Almanova Corporation's Interim Report 27 January - 30 June 2005

ALMANOVA CORP.  STOCK EXCHANGE RELEASE 26 AUGUST 2005, 9.00  AM  1 (5)
 
ALMANOVA CORPORATION'S INTERIM REPORT 27 JANUARY - 30 JUNE 2005

Almanova Corporation was established on 27 January 2005, and registered on 3 February 2005 with the Finnish Trade Register. Almanova has not engaged in business activities generating net sales.
 
Almanova made a conditional agreement on 4 March 2005 to acquire the 13,114,380 Alma Media Series I shares and 13,006,588 Series II shares owned by Bonnier & Bonnier AB (Bonnier) and Proventus Industrier AB (Proventus) for a total purchase price of EUR 339.7 million. 
 
The Boards of Directors of Almanova and Alma Media signed a merger plan on 8 March 2005 under which Alma Media will be merged with Almanova through the transfer of Alma Media's assets and liabilities to Almanova, after which Alma Media will be dissolved. Pursuant to the merger plan, the shareholders of Alma Media will receive seven (7) shares of Almanova for three (3) Series I shares of Alma Media and two (2) shares of Almanova for each one (1) Series II share of Alma Media. Where the holding of Series I shares of a shareholder in Alma Media is not divisible by three, the shareholder will receive monetary merger consideration of 14.00 euros per each Series I share in Alma Media exceeding the highest number of shares divisible by three.
 
The Extraordinary General Meeting of Shareholders of Almanova on 23 March 2005 approved the merger of Almanova and Alma Media in accordance with the merger plan approved by the boards of directors of the companies on 8 March 2005 and resolved to increase Almanova's share capital by a maximum of EUR 51 million for the payment of the share consideration in the public exchange and tender offer and the share consideration to be given as merger consideration in the merger.
 
On 8 March 2005 Almanova announced its decision to make a conditional public exchange and tender offer for all the shares and warrants of Alma Media. In the exchange and tender offer Almanova offered the holders of Series I shares of Alma Media a cash payment of EUR 6.50 per each Series I share and 1.25 new Almanova shares per each Series I share, and the holders of Series II shares of Alma Media a cash payment of EUR 5.60 per each Series II share and 1.07 new Almanova shares per each Series II share, as well as EUR 29.00 for each 1999A warrant and EUR 25.70 for each 1999B warrant. The offer period for the public exchange and tender offer began on 30 March 2005 and ended on 19 April 2005.
 
As a result of the exchange and tender offer a total of 13.03% of Alma Media's share capital and 4.69% of the total voting participation was transferred to Almanova, including the new shares subscribable under the warrants transferred to Almanova. In order to pay the consideration in the exchange and tender offer, Almanova's share capital was increased to EUR 5,370,489, in addition to which Almanova raised a loan of EUR 48.7 million on 28 April 2005.
 
The Almanova shares have been listed on the Pre-List of the Helsinki Exchanges since 28 April 2005.
 
ADMINISTRATION
 
The members of Almanova's Board of Directors from the establishment of the company until the listing on the Pre-List on 28 April 2005 were Matti Rantanen (chairman), Jorma Leinonen and Axel Cedercreutz. During this period the company's CEO was Eero Mörä.
 
The members of Almanova's Board of Directors since the listing of the company on the Pre-List, i.e. since 28 April 2005, have been Kari Stadigh (chairman), Matti Kavetvuo, Lauri Helve, Matti Häkkinen and Harri Suutari. The company's CEO since 28 April 2005 has been Kai Telanne.
 
During the reporting period, an Extraordinary General Meeting of Shareholders was held on 23 March 2005 which resolved to approve the merger of Almanova and Alma Media in accordance with the merger plan approved by the boards of

 
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directors of the two companies on 8 March 2005. The EGM also resolved to increase Almanova's share capital by a maximum of EUR 51 million in order to pay the share consideration in the public exchange and tender offer and the share consideration to be given as merger consideration in the merger, and to appoint Lauri Helve, Matti Häkkinen, Matti Kavetvuo, Kari Stadigh and Harri Suutari to the Board of Directors following the listing of the company's share on the Pre-List.
 
THE ALMANOVA SHARE
 
Almanova has one share series and 8,950,815 shares. The company's share capital registered with the Finnish Trade Register amounts to EUR 5,370,489. The company's share has been quoted on the Pre-List of the Helsinki Exchanges since 28 April 2005. A total of 3,220,316 shares were traded during the reporting period.
 
Almanova Pre-List quotations 28 April - 30 June 2005
 
 
SHAREHOLDERS AND FLAGGING NOTICES
 
Almanova's founding shareholders were Sampo Life Insurance Company Ltd, Varma Mutual Pension Insurance Company, Kaleva Mutual Insurance Company and the C.V. Åkerlund Fund.
 
Subsequent to the settlement of the exchange and tender offer, Varma Mutual Pension Insurance Company's holdings in Almanova decreased on 27 April 2005 below one-fourth (1/4) of the share capital and total voting participation, Sampo Life Insurance Company Limited's holdings in Almanova decreased below one tenth (1/10) of the share capital and total voting participation, the holdings in Almanova of Kaleva Mutual Insurance Company as well as the C.V. Åkerlund Fund decreased below one-twentieth (1/20) of the share capital and total voting participation, and the aggregate holdings of the investment funds administered by Sampo Fund Management Ltd increased above one-twentieth (1/20) of the share capital and total voting participation.
 
Almanova's 10 principal shareholders at 30 June 2005
 
 
PROGRESS OF MERGER
 
The merger has made planned progress. The agreement signed by Almanova with Bonnier and Proventus regarding Almanova's acquisition of the Alma Media shares owned by Bonnier and Proventus is expected to be completed during September 2005. After the completion of this transaction Almanova will own 52.7% of the Alma Media shares, corresponding to 52.7% of the total voting participation. Hence, following the transaction, Alma Media will become a subsidiary of Almanova.
 
The merger of Alma Media and Almanova will be completed on or about 3 October 2005. In the merger, the assets and liabilities of Alma Media will be

 
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transferred to Almanova, after which Alma Media will be dissolved and Almanova will be renamed Alma Media Oyj (in English Alma Media Corporation).
 
The new company's operations will comprise the operations and business of the existing Alma Media.
 
Almanova will apply for listing of its shares on the Main List of the Helsinki Exchanges following the completion of the merger. Following the merger, the company will have 74,615,208 shares in one share series.
 
PROSPECTS
 
The existing Alma Media, due to be merged into Almanova, published its interim report on 12 August 2005, in which the company estimated that its full-year comparable net sales and operating profit would be higher than in 2004. The main factor affecting Alma Media's profitability is the development of media advertising in Finland as roughly one-half of the Group's revenues derives from advertising.
 
The comparable figures mentioned in the above estimate refer to Alma Media for the full year 2004 excluding the Broadcasting division, and to the aggregate pro forma figures for Alma Media and Almanova in 2005 excluding the Broadcasting division. The operating profit forecast does not include any actual or future expenses relating to the divestment of the Broadcasting division and the restructuring measures related to this transaction.
 
Following the merger, which is planned to be completed on or about 3 October 2005, Almanova Group's management estimates that the company will be net debt-free. The Group's management believes that the Group's cash flow will be positive for the remainder of the year. As a Group generating a steady cash flow, Almanova Group has the financial reserves to undertake acquisitions and to repay equity capital to its shareholders. However, equite capital repayments will not be possible until 2006, when it becomes technically possible to repay restricted equity.
 
* No comparison figures are available since the company was established on 27 January 2005.
 
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** The company has undertaken to acquire the Alma Media shares owned by Proventus Industrier AB and Bonnier & Bonnier AB for a total purchase price of EUR 339.7 million.
           
 
MAIN ACCOUNTING PRINCIPLES (FAS)
 
Almanova has prepared this report in accordance with Finnish Accounting Standards (FAS).
 
Almanova has been a stand-alone company without subsidiaries or associates during the reporting period and therefore has not prepared consolidated financial statements. Following completion of the above mentioned restructuring measures during autumn 2005, the company will operate as the parent company of the new Alma Media Group. The decision in principle has been taken in Alma Media Group that the non-consolidated financial statements, including the financial statement of the parent company, will be prepared applying Finnish valuation and accounting principles while the consolidated financial statements will be prepared in accordance with International Financial Reporting Standards (IFRS) as stated in Alma Media Group's releases in 2005.
 
The FAS figures in this interim report 1-6/2005 differ from IFRS valuation and accounting principles in the following respect:
 
The company has entered its listing expenses, EUR 1.0 million, under financial expenses in the income statement, in accordance with the decision 2000/1635 of the Finnish Accounting Board. Under IFRS, these listing expenses would be debited directly to the share premium fund under shareholders' equity. For this reason the IFRS result for the period 1-6/2005 would be EUR 1.0 million higher than as shown in this interim report (FAS). However, the non-consolidated IFRS and FAS figures for shareholders' equity in Almanova as per 30 June 2005 are identical.
 
Almanova publishes its nine-month interim report on 2 November 2005.
 
ALMANOVA CORPORATION
c/o Alma Media Corporation
Eteläesplanadi 14, 00130 Helsinki, Finland
 
Further information:
Teemu Kangas-Kärki, CFO, Alma Media Corporation, tel. +358 10 665 2244
 
DISTRIBUTION: Helsinki Exchanges, principal media
 
  • Date: 26.8.2005, 11:00
  • News type: Stock exchange release

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