Sisal Annual Report 2011 - Permira

Interest on the credit lines provided under the Senior Credit Agreement is based onthe 1-month, 3-month or 6-month Euribor plus a spread of between 1.875% and3.68% depending on the characteristics of the credit line. The charge for interestin the statement of comprehensive income is integrated by the impact of recordingthe liability at amortised cost and the consequent inclusion, in determining the effectiveinterest, of the transaction costs incurred at the time of taking out the loan.The Senior Credit Agreement, moreover, contains financial covenants based onkey economic/financial ratios related to the consolidated financial statements andalso to the consolidated financial statements of the ultimate parent including, forexample, the ratio of net consolidated debt/gross consolidated operating profitand the ratio of the latter and the interest cost for the financing.As already indicated, besides the above mentioned loans, the Group has derivativecontracts to cover the risk of exposure to interest rate fluctuations with the characteristicsdescribed in the note on “Other current liabilities”.As for the loan from the shareholders, denominated Shareholder Loan C, this is abullet loan under which the Parent is required to repay the loan on request, butis subordinate to payment of the Senior Credit Agreement. The Parent has theright to repay all or a part of the loan at any time, taking into account the conditionmentioned above, and this loan is therefore considered a medium-/long-termloan. The interest on the “PIK Margin” (6%) can be capitalised for the entire termof the loan upon request of the party financed whereas for the quota of interestdenominated “Cash Margin” (4.5%), this right exists only for the first 12 monthsof the term of the loan; during the year a total of approximately EUR 18.9 millionof interest was capitalised and principal was repaid for about EUR 2.2 million.The sole shareholder, Gaming Invest S.à r.l., in June 2009, extended another loanof EUR 60 million, bearing interest from January 1, 2010, denominated “subordinatedzero coupon shareholder loan” with zero coupon interest, like the precedingloan, subordinate to the obligations under the Senior Credit Agreement. The paymentof 11% interest, during the year equal to EUR 4.2 million, which cannot becapitalised, will take place at the time of the repayment of principal; such interestsare recorded in the income statement using the amortised cost method.Provision for employee severance indemnities (16)The provision, amounting to EUR 7,876 thousand, reflects the effects of the presentvalue calculation required under IAS 19.89 CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2011