Almanova Corporation’s Interim Report 27 January- 30 September

ALMANOVA CORPORATION           STOCK EXCHANGE RELEASE 28 OCTOBER 2005, 9.00  AM  1 (6)

 

ALMANOVA CORPORATION’S INTERIM REPORT 27 JANUARY – 30 SEPTEMBER 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, and 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 purchase 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 purchase offer for all the shares and warrants of Alma Media. In the exchange and purchase 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 purchase offer began on 30 March 2005 and ended on 19 April 2005.

 

As a result of the exchange and purchase 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 purchase 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.

 

The merger of Almanova and Alma Media is planned to take place on 7 November 2005, in conjunction with which Almanova will be renamed Alma Media as outlined in the merger plan. Almanova has applied for listing of its shares on the Main List of the Helsinki Exchanges from 7 November 2005.

 

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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 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 purchase 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.

 

FINANCING

 

On 8 September 2005 Almanova Corporation signed a EUR 100 million domestic commercial paper programme. The programme permits the company to issue commercial papers with a maturity of less than one year in order to finance working capital and to cover other short-term financing needs. The new programme replaces Alma Media Corporation’s existing EUR 75 million commercial paper programme which will cease automatically when Alma Media Corporation and Almanova Corporation merge to form one company.

 

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 2,400,444 shares were traded between 1 July -30 September.

 

Almanova Pre-List quotations 1 July – 30 September 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.

 

The number of Almanova Corporation shares held by Nordea Nordic Small Cap, an equity fund managed by Nordea Rahastoyhtiö Suomi Oy, exceeded 1/10th of the total following a share transaction on 20 September 2005. On 23 September Nordea Nordic Small Cap’s holding decreased below one-twentieth (1/20) of the total. On 23 September 2005 the number of Almanova shares held by Nordea Nordenfond, an equity fund managed by Nordea Rahastoyhtiö Suomi Oy, exceeded one-twentieth (1/20) of the total.

 

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Almanova’s 10 principal shareholders at 30 September 2005

 

 

17.1 % of the shares are nominee-registered at Nordea Bank Suomi and 15.9 % at Skandinaviska Enskilda Bank.

 

PROGRESS OF MERGER

 

Completion of the merger of Almanova and Alma Media was postponed from the previously estimated date 3 October 2005 to 7 November 2005 since the Finnish Financial Supervision Authority decided to reinvestigate the IFRS treatment of the Almanova’s acquisition of Alma Media shares in Almanova’s forthcoming consolidated financial statements. The company issued a release on this matter on 27 September 2005.

 

Almanova has applied for listing of its shares on the Main List of the Helsinki Stock Exchange with effect from 7 November 2005. After the merger the company will have an estimated 74.6 million shares in one share series.

 

PROSPECTS

 

The existing Alma Media, due to be merged into Almanova on 7 November 2005, published its interim report on 28 October 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 7 November 2005, Almanova Group’s management estimates that the company will be ne debt-fee. 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, equity capital repayments will not be possible until 2006, when it becomes technically possible to repay restricted equity.
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* No comparison figures are available since the company was established on 27 January 2005.

 

 

 

Almanova’s result for the period is formed mainly by financing expenses

arising from arranging credit limits, from listing costs and from financing the purchase of the Alma Media shares.

 

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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.

           

 

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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 1-9/2005 would be EUR 1.1 million higher than as shown in this interim report (FAS). For the period 7-9/2005 the IFRS result would be EUR 0.1 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 September 2005 are identical.

 

Almanova, which will be renamed Alma Media in the merger, will publish its financial statements for 2005 on 10 February 2006.

 

ALMANOVA CORPORATION

c/o Alma Media Corporation

Eteläesplanadi 20, 00130 Helsinki, Finland

 

Further information:

Teemu Kangas-Kärki, CFO, Alma Media Corporation, tel. +358 10 665 2244

Ahti Martikainen, SVP, Corporate Communications and IR, tel. +358 10 665 2242

 

DISTRIBUTION: Helsinki Exchanges, principal media