Strengthening of balance sheet and third quarter 2013 trading update
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Strengthening of balance sheet
In relation to the restructuring of the company announced 11 September this year, the board has been contemplating a balance sheet strengthening to provide more adequate funding for a refocused business. Agrinos is pursuing several tracks to achieve an improved long term financing solution. In order to ensure financial flexibility until a new long term financing is in place, Agrinos has raised a NOK 41m (equal to USD ~6,8m) bridge loan. The loan carries a coupon of 20% p.a. and matures on 30 June 2014. Once the Company resolves to issue new shares in a financing solution of at least USD 12.5m, the bridge loan including accrued interest will convert into equity on the same terms.
The bridge loan is subject to approval by the Extraordinary General Meeting to be held on 15 November 2013.
Q3 trading and FY2013 outlook update
- 339 000 HYT® units deployed in Mexico in Q3 of which 219,000 organic, YTD Q3’13 deployment of 1 223 000 units
- Q3 sales revenues of USD 1m based on the current revenue recognition principles. No revenues recognized in Mexico in the quarter due to distributors carrying sufficient inventory
- Q3 operating income of minus USD 6m (before taking into account positive impact of the recalculation of the earn-out – see below)
- Q3 collection of USD 7.2m of which USD 6m in Mexico, YTD Q3’13 group collection USD 16.8m
- Gross cash burn excluding distributor funding better than plan due to faster realization of cost cuts
- Restrictive funding of distributors in order to facilitate restructuring
- Cash position of USD 6.2m as of 30 September 2013, expected to be USD 9.5m-10m following bridge loan draw-down
- End customers have continued to pay as per cash forecast in the Q2 interim report, hence the FY2013 cash collection forecast of USD 20-25m is maintained
- Agrinos will present an analytical restatement of the P&L figures for the period 2011–Q3 2013 in connection with the presentation of the Q3 interim report
- Group cost reductions ahead of plan, gross cash costs reduced from USD 16.1m in Q2 to USD 10.9m in Q3
- Revision of distributor agreements in Mexico near conclusion– provisions made in Q4 2012 and in Q2 2013 sufficient to cover expected losses
- Agreement with Agrinos co-founder Karl Fick on amendment to the 2011–2014 earn-out agreement. Earn-out to be recalculated from 2011 based on Agrinos’ revenue recognition principles. Payment of earn-out to be postponed and be dependent on Agrinos cash position. To be implemented in the financial reporting from Q3 2013
Search for new Group CEO with international profile well underway, with selection expected during Q1 2014
Third quarter interim report announcement
The company will provide further details regarding the financial and operational status and outlook when the full Q3 2013 interim report and financial statements are announced on 27 November 2013.
Kjetil Bohn, Agrinos’ interim CEO said in a comment: “We have secured a bridge loan that provides the company with an opportunity to work on a more long term strengthening of the balance sheet, while we continue our restructuring to ensure viable growth. We see positive effects on the cost side already, while we continue to improve operational performance and control through tougher prioritization and organizational development”
For further information, please contact:
EVP Corporate Communications and Investor Relations
+47 908 58 221
Agrinos is a green technology company committed to improving the productivity and sustainability of modern agriculture. Agrinos’ range of High Yield Technology® (“HYT®”) products helps farmers to practice profitable agriculture by providing increased crop productivity, improved efficiency of conventional fertilizer and a reduced environmental footprint.
Certified as organic and based on Agrinos’ proprietary technology, the HYT® products provide benefits by strengthening the soil-based microbial ecosystem, stimulating crop development at key points in the growth cycle and boosting natural plant resistance to pathogens and threats. With solutions for a variety of crop categories, the technology comprising the HYT® products has demonstrated its value in third-party trials in key agricultural regions worldwide.« Return to News