SOLOCAL_Registration Document_2017

FINANCIAL STATEMENTS 6.1 Consolidated financial statements for the years ended 31 December 2016 and 2017

10.4

NET FINANCIAL INCOME

Net financial expenses are made up as follows:

As at 31/12/2017

As at 31/12/2016

(amounts in thousands of euros)

Gain on debt restructuring through the issuance of equity instruments (3)

300,198 (24,117) (10,545) 265,536

- - - -

Costs related to financial restructuring (4)

Accelerated amortization of borrowing costs related to the old debt NET GAIN FROM DEBT RESTRUCTURING AS AT 13 MARCH 2017

1

Interest and similar items on financial assets

395

1,231

Result of financial asset disposals

(2)

69

Dividends received

-

125

2

OTHER FINANCIAL INCOME Interest on financial liabilities

393

1,425

(24,428)

(64,120)

Income/(expenses) on hedging instruments Amortisation of loan issue expenses

36

-

(569) (476)

(7,840)

Change in fair value of financial assets and liabilities

25

3

Other financial expenses & fees (1)

(1,082) (1,801)

(1,405) (1,907)

Accretion cost (2)

FINANCIAL EXPENSES Gain (loss) on exchange NET FINANCIAL EXPENSE

(28,320)

(75,247)

-

(25)

4

237,609

(73,847)

Primarily composed of current costs linked to debt management. (1) The accretion cost corresponds to the increase, during the financial year, of the current value of pension commitments. (2) This amount includes on the one hand, in accordance with the application of IFRIC 19 (cf. Note 2), the difference between the book value (3) of the debt converted into equity instruments and the fair value of these same instruments which revealed non-monetary financial income of €298 million and on the other hand, revenue of €2.2 million on the partial repurchase of the bond loan. After deducting costs allocated directly as a reduction to the cash increase in capital. (4)

5

€18.1 million, conferring a right to the allocation of 9,067,200 shares in the case of conversion of all of MCBs. The latter were recognised as equity. Note, 6,226,522 MCB were converted as at 31 December 2017. New debt for an amount of €397.8 million. l The creditors subscribed to 215,443,818 shares and MCB for a total amount of €507.2 million. Accounting treatment of capital increases The original debt being the subject of restructuring is l derecognised in its entirety (€1,157.7 million). The new instruments (debt and equity) must be recognised for l their Fair Value which is €607.0 million (new debt of €398 million + issued instruments €209.2 million). The difference between the book value of the original debt l (€1,157.7 million) on the one hand, and the cash remitted to bearers (€252.7 million) and the fair value of the new instruments (€607.0 million) on the other hand, is recognised as an offset of results in accordance with IAS 39-41 and IFRIC 19 for an amount of €298.0 million.

10.5

FINANCIAL RESTRUCTURING

6

Description of the operation carried out in March 2017

7

Capital increase with preferential subscription rights retained for l €398.5 million (issue premium included), at a subscription price of €1 per share: 272,650,250 new shares subscribed for in cash by the l shareholders made as of right and excess shares, i.e. €272.7 million; 125,834,531 new shares subscribed for by creditors, in l accordance with their guarantee pledge, for €125.8 million (issue premium included), converting debts owed; 80,542,087 new shares subscribed for by creditors, in the l framework of a capital increase in which the shareholders’ preferential subscription rights are removed at an issue price of €4.51 per share, reserved for creditors, for an amount of €363.2 million (issue premium included). Issuing of 9,067,200 MCB (mandatory convertible bonds) in l favour of creditors for a unitary nominal value of €2 or a total of

8

171

2017 Registration Document SOLOCAL