Restructuring proceedings

The District Court of Espoo has confirmed by a decision on 15 November 2016 the amended restructuring programme drafted by the administrator Jari Salminen as the payment program of the company.

The Company has followed the provisions of the payment program and has paid the payments to the creditors as stated in the payment program.

The total amount of the restructuring debts taken into account in the payment program was approximately 73.9 million euros. The amount of intragroup restructuring debts that was fully cut was approximately 36.7 million euros. The amount of normal unsecured restructuring debts was approximately 13.2 million euros that was cut off by 50 percent. The amount of the secured restructuring debts was approximately 23.8 million euros out of which approximately 7.9 million euros was secured by business mortgage.

On December 31 2018, balance of the secured restructuring debts was 16.6 million euros and normal unsecured restructuring debts were 5.6 million euros. Payments under the payment program will end on 30 June 2025.

Viking Acquisition Corp. announced in March 2018 that it will undertake to make a voluntary public cash tender offer to purchase all of the issued and outstanding shares in Tecnotree. Viking is the biggest creditor of the company, and had at that time receivables amounting to 21.64 million euros from Tecnotree.

On 4 May 2018 Viking Acquisition Corp. decided that it will not realise the voluntary public cash tender offer.

On 31 December 2018, at the end of the reporting period, Viking Acquisition Corp. is with its holding of 23.64% one of the biggest shareholders at the company and its receivables from the company amount to 20.6 million euros.

The restructuring programme includes a provision regarding a duty to make supplementary payments on the unsecured restructuring debts if the actual cash flow of Tecnotree Oyj exceeds the projected cash flow during the payment program.

Company’s creditor Viking Acquisitions Corp. has claimed in the District Court of Espoo supplementary payments of EUR 1.95 million during the restructuring programme for years 2016 – 2017. Viking has considered that the repatriation of receivables pledged by the Company to Nordea and Finnvera for approximately EUR 6 million must be taken into account in the Company's operational cash flow. The Company has made a supplementary payment calculation without taking into account the pledged receivables mentioned above.

Jari Salminen, the administrator of the company's restructuring programme , has considered that the receivables have not been taken into account in preparing the Company's restructuring budget and are therefore not taken into account when calculating the cash flow of the Company. The mentioned funds have been pledged to the creditors of the company and therefore, the Company has no control over the use of the funds. The repatriated funds have been credited directly to creditors without any cash flow / impact in supplementary payments in accordance with the terms of the restructuring programme approved by the District Court. The administrator considers that no supplementary payments will be made.

On 8 March 2019, after the end of the reporting period, the District Court of Länsi-Uusimaa resolved to reject the petition of Viking Acquisitions Corp. for the payment of a supplementary share under the restructuring programme. The resolution has legal force.

As stated in the restructuring programme, Tecnotree Oyj has committed to sell its real estate used as its office premises by 31 December 2019. The sale price shall be paid to the collateral holder Viking Acquisition Corp. The company has a right not to sell the real estate in the given time only if approved by the supervisor and Viking Acquisition Corp.

The District Court has appointed Attorney-at-Law Jari Salminen to supervise the implementation of the restructuring programme. The supervisor monitors the progress of the payment program and gives reports to the creditors.

Restructuring debt by category

EUR 1,000 2018 2017

Restructuring debt

Ordinary restructuring debts, interest-free 1,552 2,207
Ordinary restructuring debts from the main creditor, interest-free 3,997 4,396
Guaranteed restructuring debts from the main creditor, interest bearing 9,654 9,654
Corporate mortgage debts from the main creditor, interest bearing 6,952 7,881
Restructuring debt total 22,156 24,138

Current and non-current restructuring debt

EUR 1,000 2018 2017

Liquidity risk

Current interest-bearing liabilities, debt restructuring 4,465 1,247
Current non interest-bearing liabilities, debt restructuring 716 733
Non-current interest-bearing liabilities, debt restructuring 12,142 16,606
Non-current non interest-bearing liabilities, debt restructuring 4,834 5,552
Restructuring debt total 22,156 24,138