinated or any other
cash distribution to the shareholders, Controlling Shareholder or any of its
Subsidiaries.
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“Ordinary Benefit” means, with respect a Testing Period, the ordinary
benefit available for distribution (beneficio ordinario) of the Issuer, in
accordance with the audited annual individual financial statements of such
Testing Period; therefore, excluding any extraordinary benefit (beneficio
extraordinario) as declared in said audited annual individual financial
statements.
9.7. Limitation on Investments
The Issuer will, and will cause or permit any of its Subsidiaries to, directly or
indirectly, only make Investments in Permitted Business if at the time of any such
Investment:
(a) no Event of Default (as defined in Condition 16 (Events of Default)) has
occurred or is underway, and is continuing or would occur as a consequence
of such Investment; and
(b) the Indebtedness Ratio is less than 3.50, each determined on a pro forma
consolidated basis, assuming for these purposes that such Investment has
been made on the first day of the applicable Testing Period, provided that
irrespective of the Indebtedness Ratio, the Issuer and the Subsidiary
Guarantors are permitted to make investments in the Issuer or any of the
Subsidiary Guarantors.
In case any of the said Subsidiary Guarantors are designated as Non-
Guarantor Subsidiary in accordance with Condition 8.4. the release of such
Subsidiary Guarantor shall be subject to the fulfilment of the Release
Conditions, as detailed in such Condition 8.4.
For the purpose of this Condition:
“Investment” means with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Subsidiaries) in the
forms of loans (including guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, or securities, together with all
items that are or would be classified as investments on a balance sheet
prepared in accordance with Spanish GAAP.
“Permitted Business” means (a) any businesses, services or activities
engaged in by the Issuer or any of its Subsidiaries on the Issue Date (each a
“Permitted Activity”); and (b) any businesses, services and activities
engaged in by the Issuer or any of its Subsidiaries that are related,
complementary, incidental, ancillary or similar to any Permitted Activity or
are extensions or developments of any Permitted Activity.
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9.8. Limitation on Structural Modifications
So long as any Note remains outstanding, the Issuer will not, and will not cause
or permit any Subsidiary to, pass a resolution for the winding-up (liquidación),
dissolution (disolución), reconstruction, amalgamation, reorganisation, merger or
consolidation with or into another Person (a “Structural Modification”), of the
Issuer or any Subsidiary, unless:
(a) such Structural Modification is constrained by law; or
(b) such Structural Modification does not actually involve or may eventually
involve a downgrade of the credit rating of the Issuer granted by any
registered and certified credit rating agency authorized by ESMA, and
(c) such Structural Modification does not actually involve a breach of the
Indebtedness Ratio.
This covenant will not apply to (i) any Structural Modification among Subsidiary
Guarantors, (ii) any Structural Modification among Subsidiary Guarantors and the
Issuer;(iii) among Subsidiaries and the Issuer, being the company subsiting the
Issuer, or (iv) to the transformation of the Issuer from a private limited company
(sociedad de responsabilidad limitada) into a public limited company (sociedad
anónima).
9.9. Transactions with Subsidiaries
The Issuer will not, and will not cause or permit any of its Subsidiary Guarantors
to, make any payment to or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into or
make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Subsidiary of the Issuer in
excess of EUR 2,000,000 (each, a “Subsidiary Transaction”), unless the
Subsidiary Transaction is (x) on terms that are no less favourable to the Issuer or
the relevant Subsidiary Guarantor than those that would have been obtained in a
comparable transaction by the Issuer or such Subsidiary Guarantor with an
unrelated Person and (y) otherwise in compliance with the requirements of
Spanish law.
The following items will not be deemed to be Subsidiary Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(a) any employment agreement, collective bargaining agreement, consultant or
employee benefit arrangements with any employee, consultant, officer or
director of the Issuer or any Subsidiary Guarantor, including under any share
option, share appreciation rights, share incentive or similar plans, entered into
in the ordinary course of business;
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(b) payment of reasonable and customary fees and reimbursements of expenses
(pursuant to indemnity arrangements or otherwise) of officers, directors,
employees or consultants of the Issuer or of any of the Subsidiary Guarantors;
(c) loans or advances to employees for travel and relocation in the ordinary
course of business not to exceed EUR 1,000,000 in the aggregate at any one
time outstanding;
(d) transactions between or among the Issuer and/or the Subsidiary Guarantors
(including loans or advances);
(e) any issuance of Equity Interests of the Issuer to Subsidiary Guarantors of the
Issuer;
(f) any transaction between or among the Issuer and/or Subsidiary Guarantors
and any joint venture (a) pursuant to the terms of the respective joint venture
agreement or (b) in the ordinary course of business; and
(g) transactions with customers, clients, suppliers, purchasers or sellers of goods
or services or providers of employees or other labour, in each case in the
ordinary course of business and otherwise in compliance with the terms of
these Conditions that are fair to the Issuer or the Subsidiary Guarantors, in the
reasonable determination of the members of the Board of Directors of the
Issuer or the senior management thereof, or are on terms at least as favourable
as might reasonably have been obtained at such time from an unaffiliated
Person.
9.10. Information and Reports
So long as any Notes issued under this Programme are outstanding, the Issuer shall
provide the Commissioner (which information shall be available to Noteholders
at the specified office of the Commissioner):
(a) as soon as the same become available, but in any event within 120 days after
the end of each of its financial years, a copy of its audited consolidated
financial statements for that financial year, starting with the financial year
ending 31 December 2016;
(b) promptly after the occurrence of a material acquisition, disposition,
restructuring of the Issuer and its Subsidiaries taken as a whole or change in
auditors or any other material event of the Issuer and its Subsidiaries taken as
a whole, a copy of each notice provided to the MARF in accordance with
applicable regulation containing a description of such event.
For clarification purposes, the Commissioner assumes no responsibility for the
authenticity, accuracy or correctness of the information, reports or certifications
provided by the Issuer.
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10. Interest
The Notes might be issued with fixed or variable interest rate, as determined in the
relevant Final Conditions (the “Interest Rate”). Interest Rate shall accrued from the
disbursement date of each issue until its maturity date and subject as provided in
Condition 12 (Payments).
Each Note will cease to bear interest when such Note is redeemed or repaid pursuant
to Condition 11 (Redemption and Purchase) or Condition 16 (Events of Default),
from the due date for redemption thereof unless, upon due presentation thereof,
payment of the principal amount of the Notes is improperly withheld or refused, in
which event interest will continue to accrue at such rate (both before and after
judgment) until whichever is the earlier of (i) the day on which all sums due in respect
of such Note up to that day are received by or on behalf of the relevant Holder, and
(ii) the 7 (seven) days after the Paying Agent has notified Noteholders of receipt of
all sums due in respect of all the Notes up to that seventh day (except to the extent
that there is failure in the subsequent payment to the relevant Holders under these
Conditions).
If interest is to be calculated in respect of a period which is equal to or shorter than
an Interest Period, it shall be calculated by applying the Interest Rate to the
Authorised Denomination, multiplying the product by the relevant Day Count
Fraction and rounding the resulting figure to the nearest cent (half a cent being
rounded upwards) where:
“Day Count Fraction” means in respect of any period the number of days in
the relevant period, from and including the date on which interest begins to
accrue up to but excluding the date on which it falls due, divided by the
number of days in the Regular Period in which the relevant period falls; and
“Regular Period” means each period from and including the issue date under
each issue of Notes or any interest payment date to (but excluding) the next
interest payment date.
Therefore, in accordance with the abovementioned, the interest of the Notes will be
specify in the Final Conditions. The interest payment dates of each issue of Notes,
which shall be monthly, quarterly, semiannually or annually, and if applicable, the
existence of any irregular periods will be set forth in the relevant Final Conditions.
If variable Interest Rate is specified in the relevant Final Conditions, the Interest Rate
shall be the sum of the EURIBOR plus the Margin specified in the Final Conditions.
In case the EURIBOR does not appear on the relevant page or if the relevant screen
page is unavailable, the Paying Agent will (i) request each of the Reference Banks to
provide a quotation of the EURIBOR on the Interest Determination Date to prime
banks in the Relevant Financial Centre interbank market in an amount that is
representative for a single transaction in that market at that time; and (ii) determine
the arithmetic mean of such quotations; and if fewer than two such quotations are
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provided as requested, the Paying Agent will determine the arithmetic mean of the
rates (being the nearest to the EURIBOR, as determined by the Calculation Agent)
quoted by major banks in the principal financial centre of the specified currency,
selected by the Paying Agent, at approximately 11.00 a.m. on the first day of the
relevant Interest Period for loans in euros to leading European banks for a period
equal to the relevant Interest Period and in an amount that is representative for a
single transaction in that market at that time.
"EURIBOR" means, in respect of any specified period, the interest rate benchmark
known as the Euro zone interbank offered rate which is calculated and published by
a designated distributor (as at the date of the Programme, Thomson Reuters) in
accordance with the requirements from time to time of the European Banking
Federation based on estimated interbank borrowing rates for a number of designated
currencies and maturities which are provided, in respect of each such currency, by a
panel of contributor banks (details of historic EURIBOR rates can be obtained from
the designated distributor).
"Margin" has the meaning given in the relevant Final Conditions.
"Interest Determination Date" has the meaning given in the relevant Final
Conditions.
"Reference Banks" has the meaning given in the relevant Final Conditions or, if
none, four major banks selected by the Paying Agent in the market that is most
closely connected with the EURIBOR.
11. Redemption and Purchase
(a) Final Redemption: Unless previously purchased and cancelled or redeemed
as herein provided, the Notes will be redeemed at their principal amount on
the relevant maturity date or on the date specifically determined in the Final
Conditions of the particular issue, which shall range between 4 and 7 years.
The Notes may not be redeemed at the option of the Issuer other than in
accordance with this Condition 11.
(b) Redemption for tax reasons: The Notes may be redeemed at the option of the
Issuer in whole, but not in part, at any time, on giving no less than 30 and no
more than 60 days' notice to the Noteholders (which notice shall be
irrevocable) at their principal amount, together with interest accrued to the
date fixed for redemption, if, immediately before giving such notice, the
Issuer satisfies the Commissioner that:
(i) the Issuer has or will become obliged to pay additional amounts as
provided or referred to in Condition 15 (Taxation) as a result of
any change in, or amendment to, the laws or regulations of the
Kingdom of Spain or any political subdivision or any authority
thereof or therein having power to tax, or any change in the
application or official interpretation of such laws or regulations
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(including a holding by a court of competent jurisdiction), which
change or amendment becomes effective on or after the Issue Date;
and
(ii) such obligation cannot be avoided by the Issuer taking reasonable
measures available to it;
provided, however, that no such notice of redemption shall be given earlier
than 90 days prior to the earliest date on which the Issuer would be obliged
to pay such additional amounts if a payment in respect of the Notes were then
due.
Prior to the publication of any notice of redemption pursuant to this
paragraph, the Issuer shall deliver to the Commissioner:
(A) a certificate signed by a representative of the Issuer stating that the
Issuer is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right
of the Issuer so to redeem have occurred; and
(B) an opinion in form and substance satisfactory to the Commissioner
of independent legal advisers of recognised standing to the effect
that the Issuer has or will become obliged to pay such additional
amounts as a result of such change or amendment.
The Commissioner shall be entitled to accept such certificate and opinion as
sufficient evidence of the satisfaction of the circumstances set out in (i) and
(ii) above, in which event they shall be conclusive and binding on the
Noteholders.
Upon the expiry of any such notice as is referred to in this Condition 11 (b),
the Issuer shall be bound to redeem the Notes in accordance with this
Condition 11 (b).
(c) No other redemption: The Issuer shall not be entitled to redeem the Notes
otherwise than as provided in paragraphs 11.(a) (Final redemption) and (b)
(Redemption for tax reasons) of this Condition 11, except in accordance with
Condition 11 (d) below.
(d) Purchase: Subject to compliance with applicable laws and regulations, each
of the Issuer or any of its Subsidiaries, may at any time purchase Notes in the
following conditions:
(a) through a tender offer directed to all Noteholders at any price, or
(b) on the open market at any price.
Such Notes may be held, re-sold, or, at the option of the relevant purchaser,
cancelled and while held by or on behalf of the Issuer as treasury shares or
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any such Subsidiary, shall not entitle the Holder to vote at any meetings of
the relevant Syndicate of Noteholders and shall not be deemed to be
outstanding for the purposes of calculating quorums at meetings of the
Syndicate of Noteholders or for the purposes of Condition 19 (Syndicate of
Noteholders).
(e) Cancellation: All Notes so redeemed shall be cancelled and may not be
reissued or resold. Notes purchased by the Issuer or any of its Subsidiaries
may, at the option of the relevant purchaser, be cancelled.
(f) Notice of Redemption: All Notes in respect of which any notice of redemption
is given under this Condition shall be redeemed on the date specified in such
notice in accordance with this Condition.
12. Payments
(a) Principal and Interest: Payments of principal and interest shall be made by
transfer to a euro account (or other account to which Euros may be credited
or transferred) of the relevant Noteholder maintained by or on behalf of it
with a bank that processes payments in a city in which banks have access to
the TARGET2 system, details of which appear in the records of Iberclear or,
as the case may be, the relevant Iberclear Member at the close of business on
the day immediately preceding the relevant interest payment date or the
maturity date, as applicable, on which the payment of interest or principal, as
the case may be, falls due. Noteholders must rely on the procedures of
Iberclear or, as the case may be, the relevant Iberclear Member to receive
payments in respect of the relevant Notes. Neither the Issuer nor the Paying
Agent will have any responsibility or liability for the records relating to
payments made in respect of the Notes.
(b) Payments subject to fiscal laws: All payments in respect of the Notes issued
under the Programme are subject in all cases to any applicable fiscal or other
laws, regulations and directives in the place of payment, but without prejudice
to the provisions of Condition 15 (Taxation). No commissions or expenses
shall be charged to the Noteholders in respect of such payments.
(c) Payments on business days: Where payment is to be made by transfer to a
euro account (or other account to which Euros may be credited or transferred),
payment instructions (for value on the due date, or, if the due date is not a
business day, for value on the next succeeding business day) will be initiated
on the due date for payment. A Holder of a Note shall not be entitled to any
interest or other payment in respect of any delay in payment resulting from
the due date for a payment not being a business day. In this paragraph
“business day” means a day (other than a Saturday or Sunday) which is a
TARGET Settlement Day.
(d) Interpretation: In these Conditions:
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“TARGET2” means the Trans-European Automated Real-Time Gross
Settlement Express Transfer payment system which utilises a single shared
platform and which was launched on 19 November 2007; and
“TARGET Settlement Day” means any day on which TARGET2 is open
for the settlement of payments in Euros.
13. Placement of each issue under the Programme
Regarding the Notes to be traded on the MARF (Mercado Alterantivo de Renta Fija)
under this Information Memorandum, the Issuer has appointed Banco de Sabadell,
S.A. and Bankinter, S.A. (acting through Bankinter Securities S.V., S.A.) as
Placement Entities. During the term of the Information Memorandum, the Issuer
can freely appoint other placement entities of the respective Notes (jointly with any
other placement entities the “Placement Entities”); all of which will be stated, as
the case may be, in the Final Conditions of each issue.
14. Further issues
The Issuer may from time to time, without the consent of the Noteholders, create
and issue further notes having the same terms and conditions as the Notes issued
under any previous Final Conditions in all respects (except for the first payment of
interest) and also the same Syndicate of Noteholders and Commissioner so as to be
consolidated, and form a single series, with the relevant issue of Notes (as detailed
in the Final Conditions).
15. Taxation
All payments of principal and interest in respect of the Notes or the Guarantees by
or on behalf of the Issuer or the Subsidiary Guarantors, as applicable, shall be made
free and clear of, and without withholding or deduction for or on account of, any
present or future taxes, duties, assessments or governmental charges of whatever
nature imposed, levied, collected, withheld or assessed by or on behalf of the
Kingdom of Spain or any political subdivision thereof or any authority therein or
thereof having power to tax, unless the withholding or deduction of such taxes,
duties, assessments or governmental charges is required by law (being a “Gross-
Up Event”).
If a Gross-Up Event occurs, the Issuer (or the Subsidiary Guarantors, as the case
may be) shall pay such additional amounts (“Additional Amounts”) as may be
necessary to ensure that the net amount received by each Noteholder after such
withholding or deduction (including any withholding or deduction in respect of any
Additional Amounts) shall not be less than the amount the Noteholder would have
received if such Taxes had not been withheld or deducted, except that no such
Additional Amounts shall be payable in respect of:
(a) any Note presented for payment by or on behalf of a Holder who is liable
for such taxes, duties, assessments or governmental charges in respect of
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such Note by reason of its having some connection with the Kingdom of
Spain other than the mere holding of the Note; or
(b) any Note presented for payment by or on behalf of a Holder who fails to
make any necessary claim or to comply with any certification,
identification or other requirements concerning the nationality, residence,
identity or connection with the taxing jurisdiction of such Holder, if such
claim or compliance is required by statute, treaty, regulation or
administrative practice of the taxing jurisdiction of the Issuer as a
condition to relief or exemption from such taxes; or
(c) any Note presented for payment by or on behalf of an individual resident
for tax purposes in the Kingdom of Spain if the Spanish tax authorities
determine that payments made to such individuals are not exempt from
Spanish withholding tax and require a withholding to be made; or
(d) any Note presented for payment by or on behalf of a Holder who is a
fiduciary, a partnership, a limited liability company or anything other than
the sole beneficial owner of that payment, to the extent to which that
payment would be required by the laws of Spain to be included in the
income, for tax purposes, of a beneficiary or settlor with respect to the
fiduciary, a member of that partnership, an interest holder in that limited
liability company or a beneficial owner who would not have been entitled
to any additional amounts had it been the holder; or
(e) any Note where such withholding or deduction is imposed on a payment
to an individual and is required to be made pursuant to European Council
Directive 2003/48/EC on the taxation of savings income or any law
implementing or complying with, or introduced in order to conform to, this
Directive; or
(f) any Note presented for payment by or on behalf of a Holder who would
have been able to avoid such withholding or deduction by presenting the
relevant Note to another paying agent in a member state of the European
Union; or
(g) any Note presented for payment more than 30 days after the Relevant Date
except to the extent that the Holder of such Note would have been entitled
to such additional amounts on presenting such Note for payment on the
last day of such period of 30 days; or
(h) any taxes that are imposed or withheld pursuant to Sections 1471 through
1474 of the Internal Revenue Code of 1986 (FATCA) (or any amended or
successive version of such sections that is substantively comparable and
not materially more onerous to comply with), any regulations promulgated
there under, any official interpretations thereof or any agreements entered
into in connection with the implementation thereof.
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In these Conditions, "Relevant Date" means whichever is the later of (1) the date
on which the payment in question first becomes due, or (2) if the full amount
payable has not been received in a city in which banks have access to the
TARGET2 by the Agent on or prior to such due date, the date on which (the full
amount having been so received) notice to that effect has been given to the
Noteholders.
Any reference in these Conditions to principal or interest shall be deemed to
include any additional amounts in respect of principal or interest (as the case may
be) which may be payable under this Condition 15 or any undertaking given in
addition to or in substitution of this Condition 15.
16. Events of Default
If any of the following events occur or is ongoing:
(a) Non-payment: the Issuer fails to pay any amount of principal in respect of the
Notes within fourteen days of the due date for payment thereof or fails to pay
any amount of interest in respect of the Notes within twenty one days of the
due date for payment thereof; or
(b) Accession of Additional Subsidiary Guarantors: If no Additional Subsidiary
Guarantors subscribe a Guarantee within a period of 90 days from the breach
of the relevant Minimum Collateralisation Ratio in accordance with
Condition 8.3.
(c) Breach of other obligations: the Issuer or either of the Subsidiary Guarantors
defaults in the performance or observance of any of its other obligations under
or in respect of the Notes or the Guarantee and such default remains
unremedied for 30 days after written notice thereof to the Issuer and the
Subsidiary Guarantors; or
(d) Cross-default of Issuer or Subsidiary Guarantors:
(i) any Indebtedness of the Issuer or any of the Subsidiary Guarantors is
not paid when due (vencida, líquida y exigible) or (as the case may be)
within any originally applicable grace period;
(ii) any such Indebtedness becomes due and payable (vencida, líquida y
exigible) prior to its stated maturity otherwise than at the option of the
Issuer or any of the Subsidiary Guarantors (as the case may be) or
(provided that no event of default, howsoever described, has occurred)
any Person entitled to such Indebtedness;
provided that the aggregate amount of the Indebtedness, guarantees or
indemnities in respect of which one or more of the events mentioned above
in this paragraph (d) have occurred, individually or in the aggregate equals or
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exceeds EUR 3,000,000 (or its equivalent in any other currency or currencies);
or
(e) Enforcement proceedings: a distress, attachment, execution, or other legal
process is levied, enforced or sued out, on or against all or a material part of
the property, assets or revenues of the Issuer or any of the Subsidiary
Guarantors and is not discharged or stayed within 90 days provided that
individually or in aggregate the amount of property, assets and/ or revenues
involved in any such distress, attachment, execution or legal process equals
or exceeds EUR 3,000,000; or
(f) Security enforced: a secured party takes possession, or a receiver, manager or
other similar officer is appointed to the whole or a substantial part of the
undertaking, assets and revenues of the Issuer or any of the Subsidiary
Guarantors in respect of an obligation the principal amount of which equals
or exceeds EUR 3,000,000; or
(g) Winding up, etc.: an order is made or an effective resolution is passed for the
winding up, liquidation or dissolution of the Issuer or any of the Subsidiary
Guarantors (otherwise than for the purposes of or pursuant to an
amalgamation, reorganization or restructuring whilst solvent, or as provided
in Condition 9.8 (Limitation on Structural Modification)); or
(h) Failure to take action, etc.: any action, condition or thing at any time required
to be taken, fulfilled or done in order to (i) enable the Issuer and the
Subsidiary Guarantors lawfully to enter into, exercise their respective rights
and perform and comply with their respective obligations under and in respect
of the Notes (ii) ensure that those obligations are legal, valid, binding and
enforceable and (iii) make the Notes admissible as evidence in the courts of
the Kingdom of Spain; or
(i) Unlawfulness: it is or will become unlawful for the Issuer or any of the
Subsidiary Guarantors to perform or comply with any of their obligations
under or in respect of the Notes or the Guarantee; or
(j) Guarantee not in force: the Guarantee of the Notes is not (or is claimed by
any of the Subsidiary Guarantors not to be) in full force and effect prior to the
disbursement date of the first issuance of Notes in the terms set forth in
Condition 8 (Guarantees and Security); or
(k) To be delisted: if the Notes cease to be listed on any multilateral trading
facility of the European Union,
then any Noteholder may, by notice in writing given to the Issuer by (i) the
Commissioner acting upon a resolution of the Syndicate of Noteholders, in respect
of all Notes, or (ii) unless there has been a resolution to the contrary by the
Syndicate of Noteholders, any Noteholder in respect of such Note, declared the
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Notes immediately due and payable whereupon it shall become immediately due
and payable at its principal amount, together with accrued interest, without further
formality.
17. Prescription
Claims for principal and interest shall become void unless made within a period of
5 years (in the case of principal and interest) after the date on which the payment in
question first becomes due.
18. Paying Agent
The financial service of the debt in relation to each issue of Notes will be carried
out by Banco de Sabadell, S.A. (the “Paying Agent”). In acting under the relevant
agency agreement and in connection with the Notes, the Paying Agent acts solely
as agent of the Issuer, and does not assume any obligations or relationship of agency
or trust for or with any of the Noteholders.
The Issuer reserves the right at any time to vary or terminate the appointment of
any Paying Agent and to appoint a successor agent and additional or successor
agents provided, however, that the Issuer shall at all times maintain (a) an agent,
and (b) so long as the Notes are listed on a multilateral trading facility, secondary
market, there will at all times be an Paying Agent with a specified office in such
place as may be required by the rules and regulations of the relevant multilateral
trading facility or secondary market.
Notice of any change in the Paying Agent or in its specified offices shall promptly
be given to the Noteholders.
19. Syndicate of Noteholders, Modification and Waiver
Each issuance of Notes shall foresee the incorporation of a Syndicate of
Noteholders in accordance with the following terms:
(a) Syndicate of Noteholders: Noteholders shall meet in accordance with certain
regulations governing the Syndicate of Noteholders (the “Regulations”). The
Regulations contain the rules governing the Syndicate of Noteholders and the
rules governing its relationship with the Issuer.
Noteholders shall, by virtue of purchasing and/or holding Notes, be deemed
to have agreed to: (i) the appointment of the relevant Commissioner; and (ii)
become a member of the Syndicate of Noteholders.
The Commissioner appointed by the Syndicate of Noteholders of the first
issue will also act as Commissioner for any other future issues under the
Programme.
The Issuer may, with the consent of the Commissioner, but without the
consent of the Noteholders, amend these Conditions to correct a manifest or
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proven error or to make amendments of a formal, minor or technical nature
or to comply with mandatory provisions of law.
In addition to the above, the Issuer and the Noteholders, the latter by means
of a resolution of the Syndicate of Noteholders, may agree to any
modification, whether material or not, of these Conditions and any waiver of
any breach or proposed breach of these Conditions.
For the purposes of these Conditions:
“Commissioner” means the comisario as this term is defined under
the Spanish Corporations Law (Ley de Sociedades de Capital) of the
Syndicate of Noteholders; and
“Syndicate of Noteholders” means the sindicato as this term is
described under the Spanish Corporations law (Ley de Sociedades de
Capital).
In accordance with article 425 of the Spanish Corporations law (Ley de
Sociedades de Capital), a general meeting of the Syndicate of Noteholders
shall be quorate upon first being convened provided that Noteholders holding
or representing two-thirds of the Notes outstanding attend. If the necessary
quorum is not achieved at the first meeting, a second general meeting may be
convened to meet one month after the first general meeting and shall be
quorate regardless of the number of Noteholders in attendance. A resolution
shall be passed by Holders holding an absolute majority of the Notes present
or duly represented at any properly constituted meeting.
(b) Notification to the Noteholders: Any modification, waiver or authorisation in
accordance with this Condition 19 shall be binding for the Noteholders and
shall be communicated by the Issuer to the Noteholders as soon as practicable
thereafter in accordance with Condition 21 (Notices).
(c) The template text of the Regulations of each Syndicate of Noteholders to be
incorporated under each relevant issue of Notes is as follows:
REGLAMENTO REGULATIONS
A continuación se recoge el Reglamento
del Sindicato de Bonistas de la Emisión
de bonos de Teknia, denominada “[]”
(la “Emisión”).
The Regulations that follow correspond
to the Syndicate of Noteholders of the
Notes which compose the “[]” (the
“Issue”).
En caso de discrepancia la versión
española prevalecerá.
In the case of discrepancy, the Spanish
version shall prevail.
TÍTULO I TITLE I
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CONSTITUCIÓN, DENOMINACIÓN,
OBJETO, DOMICILIO Y DURACIÓN
DEL SINDICATO DE BONISTAS.
INCORPORATION, NAME,
PURPOSE, ADDRESS AND
DURATION OF THE SYNDICATE OF
NOTEHOLDERS.
ARTÍCULO 1°. – CONSTITUCIÓN ARTICLE 1º. – INCORPORATION
Con sujeción a lo dispuesto en el
Capítulo IV del Real Decreto Legislativo
1/2010, de 2 de julio, por el que se
aprueba el texto refundido de la Ley de
Sociedades de Capital (la “Ley de
Sociedades de Capital”), una vez se
suscriban y desembolsen los Bonos,
quedará constituido un sindicato de los
titulares de los Bonos (los “Bonistas”)
que integran la “[]”.
In accordance with the provisions of
Chapter IV of the Spanish Royal
Legislative Decree 1/2010, of 2 July
2010, approving the Spanish Capital
Companies Act (“Real Decreto
Legislativo 1/2010, de 2 de julio, que
aprueba el texto refundido de la Ley de
Sociedades de Capital”) (the “Spanish
Capital Companies Act”), once the
Notes have been fully subscribed and
paid-up, a Syndicate of the owners of
the Notes (hereinafter, the
“Noteholders”) shall be constituted to
include the “ISSUE OF NOTES OF []”
.
Este Sindicato se regirá por el presente
Reglamento, por la Ley de Sociedades
de Capital, por las disposiciones de los
estatutos sociales de Teknia
Manufacturing Group, S.L.U. (el
“Emisor”) y demás disposiciones
legales vigentes que le sean aplicables.
This Syndicate shall be governed by
these Regulations, by the Spanish
Capital Companies Act, by the
applicable provisions of the articles of
association of Teknia Manufacturing
Group S.L. (the “Issuer”), and other
applicable legislation that may result
applicable.
ARTÍCULO 2°. – DENOMINACIÓN ARTICLE 2º. – NAME
El Sindicato se denominará
“SINDICATO DE BONISTAS DE LA
EMISIÓN DE BONOS SIMPLES DE []”
.
The Syndicate shall be named
“SYNDICATE OF NOTEHOLDERS
OF THE ISSUE OF NOTES OF []” .
ARTÍCULO 3°. – OBJETO ARTICLE 3º. – PURPOSE
El Sindicato tendrá por objeto la
representación y defensa de los legítimos
This Syndicate is formed for the purpose of
representing and protecting the lawful
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intereses de los Bonistas frente a Teknia
Manufactoring Group, S.L.U., mediante el
ejercicio de los derechos que le reconocen
las leyes por las que se rigen y el presente
Reglamento, para ejercerlos y conservarlos
de forma colectiva, y bajo la representación
que se determina en las presentes normas.
interests of the Noteholders before Teknia
Manufacturing Group, S.L.U., by means of
exercising the rights granted by the
applicable laws and the present
Regulations, to exercise and preserve them
in a collective way and under the
representation determined by these
Regulations.
ARTÍCULO 4°. – DOMICILIO ARTICLE 4. – ADDRESS
El domicilio del Sindicato se fija en []. The address of the Noteholders
Syndicate shall be located at [].
La Asamblea General de Bonistas
podrá, sin embargo, reunirse, cuando se
considere oportuno, en otro lugar de la
ciudad de Madrid, expresándose así en
la convocatoria.
However, the Noteholders General
Meeting is also authorised to convene,
when considered appropriate, in any
other place in Madrid that is specified
in the meeting announcement.
ARTÍCULO 5°. – DURACIÓN ARTICLE 5º. – DURATION
El Sindicato estará en vigor hasta que
los Bonistas se hayan reintegrado de
cuantos derechos derivados de los
Bonos por principal, intereses o
cualquier otro concepto les
correspondan, o se hubiese procedido a
la amortización de la totalidad de los
Bonos de acuerdo con sus términos y
condiciones.
This Syndicate shall be in force until
the Noteholders have been reimbursed
for any rights deriving from the Notes
they may hold for the principal, interest
or any other concept, or until the
amortization of all the Notes takes
place according to the applicable terms
and conditions.
TÍTULO II TITLE II
RÉGIMEN DEL SINDICATO SYNDICATE’S REGIME
ARTÍCULO 6°. – ÓRGANOS DEL
SINDICATO
ARTICLE 6º. – SYNDICATE
MANAGEMENT BODIES
El gobierno del Sindicato
corresponderá:
(a) A la Asamblea General de Bonistas
(la “Asamblea General”).
The Management bodies of the
Syndicate are:
(a) The General Meeting of
Noteholders (the “General
Meeting”).
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(b) Al Comisario de la Asamblea
General de Bonistas (el
“Comisario”).
(b) The Commissioner of the General
Meeting of Noteholders (the
“Commissioner”).
ARTÍCULO 7°. – NATURALEZA
JURÍDICA
ARTICLE 7º. – LEGAL NATURE
La Asamblea General, debidamente
convocada y constituida, es el órgano de
expresión de la voluntad de los Bonistas,
con sujeción al presente Reglamento, y
sus acuerdos vinculan a todos los
Bonistas en la forma establecida por las
Leyes.
The General Meeting, duly called and
constituted, is the body that expresses
the will of the Noteholders, subject to
the provisions of these Regulations,
and its resolutions are binding for all
Noteholders as established by Law.
ARTÍCULO 8°. – LEGITIMACIÓN
PARA CONVOCATORIA
ARTICLE 8º. – CONVENING
MEETINGS
La Asamblea General será convocada
por el Administrador o Administradores
del Emisor o por el Comisario, siempre
que cualquiera de ellos lo estime
conveniente.
The General Meeting shall be
convened by the Sole Director or
Directors of the Issuer or by the
Commissioner, whenever they may
deem it convenient.
Sin perjuicio de lo anterior, el Comisario
deberá convocarla cuando lo soliciten
por escrito de forma fehaciente, y
expresando el objeto de la convocatoria
y los puntos del orden del día, los
Bonistas que representen, por lo menos,
(i) la vigésima parte del importe total de
la Emisión que no esté amortizada o (ii)
el mínimo que legalmente se establezca.
En este caso, la Asamblea General
deberá convocarse para ser celebrada
dentro de los cuarenta y cinco (45) días
siguientes a aquél en que el Comisario
hubiere recibido la solicitud válida al
efecto.
Notwithstanding the above, the
Commissioner shall convene a General
Meeting when Noteholders holding at
least (i) one-twentieth of the entire non-
amortised amount of the Issue, or (ii)
the minimum established by law. In
such case, the General Meeting shall
be held within forty five (45) days
following the receipt by the
Commissioner of a valid written notice
for this purpose.
ARTÍCULO 9°. – FORMA DE
CONVOCATORIA
ARTICLE 9º. – PROCEDURE FOR
CONVENING MEETINGS
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La convocatoria de la Asamblea
General se hará, por lo menos (i) quince
(15) días antes de la fecha fijada para su
celebración, o (ii) con el plazo mínimo
que legalmente se establezca mediante
(a) anuncio en la página web del Emisor
y hecho relevante en MARF, o (b)
anuncio que se publicará en el “Boletín
Oficial del Registro Mercantil” y, si se
estima conveniente, en uno o más
periódicos de mayor difusión nacional o
internacional o (c) notificación a los
Bonistas de conformidad con los
términos y condiciones de los Bonos.
The General Meeting shall be
announced at least (i) fifteen (15) days
before the date set for the meeting, or
(ii) within the term established by law
by (a) notice published in the webpage
of the Issuer and relevant fact in MARF,
or (b) notice published in the Official
Gazette of the Mercantile Registry and,
if appropriate, in one or more
newspapers of significant national or
international circulation, or (c) notice
to the Noteholders in accordance with
the terms and conditions of the Notes.
El plazo se computará a partir de la
fecha de la publicación del anuncio o de
la fecha en que hubiere sido remitido el
anuncio al último obligacionista, según
cual fuere la forma de la convocatoria.
No se computarán en el plazo ni el día
de la publicación del anuncio o de
remisión de la convocatoria ni el de la
celebración de la asamblea de
obligacionistas.
En todo caso, se expresará en el anuncio
el nombre de la sociedad y la
denominación del Sindicato, el lugar y
la fecha de reunión, tanto en primera
como en segunda convocatoria
debiendo mediar entre ambas, al menos,
24 horas, los asuntos que hayan de
tratarse y la forma de acreditar la
titularidad de los Bonos para tener
derecho de asistencia a la Asamblea
General.
The term shall count from the date on
which the notice is published or from
the date on which the notice is
communicated to the last Noteholder,
as applicable. The term shall not
include the day on which the notice is
published or communicated, nor the
day on which the General Meeting
takes place.
In any case, the notice shall contain the
name of the company and the
Syndicate, the place and date of the
meeting, at both first and second calls,
with at least a 24-hour period between
one call and the other, the matters to be
discussed and the way in which the
ownership of the Notes shall be
credited in order to have the right to
attend the General Meeting.
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No obstante, la Asamblea General se
entenderá convocada y válidamente
constituida para tratar de cualquier
asunto de la competencia del Sindicato,
siempre que estén presente debidamente
representados los Bonistas titulares de
todos los Bonos en circulación y los
asistentes acepten por unanimidad la
celebración de la Asamblea y el orden
del día.
However, the General Meeting shall be
deemed validly constituted to transact
any business within the remit of the
Syndicate if Noteholders representing
all of the outstanding Notes are present
or duly represented, and provided that
they unanimously approve the holding
of such meeting and the agenda.
ARTÍCULO 10°. – DERECHO DE
ASISTENCIA
ARTICLE 10º. – RIGHT TO
ATTEND MEETINGS
Tendrán derecho de asistencia a la
Asamblea General los Bonistas que lo
sean, con cinco (5) días de antelación,
por lo menos, a aquél en que haya de
celebrarse la reunión.
Noteholders who have been so at least
five (5) days prior to the date on which
the meeting is scheduled, shall have the
right to attend the meeting.
El Administrador o Administradores del
Emisor, el Comisario y el Agente de
Pagos (Paying Agent) de la Emisión
tendrán derecho de asistencia a la
Asamblea General aunque no hubieren
sido convocados.
The Sole Director or the Directors of
the Issuer, the Commissioner, and the
Paying Agent under the Issue shall
have the right to attend the meeting
even if they have not been requested to
attend.
ARTÍCULO 11°. – DERECHO DE
REPRESENTACIÓN
ARTICLE 11º. – RIGHT TO BE
REPRESENTED
Todo Bonista que tenga derecho de
asistencia a la Asamblea General podrá
hacerse representar por medio otro
obligacionista. Además, todo Bonista
con derecho a asistencia podrá, en su
caso de no poder delegar su
representación en otro bonista, hacerse
representar por el Comisario, aunque en
ningún caso podrá hacerse representar
por los administradores de la Sociedad,
aunque sean obligacionistas. La
All Noteholders having the right to
attend the meetings also have the right
to be represented by another
Noteholder. Furthermore, every
Noteholder may, in case it cannot
delegate its representation in another
noteholder, be represented by the
Commissioner, but under no
circumstances shall be represented by
the directors of the company, even if
they are Noteholders. Appointment of a
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representación deberá conferirse por
escrito y con carácter especial para
cada Asamblea General.
proxy must be issued in writing for each
individual meeting.
ARTÍCULO 12°. –ADOPCIÓN DE
ACUERDOS
ARTICLE 12º. – APPROVAL OF
RESOLUTIONS
La Asamblea General adoptará los
acuerdos por mayoría absoluta de los
votos emitidos.
Por excepción, las modificaciones del
plazo o de las condiciones del reembolso
del valor nominal de los Bonos
requerirán el voto favorable de las dos
terceras partes de las Bonos en
circulación. Si no se lograse esa
mayoría, podrá ser nuevamente
convocada la Asamblea General, de
acuerdo con lo establecido en la Ley de
Sociedades de Capital.
The General Meeting shall approve the
resolutions by an absolute majority of
the votes issued.
As an exception, the amendment of the
term or the reimbursement of the
nominal value of the Notes shall be
approved by two-thirds of the
outstanding Notes. If such majority is
not obtained, an additional General
Meeting can be conveyed in
accordance with the terms of the
Spanish Capital Companies Act.
ARTÍCULO 13°. – DERECHO DE
VOTO
En las reuniones de la Asamblea
General se conferirá derecho a un voto
por cada importe nominal de Bonos
igual a 100.000 euros, o el valor
nominal no amortizado presente o
representado. En todo caso, si así se
previera en la correspondiente
convocatoria de la Asamblea de
Bonistas, el voto podrá ejercitarse a
través de medios de comunicación a
distancia, incluyendo la
correspondencia postal o por medios
telemáticos siempre que (a) se garantice
debidamente la identidad del Bonista
que ejerce el derecho de voto y (b) éste
quede registrado en algún tipo de
soporte.
ARTICLE 13º. – VOTING RIGHTS
At General Meetings, one vote shall be
conferred to each nominal amount of
Notes equivalent to EUR 100,000, or to
the outstanding nominal value present
or represented. In any case, if indicated
in the announcement of the General
Meeting of Noteholders, the vote may
be conducted by means of remote
communication, including ordinary
post or telematic means, as long as (a)
the identity of the Noteholder
exercising this voting right is duly
verified, and (b) it is recorded by some
means of support.
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ARTÍCULO 14º. - PRESIDENCIA DE
LA ASAMBLEA GENERAL
ARTICLE 14º. - CHAIRMAN OF
THE GENERAL MEETING
La Asamblea General estará presidida
por el Comisario, o la persona que éste
designe legalmente quien dirigirá los
debates, dará por terminadas las
discusiones cuando lo estime
conveniente y dispondrá que los asuntos
sean sometidos a votación. No obstante,
si el Comisario, por causas ajenas a su
voluntad, no pudiera asistir a la
Asamblea General, ésta podrá designar
a la persona encargada de la
presidencia. Asimismo, los asistentes
podrán designar, en su caso, a una
persona que actuará como secretario de
la Asamblea.
The Commissioner, or the person
legally appointed by it, shall serve as
chairman of the General Meeting and
shall chair the discussions. He/she
shall have the right to bring the
discussions to an end when considered
appropriate and shall arrange for
matters to be put to the vote.
Notwithstanding, if the Commissioner,
for reasons not attributable to it, is not
able to attend the General Meeting, the
General Meeting may designate the
person that should act as chairman
Furthermore, given the case, the
attendants shall appoint a person to act
as secretary of the General Meeting.
ARTÍCULO 15°. – LISTA DE
ASISTENCIA
ARTICLE 15º. – ATTENDANCE
LIST
El Comisario formará, antes de entrar a
discutir el orden del día, la lista de los
asistentes, expresando el carácter y
representación de cada uno y el saldo
vivo de los Bonos propios o ajenos con
que concurren.
Before addressing the agenda items,
the Commissioner shall prepare the
attendance list, stating the nature and
representation of each of the
Noteholders present and the
outstanding amount under the Notes
both directly owned and/or represented
at the meeting.
ARTÍCULO 16°. – FACULTADES DE
LA ASAMBLEA GENERAL
ARTICLE 16º. – POWER OF THE
GENERAL MEETING
La Asamblea General podrá acordar lo
necesario para la mejor defensa de los
legítimos intereses de los mismos frente
al Emisor; modificar, de acuerdo con el
Emisor, los términos y condiciones de
los Bonos, pudiendo ser dichas
The General Meeting may pass
resolutions necessary to i) defend the
lawful interests of Noteholders before
the Issuer; ii) modify, in accordance
with the Issuer, the terms and
conditions of the Notes, being those
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modificaciones esenciales o no
esenciales; destituir o nombrar
Comisario; ejercer, cuando proceda, las
acciones judiciales correspondientes y
aprobar los gastos ocasionados por la
defensa de los intereses de los Bonistas.
Asimismo, la Asamblea General,
actuando a través del Comisario,
quedará facultada para iniciar la
ejecución de las garantías que se
otorguen a favor de los Bonos (las
“Garantías”), de acuerdo con los
términos y condiciones de los Bonos y de
dichas Garantías.
modifications essential or non-
essential; iii) dismiss or appoint the
Commissioner; iv) exercise, when
appropriate, the corresponding legal
claims and to approve the expenses
incurred in the defence of the
Noteholders’ interests. Additionally,
the General Meeting, represented by
the Commissioner, shall initiate the
enforcement of the guarantees granted
in favour of the Notes (the
“Guarantees”), in accordance with the
terms and conditions of the Notes and
of such Guarantees.
ARTÍCULO 17°. – IMPUGNACIÓN
DE LOS ACUERDOS
ARTICLE 17º. – CHALLENGE OF
RESOLUTIONS
Los acuerdos de la Asamblea General
podrán ser impugnados por los Bonistas
conforme a lo dispuesto en la Ley de
Sociedades de Capital para la
impugnación de acuerdos sociales.
The resolutions of the General Meeting
may be challenged by the Noteholders
in accordance with provisions of the
Spanish Capital Companies Act
regarding the challenge of corporate
resolutions.
ARTÍCULO 18°. – ACTAS ARTICLE 18º. – MINUTES
El acta de la sesión podrá ser aprobada
por la propia Asamblea General, acto
seguido de haberse celebrado ésta, o, en
su defecto, y dentro del plazo de quince
(15) días, por el Comisario y al menos
un Bonista designado al efecto por la
Asamblea General.
The minutes of the meeting shall be
approved by the General Meeting, after
the meeting has been held or,
alternatively, within a period of fifteen
(15) days by the Commissioner and at
least one Noteholder appointed for
such purpose by the General Meeting.
ARTÍCULO 19°.–
CERTIFICACIONES
ARTICLE 19º. – CERTIFICATES
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Las certificaciones de las actas de los
acuerdos de la Asamblea General serán
expedidas por el Comisario.
The certificates of the minutes of the
resolutions of the General Meeting
shall be issued by the Commissioner.
ARTÍCULO 20°. – EJERCICIO
INDIVIDUAL DE ACCIONES
ARTICLE 20º. – INDIVIDUAL
EXERCISE OF CLAIMS
Los Bonistas sólo podrán ejercitar
individualmente las acciones judiciales
o extrajudiciales que corresponda
cuando no contradigan los acuerdos
adoptados previamente por el Sindicato,
dentro de su competencia, y sean
compatibles con las facultades que al
mismo se hubiesen conferido.
De acuerdo con lo anterior y de la
misma forma, los Bonistas sólo podrán
ejercitar acciones individuales de
ejecución de las Garantías, cuando no
contradigan los acuerdos adoptados
previamente por el Sindicato, dentro de
su competencia, y de acuerdo con el
artículo 429 de la Ley de Sociedades de
Capital, y sean compatibles con los
términos y condiciones de la
correspondiente Garantía.
The Noteholders will only be entitled to
individually exercise judicial or extra
judicial claims if such claims do not
contradict the resolutions previously
adopted by the Syndicate, within its
powers, and if compatible with the
faculties conferred upon the Syndicate.
In accordance with the above, the
Noteholders shall only exercise
individual claims for the enforcement
of the Guarantees when such claims do
not contravene the resolutions
previously passed by the Syndicate,
within its competence, and according
to article 429of the Spanish Capital
Companies Act, and as long as they are
compatible with the terms and
conditions of the corresponding
Guarantee.
TITULO III TITLE III
DEL COMISARIO THE COMMISSIONER
ARTÍCULO 21°. – NATURALEZA
JURÍDICA DEL COMISARIO
ARTICLE 21º. – NATURE OF THE
COMMISSIONER
Incumbe al Comisario ostentar la
representación legal del Sindicato y
actuar de órgano de relación entre éste
y el Emisor, de acuerdo con lo
establecido en la ley.
The Commissioner shall bear the legal
representation of the Syndicate and
shall serve as provided on the Law as
the liaison between the Syndicate and
the Issuer.
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ARTÍCULO 22°. – NOMBRAMIENTO
Y DURACIÓN DEL CARGO
ARTICLE 22º. – APPOINTMENT
AND DURATION OF THE OFFICE
El Emisor designa a Bondholders, S.L.
como Comisario, sin perjuicio de que la
Asamblea General pueda destituir al
Comisario designado y nombrar a otra
persona si lo considera oportuno. La
retribución del Comisario será fijada
por el Emisor.
Notwithstanding the appointment of
Bondholders, S.L. as Commissioner by
the Issuer, the General Meeting shall
remove the appointed Commissioner
and appoint other person if it deems
necessary. The remuneration of the
Commissioner shall be established by
the Issuer.
ARTÍCULO 23°. – FACULTADES ARTICLE 23º. – POWERS
Serán facultades del Comisario: The Commissioner shall have the
following powers:
1º Tutelar los intereses comunes de los
Bonistas.
1º To protect the common interest of the
Noteholders.
2° Convocar y presidir, en su caso, las
Asambleas Generales.
2º. To convene and act as chairman of
the General Meeting, if applicable.
3° Informar a la Sociedad Emisora de
los acuerdos del Sindicato.
3º. To inform the Issuer of the
resolutions passed by the Syndicate.
4° Vigilar el pago de los intereses y del
principal.
4º. To control the payment of the
principal and the interest.
5° Llevar a cabo todas las actuaciones
que estén previstas realice o pueda
llevar a cabo el Comisario de acuerdo
con los términos y condiciones de los
Bonos.
5º. To carry out all those actions
provided for under the terms and
conditions of the Notes or which may
be carried out by the Commissioner.
6° Ejecutar los acuerdos de la Asamblea
General.
6º. To implement the resolutions of the
General Meeting.
7° Ejercitar las acciones que
correspondan contra el Emisor, los
administradores o liquidadores y contra
los Garantes de la Emisión.
7º. To exercise claims against the
Issuer, the directors or liquidators, and
the Subsidiary Guarantors of the Issue.
8° Aceptar, en nombre y representación
de los Bonistas, cualesquiera garantías,
8º. To accept, on behalf of the
Noteholders, any guarantees, including
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incluyendo garantías reales, otorgadas
a favor de los mismos y firmar
cualesquiera otros documentos públicos
o privados relacionados con dichas
garantías quesea necesarios para su
buen fin.
9º En general, las que le confiere la Ley
y el presente Reglamento.
any security, granted in their favour
and sign any other documents, public
or private, related to such guarantees
that may be necessary.
9.º In general, the powers granted to
the position by Law and the present
Regulations.
20. Notices
(a) Notice to Noteholders: So long as the Notes are admitted (incorporadas) on
the MARF, notices to the Noteholders will be published in the Boletín de
Cotización de MARF (the Official Bulletin of MARF). Any such notice will
be deemed to have been given on the date of the first publication. In addition,
so long as the Notes are represented by book-entries in Iberclear, all notices
to Noteholders shall be made through Iberclear for transmission to their
respective accountholders.
(b) Notice of a General Meeting of the Syndicate of Noteholders: Notice of a
general meeting of the Syndicate of Noteholders must be given in accordance
with the Regulations.
(c) Notice to Commissioner: Copies of any notice given to any Noteholders will
be also given to the Commissioner of the Syndicate of Noteholders.
21. Governing Law and Jurisdiction
(a) Governing law: The Notes, the Guarantees and any non-contractual
obligations arising from or in connection with the Notes and the Guarantees
are governed by Spanish law.
(b) Spanish courts: The courts and tribunals of the city of Madrid have exclusive
jurisdiction to settle any disputes (a “Dispute”) arising from or in connection
with the Notes (including a dispute regarding any non-contractual obligation
arising from or in connection with the Notes).
(c) Appropriate forum: The Issuer agrees that the courts of the city of Madrid are
the most appropriate and convenient courts to settle any Dispute and,
accordingly, that it will not argue to the contrary.
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IX. ADMISSION OF THE SECURITIES
1. Request for admission of the securities to the Alternative Fixed Income Market.
Deadline for admission to trading
Admission (incorporación) will be requested for the securities to be issued under
the Programme described in this Information Memorandum on the Multilateral
Trading System known as the Alternative Fixed Income Market (Mercado
Alternativo de Renta Fija or “MARF”). Said listing will take place within thirty
(30) days of the Closing Date and always during the validity period of the
Programme.
The MARF adopts the legal structure of a multilateral trading facility (MTF), under
the terms provided for in Articles 317 et seq. of the Securities Market Law,
constituting an alternative, unofficial, market for the trading of fixed-income
securities.
The Teknia Group has requested admission (incorporación) of this Programme to
the MARF for the following reasons: i) to diversify sources of external financing
through access to capital markets, ii) to raise funds to strengthen the financial ability
to obtain financing at longer maturities, iii) to benefit from the flexibility of
requirements concerning official markets with lower costs, and (iv) to provide the
Issue with liquidity through a multilateral trading system.
This Information Memorandum includes the information required in MARF
Circular 1/2015 of 30 September on the admission and exclusion of securities on
the Alternative Fixed Income Market and the procedures for the admission and
exclusion of securities on the MARF under its regulations and other regulations.
Neither the MARF Governing Body, the National Securities Market Commission
(CNMV), nor the Placement Entities have approved, verified, or tested the contents
of the Information Memorandum, the financial statements of the Issuer, the rating
report, or the risk of the issuance required under Circular 1/2015. The intervention
of the MARF Governing Body does not signify a statement, acknowledgement or
confirmation about the completeness, understanding and consistency of the
information included in the documentation contributed by the Issuer.
It is recommended that the investor fully and carefully read the Information
Memorandum presented prior to making any investment decision.
The Issuer expressly states that it knows and is aware of the requirements and
conditions necessary for the admission and exclusion of securities on the MARF
under current legislation, and the requirements of its governing bodies, and it
expressly agrees to comply therewith.
The Issuer expressly states that it has met the requirements for the registration and
settlement of transactions in Iberclear. Operation settlements will be made through
Iberclear.
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2. Cost of all legal, financial, and audit services and other costs to the Issuer
regarding the registration of the Programme
Registration of the Programme on the MARF costs amount to an approximate total
of EUR 55.000.
X. THIRD PARTY INFORMATION, STATEMENT BY EXPERTS AND
DECLARATIONS OF INTEREST
No statement or report attributed to a person as an expert is included in the
Information Memorandum. No statement or report attributed to a third party is
included in the Information Memorandum.
XI. REFERENCES
The Teknia Group declares that the following documents (or copies thereof) can be
inspected, if necessary, during the valid period of the Information Memorandum:
(a) The Bylaws of the Issuer are available at the Mercantile Registry of Bizkaia,
Basque Country (Spain).
(b) All reports, letters, and other documents, historical financial information,
valuations and statements prepared by any expert at the Issuer's request,
which are included or referred to in the Information Memorandum.
(c) The historical financial information of the Issuer for each of the two financial
years preceding the publication of the Information Memorandum are
available at the Mercantile Registry of Bizkaia, Basque Country (Spain).
As the person responsible for the Information Memorandum
__________________________________________
Signed: Mr. Javier Lázpita Sarriugarte
as representative of Teknia Manufacturing Group, S.L.U.
ANNEX 3
2016 INDIVIDUAL AUDITED ANNUAL ACCOUNTS OF TEKNIA ELORRIO,
S.L.U., TEKNIA PEDROLA, S.L.U., TEKNIA BARCELONA, S.L.U., TEKNIA
BILBAO XXI, S.L.U., TEKNIA MARTOS, S.L.U., TEKNIA AZUQUECA, S.L.U.,
TEKNIA MANRESA, S.L.U., TEKNIA EPILA, S.L.U., TEKNIA BRASIL LTDA.,
TEKNIA RZESZÓW S.A., TEKNIA KÁLISZ, S.P. Z O.O., TEKNIA
NASHVILLE, LLC, AND TEKNIA UHERSKÝ BROD, A.S., AND 2016
INDIVIDUAL NON-AUDITED ANNUAL ACCOUNTS OF TEKNIA
MONTMELO, S.L.U. AND TEKNIA R&D, S.L.
ANNEX 4
FINAL CONDITIONS
[DENOMINATION OF THE ISSUE]
[TOTAL VOLUME OF THE ISSUE]
Issued under the Information Memorandum (“Documento Base Informativo de
Incorporación”) registered with MARF on [●].
These Final Conditions (the “Final Conditions”) are complemented with the Documento
Base Informativo de Incorporación registered with the Alternative Fixed-Income Market
(“MARF”) on [●] and available on the webpage of MARF
(http://www.bmerf.es/esp/aspx/Portadas/HomeMARF.aspx), and should be read in any
case jointly with such document. In case of discrepancy between the Documento Base
Informativo de Incorporación and the Final Conditions, the latter will prevail.
These Final Conditions include the information required by Annex 1-C of Circular 1/2015
of MARF.
The securities described in these Final Conditions are issued by Teknia Manufacturing
Group, S.L.U., with registered office at Barrio San Agustín, s/n, Elorrio (Vizcaya) (the
“Issuer”).
The Notes issued under these Final Conditions are within the maximum nominal amount
of the Programme (EUR XXXXXX).
Mr. [●], in the name and on behalf of the Issuer, acting as [●], is responsible for the entire
contents of this Final Conditions.
1. DESCRIPTION, CLASS AND CHARACTERISTICS OF THE NOTES
ISSUED
A. MAIN CHARACTERISTICS
1. Nature and denomination of the Notes:
• Denomination of the issue: [●]
• ISIN code: [●]
• [If the issue is fungible with another previous issue, state so here]
2. Currency of the issue: Euro (€)
3. Nominal and effective amount of the issue:
• Number of Notes: [●]
• Nominal Amount: [●]
• Effective Amount: [●]
4. Nominal and effective amount of the Notes:
• Unitary nominal amount: 100,000
• Effective amount: [●]
• Issue Price: [●]%
• Number of Notes:
5. Issue Date: [●]
6. Disbursement Date: [●]
7. Interest rate: [Fixed / Variable]
8. Term
9. Maturity Date: [●]
10. Options of early amortization:
• For the Issuer: [yes / no]
• For the investor: [yes / no]
11. Admission to listing of the securities: [MARF / other markets to be stated here]
12. Representation of the securities: [account entries managed by Sociedad de Gestión
de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U.
(IBERCLEAR), located at Plaza de la Lealtad nº 1, Madrid/ Others]
B. INTEREST RATE AND AMORTIZATION
13. Fixed / Variable interest rate: [●]% / EURIBOR + [●]%
• Date of commencement of accrual of interest: [●]
• Interest payment dates: [●]
• Irregular period / amount: [●]
• Base Calculation: [●]
• Day Count Fraction: [Actual/Actual ICMA basis unadjusted standard /
Actual/360 ICMA]
• Additional Information if EURIBOR is not available: [●]
• Interest Determination Date: [●] (only in case of Variable Interest Rate)
• Relevant Financial Centre: [●] (only in case of Variable Interest Rate)
14. Amortization of the notes:
• Maturity Date: [●]
• Amortization Price: [●]
• Early amortization by the Issuer: [Yes]
C. OPERATIONAL INFORMATION
15. Placement Entity / Entities: [●]
16. Paying Agent: [●]
17. Relevant Calendar: [●]
D. ADDITIONAL INFORMATION
18. Representation of the noteholders: [●]
19. Rating of the Issuer: [●]
20. Rating of the Notes: [●]
21. Placement Method: [●]
2. ISSUE AGREEMENTS OF THE SECURITIES AND ON THE
CONSTITUTION OF THE SYNDICATE OF NOTEHOLDERS
Pursuant to the Documento Base Informativo de Incorporación under which this issue of
notes is made and according to the rules and Regulations established therein in relation
to the constitution of the Syndicate of Noteholders, for this issue of notes a Syndicate of
Noteholders has been constituted, called “[●]”.
[●] and through the signing of these Final Conditions, accepts his appointment as
Commissioner of the Syndicate of Noteholders, having the powers attributed to him in
the Regulations included in the Documento Base Informativo de Incorporación.
3. AGREEMENTS ON ISSUANCES AND ADMISSION TO TRADING
The admission to trading will be requested of the notes described in these “Final
Conditions” on [MARF / other markets to be stated here] and their listing is ensured
within a period of less than one month as form the date of disbursement and within the
validity period of the Programme.
These Final Conditions include the information necessary for the admission to listing of
the securities on the market[s] mentioned above.
Settlement will take place through Sociedad de Gestión de los Sistemas de Registro,
Compensación y Liquidación de Valores, S.A.U., (IBERCLEAR)/ other depositaries to
be stated here.
Signing on behalf of the Issuer; Mr. [NAME AND SURNAMES], acting as [POSITION],
by virtue of the [TYPE OF EMPOWERMENT AND DATE THIS WAS GRANTED]
and in the name and on behalf of the Issuer, with address at [●].
ISSUER
Teknia Manufacturing Group, S.L.U.
Barrio de San Agustín s/n
Nelorrio 48
Bizkaia
PAYING AGENT
BANCO DE SABADELL, S.A.
ARRANGERS AND PLACEMENT ENTITIES
BANCO DE SABADELL, S.A. and BANKINTER, S.A.
REGISTERED ADVISOR
PKF Attest Servicios Empresariales, S.L.
Calle Orense 81
28020 Madrid
INDEPENDENT AUDITORS
Moore Stephens AMS, S.L.
LEGAL ADVISORS OF THE ISSUER
Cuatrecasas Gonçalves Pereira
Almagro 9,
28010 Madrid
LEGAL ADVISOR OF THE ARRANGERS
J&A Garrigues, S.L.P.
Hermosilla 3,
28001 Madrid