Uutechnic Group to sell 81% of Japrotek Oy Ab’s shares to the company’s management. The implementation of this transaction is conditional on the final decisions of the financiers.
PLC UUTECHNIC GROUP OYJ STOCK EXCHANGE RELEASE June 4, 2018 at 9.30 am
Uutechnic Group to sell 81% of Japrotek Oy Ab’s shares to the company’s management. The implementation of this transaction is conditional on the final decisions of the financiers.
Plc Uutechnic Group Oyj has today signed a binding agreement according to which it will sell 81% of Japrotek Oy Ab’s shares to the company’s management. The shares will be sold for a nominal price of EUR 20,000. With this transaction, Uutechnic Group will increasingly focus on developing its mixing technology business in accordance with its strategy. The implementation of the transaction is conditional on the final decisions of the financiers and the finalisation of the required financial arrangements. According to current estimates, the financing decisions will be made by the end of June 2018.
In connection with this transaction, Japrotek Oy Ab will be recapitalised and its financing rearranged. In addition to implementing Uutechnic Group’s strategy, this arrangement is entered into in order to improve Japrotek Oy Ab’s business conditions with key persons committing to the company as owners. Furthermore, it is estimated that the transaction will improve Japrotek Oy Ab’s financial position, cost structure and competitiveness. Regarding Uutechnic Group’s remaining share of ownership (19%) after the transaction, the parties have agreed on an option to sell/purchase for a nominal price. The option is valid under certain conditions until 30 June 2023.
As part of the arrangement, Uutechnic Group and Japrotek have agreed on an accord concerning Uutechnic Group’s receivables in the amount of EUR 2.8 million out of its total receivables of EUR 5.3 million as per 31 December 2017. The remaining EUR 2.5 million not included in the creditor accord will be treated as a subordinated loan. In addition, as part of the transaction, Uutechnic Group undertakes to recapitalise Japrotek Oy Ab with an additional EUR 370,000, which will be granted as a subordinated loan.
After the transaction, Uutechnic Group’s remaining guarantor liabilities will include warranty liabilities amounting to approximately EUR 1.6 million for products that Japrotek has manufactured before the arrangement and a secondary recapitalisation liability of Japrotek Oy Ab amounting to EUR 750,000. In addition, the absolute guarantee given by Plc Uutechnic Group Oyj concerning the lease agreement for Japrotek’s premises will continue. The liabilities related to Japrotek’s product warranties will cease to exist in accordance with the dates of expiry applicable to the warranties, with the last liability ceasing to exist on its date of expiry on 15 October 2021. The recapitalisation liability remains in force until 30 June 2021. In connection with the transaction, Uutechnic Group will be exempted from all guarantor liabilities related to Japrotek’s work and delivery phases, which amount to approximately EUR 3,0 million and Uutechnic Group will not be responsible for Japrotek’s new project-related guarantor liabilities arising after the transaction execution.
Japrotek Oy Ab’s level of business success has varied from one year to another due to tough market competition and fluctuations in the investment volumes of customers. The profitability of the large vessel projects that Japrotek has delivered has also fluctuated, and market success will require the company to have an increasingly competitive cost structure. With the stronger capital structure enabled by skilled key persons, entrepreneurial leadership, a lighter cost structure and a stronger capital structure based to this transaction, the competitiveness of Japrotek Oy Ab’s business will significantly improve.
After the transaction has been executed, Uutechnic Group will focus on developing and growing its Mixing Technology Business in an increasingly streamlined manner. The realigned focus is expected to have a positive effect on the Uutechnic Group’s financial result in the future. The transaction will reduce the Group’s balance sheet and the transaction will have no significant effect on the Group’s financial results in 2018. In addition, AP-Tela Oy in Kokkola will continue to be a part of the Uutechnic Group. After the transaction, normal commercial cooperation will be continued with Japrotek Oy Ab in the area of combination deliveries of vessels and agitators.
In the financial year 2017, Japrotek Oy Ab’s turnover was EUR 13.3 million (2016 EUR 17,5 million) with an operating result of EUR -1.1 million (2016 EUR 0,5 million).
In Uusikaupunki June 4, 2018
PLC UUTECHNIC GROUP OYJ
Board of Directors
Further information:
Jouko Peräaho, CEO Plc Uutechnic Group Oyj, +358 500 740 808
www.uutechnicgroup.fi
Uutechnic Group is focused on improving the competitiveness of its customers by providing them advanced equipment technology and unique service concept worldwide. The product range includes agitators, different types of pressure vessels, process- and storage tanks, reactors and heat exchangers. Additionally, different types of long welded and machined axially symmetrical parts as rolls, cylinders, tubes and cones.
The main industries are hydrometallurgy, mining-, pulp and paper-, food-, fertilizer-, other chemical industries and environmental technology.
Uutechnic Group’s business consists of one segment, Process Solutions, which is divided into two business lines: Mixing Technology and Tanks & Rolls. Mixing Technology business line consists of Stelzer Rührtechnik Int. GmbH and Uutechnic Oy. Tanks & Rolls business line consists of Japrotek Oy Ab and AP-Tela Oy.