CORRECTION: ACME Corporation SIA Un-audited Annual

Riga, 2015-03-04 14:09 CET (GLOBE NEWSWIRE) -- Acme Corporation SIA (hereinafter – ‘the Company’ or ‘Acme Corporation’) and its subsidiaries (hereinafter – ‘the Group’) invest in the operation and management of rental real estates (offices, retail and land development) in Latvia. As of 31 December 2014 Acme Corporation was the parent for four Latvian registered limited liability companies – Apex Investments SIA (grocery anchored retail real estate), Neatkarīgā patentu aģentūra SIA (office anchored real estate), Tukuma Projekts SIA (DIY anchored retail real estate) and Big Truck SIA (property development). As of the date of approval of this report Acme Corporation no longer holds shares of Apex Investments SIA and Tukuma Projekts SIA.

Results for the year

Acme Corporation during the year continued the holding company operations.

During the financial year 2014 subsidiary Tukuma Projekts paid an accumulated dividend of EUR 500 000 to the Company. Acme Corporation used 100% of the dividend received to increase the share capital of NPA, being a large step in the correction of NPA’s negative equity.

During the financial year Acme Corporation entered into and concluded a share purchase agreement with Apex Investments for 100% of the shares in Neatkarīgā patent aģentūra owned by Apex Investments. Further, Acme Corporation entered into and concluded a share purchase agreement with Apex Investments for 100% of the shares in Big Truck owned by Apex Investments. The transactions were undertaken at arm’s length. Acme Corporation paid for the shares of Neatkarīgā patentu aģentūra and Big Truck by entering into netting off agreement with Apex Investments. As part of the netting off agreement Acme Corporation reversed in full a bad debt provision of the Apex Investment debt outstanding.

For the year ended 31 December 2014, overall Acme Corporation has experienced significant improvements. The year saw Acme Corporation significantly beat prior year 2013 net loss of EUR 1 144 to a profit in 2014 of EUR 3 689 521. The reported profit includes reversal of impairment on assets of EUR 3 214 267. When the impairment reversal is removed from the profit figure a more comparable profit of operations emerges of EUR 475 254 for the year ended 2014.

A separate company SIA Slokas 161 for the Slokas property was established early in January 2015 since management does not want to mix grocery anchored retail with other anchored retail. Transfer of Slokas property from Apex Investments to Slokas 161 took place in January 2015.

Bond

Whilst the bond is listed, it continued to demonstrate a significant level of illiquidity in 2014.

Acme Corporation has made the first repayment of principal to bondholders of record with the January 2015 payment. The Company has made all coupon payments on the bonds to date. Funds have been reserved for settlement of coupon and principal due on 30 April 2015.

Sale of investments

In October 2014 management signed a share purchase agreement for the sale of Apex Investments SIA and Tukuma Projekts SIA to Hili Properties BV. Management believes that the sale offers a significant monetary benefit to the Group. Management intends to use the majority of proceeds to deleverage from Swedbank. The delivering will greatly reduce an asymmetrical risk associated with the current portfolio bondholders and equity positions that is amplified in the event of increased interest rates and reductions in gross revenue. The sale is expected to conclude in early 2015.

Risk Management

The Company seeks to minimise potential adverse effects of identified financial risks. For the largest part of the year the terms and conditions of the loan to a subsidiary mirrored those of the bond. Financial assets which expose the Company to high credit risk concentration are cash held at bank and receivables under loan to the subsidiary. The latter was repaid in full in 2015. The Company’s counterparties in banking transactions are reputable local banks with adequate credit history.

Events after the balance sheet date

Except for events described in Note 17 to the un-audited financial statements, there have been no other events since the last date of the reporting year, which would have a significant effect on the financial position of the Company as at 31 December 2014.

Profit distribution

The management proposes to retain all the profit at the Company’s disposal.

         Alona Romanova          office manager          +371 67333504          alena@rbm.lv