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Loans and Receivables
On December 11, 2009, the Company loaned $5,000
to Timminco’s wholly-owned subsidiary, Bécancour
Silicon Inc. (“Bécancour”), in exchange for a convertible
promissory note (“Initial Convertible Note”). On
December 15, 2010, the Company amended the terms of
the loan, through an amended convertible promissory
note (“Amended Convertible Note”). As the amendments
to the debt agreement were considered substantial, the
transaction was accounted for as an extinguishment of
the Initial Convertible Note and issuance of new debt in
accordance with IAS 39. The Initial Convertible Note had an
annual interest rate of 12%, payable quarterly in arrears
starting December 31, 2009 and maturing on January 3,
2011. The Amended Convertible Note bears interest at
14%, payable quarterly in arrears starting December 31,
2010 and matures on January 3, 2014. The full principal
amount is convertible into common shares of Timminco at
the conversion price, at AMG’s option at any time, subject
to customary anti-dilution adjustments. The conversion
price was amended from C$1.58 per share under the Initial
Convertible Note to a conversion price of C$0.26 per share
under the Amended Convertible Note.
Both the Initial and Amended Convertible notes were
accounted for as hybrid instruments with the note and
the equity option being valued separately. The value of the
Amended Convertible Note was $71 as of December 31,
2010. The value of the Initial Convertible Note was $3,095
as of December 31, 2009. The value of the equity option
on the Amended Convertible Note was $5,113 as of
December 31, 2010. The value of the equity option on the
Initial Convertible Note was $1,718 as of December 31,
2009. The Company recorded finance income of $371
during the year ended December 31, 2010 as a result of
a gain recognized on the amendment. The Company also
recorded finance income of $100 for an amendment fee
charged in conjunction with the amendment. Interest
income from the convertible notes was $600 the year
ended December 31, 2010. Interest income from the Initial
Convertible Note was $32 the year ended December 31,
2009. All interest for 2010 was paid as of December 31,
2010. Interest receivable related to the Initial Convertible
Note was $34 as of December 31, 2009.
Between January 2004 and May 2007, ALD entered into a
series of loan agreements with Intellifast GmbH (formerly
known as PFW Technologies GmbH), a subsidiary of
Safeguard and PFW LLC, in an aggregate principal
amount of $1,706. At December 31, 2010, approximately
$2,045 (2009: $2,212) was outstanding under these
loans including interest and an additional amount of
approximately $875 (2009: $783) was due for normal
course of business transactions. The loans were made
for growth capital and expansion purposes. The highest
interest rate on the outstanding loans is 11%.
The Company has been performing services for and has
loaned money to GfE Medical which is a subsidiary of
Safeguard. During the year ended December 31, 2008,
one loan from GfE Medical was transferred to Safeguard.
This loan, in the amount of $698 was repaid by Safeguard
in 2009, although an amount of $29 was still owed for
interest as of December 31, 2009. No amounts are
outstanding as of December 31, 2010.
Transactions with associates
The Company completed the following purchases of
Timminco shares during 2010 and 2009:
Shares
Total equity
Date
2010
purchased Share price purchase
June 14, 20101 2009
15.4 million C$0.65 $9,705
November 20, 2009 3.84 million C$1.38 $5,041
April 30, 2009 7.43 million C$2.02 12,313
February 3, 2009 3.94 million C$3.55 11,519
Total 15.21 million $28,873
1 Timminco 2010 private placement completed in three tranches
with third tranche closing on June 14, 2010.
As of December 31, 2010, the Company owned 83,146,007
or 42.5% of the outstanding shares of Timminco. As of
December 31, 2009, the Company owned 67,761,392 or
42.5% of the outstanding shares of Timminco.
During the first quarter of 2010, one of the Company’s
subsidiaries agreed to prepay $4,765 to Timminco for
2,000 metric tons of silicon metal to be delivered in the
third and fourth quarters of 2010. Timminco delivered
silicon metal to an agreed-upon customer who then repaid
the Company. As of December 31, 2010, no inventory
remained to be delivered to the customer. The Company
recognized $353 in commission income from Timminco
related to these sales.
During the second quarter 2009, 5,000 metric tons of
silicon metal finished goods inventory was purchased from
Timminco for a purchase price of $8,515. This inventory
was sold to a European silicon metal customer in 2009 and
2010. No inventory remains to be sold to the customer as
at December 31, 2010. During the fourth quarter of 2009,
an additional purchase of $6,449 was made for sale to a
different European silicon metal customer. This inventory
was fully delivered in 2009. The Company recognized $538 in
commission income from Timminco related to these sales.
On March 31, 2009, fixed assets were purchased from
Timminco for $7,546. A portion of this was paid in cash
Notes to Consolidated Financial Statements 137