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Financial position – resultsNotes to the consolidated financial statements 4■■Consolidated free cash flow/consolidated net interest expense(debt service cover):Tested annually. Must be ≥ 1.1.■ ■ Minimum level of consolidated equity excluding changes forthe period attributable to translation adjustments, actuarialgains and losses and fair value adjustments:Tested half yearly as of 31 December 2012, and the minimumlevel of consolidated equity must be ≥ €10 million.■■Maximum level of capital expenditure:at 31 December 2012at 31 December 2013at 31 December 2014€50 million€50 million€45 millionIn order to reflect changes in interest rates since 2008 that hadnot been factored into the previous agreement, the interest marginon euro-denominated drawdowns was reset at 4.1%. A portionof the interest due has been partially deferred until theexpiration date in June 2014 as follows: 2.5% of interest deferredfor 2012; 2.0% for 2013; and 1.0% for 2014. The recognised interestexpense for 2012 (€6.5 million) will only be paid on expiry ofthe agreement.AntalisOn 30 April 2012, the syndicated credit facility signed in 2007 byAntalis and due to expire in October 2012 was extended for a furthertwo-year period through to 30 June 2014 for an amount of€560 million. A portion of this facility is repayable in €20 milliontranches, in 2012, 2013 and 2014.After depreciation of the 2012 tranche, this credit facility wasreduced to €540 million at 31 December 2012.Guarantees and collateral arrangements remain unchanged, particularlythe pledge of trade receivables.The extended 30 April 2012 agreement also stipulates that Antalismust comply with the following financial covenants:■■Consolidated net debt/EBITDA (leverage):at 30 June 2012 < 3.50at 30 September 2012 < 5.00at 31 December 2012 < 3.25at 31 March 2013 < 4.75at 30 June 2013 < 3.25at 30 September 2013 < 4.00at 31 December 2013 < 2.50at 31 March 2014 < 3.75■■Consolidated net debt/equity (gearing):Tested half yearly. Must be ≤1.1.■■Consolidated recurring operating income/net interest expense(interest cover):at 30 June 2012 ≥ 3.00at 31 December 2012 ≥ 2.50at 30 June 2013 ≥ 2.75at 31 December 2013 and thereafter ≥ 3.00In order to reflect changes in interest rates since 2008 that had notbeen factored into the previous agreement, the interest margin oneuro-denominated drawdowns was reset at between 2.35% and4.0%, depending on the average consolidated net debt/EBITDAratio.SequanaOn 30 April 2012, the bilateral credit line granted to Sequana bya top-ranking bank was extended for a further two-year periodthrough to 30 June 2014 for an amount of €36 million.Annual amortisation payments of €1.2 million were scheduledfor 2012 and 2013.The agreement also stipulates that Sequana must comply with thefollowing covenants:■■Consolidated net debt/EBITDA (leverage):at 30 June 2012 < 6.00at 31 December 2012 < 5.00at 30 June 2013 < 4.75at 31 December 2013 < 4.00■■Consolidated net debt/equity (gearing):at 30 June 2012 ≤ 1.3at 31 December 2012 ≤ 1.2at 30 June 2013 ≤ 1.2at 31 December 2013 ≤ 1.1■■Consolidated EBITDA/net interest expense excluding deferredinterest expense (interest cover):Tested half yearly. Must be ≥ 3.0.In order to reflect changes in interest rates that had not been factoredinto the previous agreement, the interest margin was resetat 4.5%.Sequana also has an overdraft facility of up to €5 million witha top-ranking bank. This facility was confirmed and renewedthrough to 30 June 2014. Annual amortisation payments of€0.12 million were scheduled for 2012 and 2013.Under the terms of the agreement extending this facility, theGroup’s consolidated equity must be above €110 million.The interest rate on amounts drawn down was reset at 3%.b/ Accounting impacts of the refinancingThe renewal of these credit lines was accounted for as an extinguishmentof debt since:■■the method of calculating interest has been substantiallymodified;■■new bank covenants have been introduced or existing bankcovenants have been substantially modified.Accordingly, outstanding amounts repayable by Arjowiggins upto July 2012 and Antalis up to October 2012 were recogniseddirectly in financial income and expense at 30 April for a totalamount of €1.4 million.Sequana | 2012 Document de référence (English version) | 133