Athens, 25.11.2011 Forthnet with regard to the decision of the Board of the Athens Stock Exchange, dated 24.11.2011, for the transfer of its shares to the Under Surveillance Segment, informs the investing public as to the following:
Due to the deteriorating macroeconomic situation, Forthnet Group has decided to carry out two successive impairments of goodwill recorded on its financial statements - the first accounted for in the financial statements of December 2010 (amounting to € 18.7 million) and the second to those of June 2011 (amounting to € 38.2 million).
The goodwill in the consolidated financial statements is being reviewed by the Management and the Auditors of the Group every six months. The review is based on present value of the business prospects of the Group, as reflected under the current market conditions (WACC).. Although the prospects have not been substantially affected by the economic situation, the WACC used increased dramatically from 10.7% in 2010 to 13.6% in June 2011. This disproportionately affected the valuation of goodwill attributed to the pay-TV business (Nova), resulting in a cumulative impairment of € 56.9 million.
The above impairment affects neither the cash situation nor the ever-improving and developing operational performance of the Group. Specifically, for the first 9 months of 2011, adjusted EBITDA improved by €12million (to €62.9million) and the operating cash flow by €30 million (to €39.9 million) compared to the relevant period 2010 while the Groups cash reserves amounted to a total of € 21 million. But insofar as it affects accounting profitability and equity of the Group, these impairments lead to technical breach of a particular financial parameter of the Rulebook of ASE, which decided to put Forthnets shares in the Under Surveillance Segment.
Finally, with regard to the rational of the press release of the ASE, the board of Forthnet has decided to convene an Extraordinary General Assembly for December 15, 2011, in order to resolve on a share capital increase of the company with the scope to raise at least € 30 million.
The Management is continuing to work towards improving the Companys performance - always within the framework of safeguarding the best transparency of its financial statements and information to the public.