No combinations or disposals took place in 2009.
On 7 May 2010 PROASEGO Windpark Prettin Drei GmbH & Co. KG was acquired in full for CHF 18 million and on 28 May 2010 the WKN Windkraftwerk Nord GmbH & Co. Windpark Lübbenau KG was acquired in full for CHF 44 million. Expansion of own wind-power generation capacity is one of the Repower Group's strategic targets. The wind farms have an installed capacity of 10 MW and 16 MW respectively, and both are located in Germany. Considered individually, these business combinations are insignificant. They are therefore described here in aggregate.
The revenue and income earned by the two wind farms since their acquisition by Repower totals TCHF 3,207 and TCHF -913 respectively. Third-party costs arising in connection with these transactions come to TCHF 268 and are recognised in other operating expenses.
The acquisition costs and the fair value of the identifiable assets and liabilities on the date of acquisition are summarised below:
| CHF thousands | Fair value |
|---|---|
| Cash consideration | 61,762 |
| Deferred consideration | 440 |
| Acquisition costs | 62,202 |
| Acquired assets and liabilities: | |
| Fixed assets | 63,098 |
| Deferred tax assets | 48 |
| Receivables | 3,106 |
| Pre – paid expenses and accrued income | 1,215 |
| Liquid assets | 450 |
| Identifiable assets | 67,917 |
| Non – current provisions | 3,522 |
| Deferred tax liabilities | 644 |
| Current income tax liabilities | 143 |
| Other current liabilities | 2,034 |
| Deferred income and accrued expenses | 10 |
| Identifiable liabilities | 6,353 |
| Net assets acquired | 61,564 |
| Goodwill | 638 |
| Acquisition costs | 62,202 |
| Cash flow interrelated to the aquisition | |
| Aquired liquid assets | 450 |
| Cash consideration | -61,762 |
| Net cash outflow related to the acquisitions | -61,312 |
The acquisition costs include a deferred purchase price balance of TCHF 440, which will be paid in the next two years subject to the vendor's adherence to guarantee commitments. An asset value for compensation payments of TCHF 440 was estimated for the right of retaining the deferred purchase price. The provisions position includes contingent liabilities with a fair value of TCHF 787 for contract risks. The goodwill of TCHF 638 is related to expected synergies from the integration of the wind farms into the Repower Group. It is allocated entirely to Repower Wind Prettin GmbH and Repower Wind Lübbenau GmbH as cash generating units for the purpose of reviewing them for impairments.
At year-end the deferred purchase price balance and the fair value of the contingent liability totalled TCHF 388 and TCHF 694 respectively. Goodwill decreased to TCHF 562 for currency reasons.
On 19 November 2010 Repower AG acquired 80 % of the shares and thus control of Elcomex EN SRL, Bucharest. Based on a fixed price formula, the remaining shares in the company will be transferred on 30 June 2015. The commercial opportunities and risks associated with the remaining shares have already been transferred to Repower AG. Minority shares (non-controlling interests) are not to be recognised. The company will be fully incorporated into the consolidated financial statements. Romania, alongside Switzerland, Italy and Germany, ranks among Repower's defined key markets. Elcomex EN SRL mainly supplies electricity to small and medium-sized enterprises that have a yearly demand of 0.5 to 20 GWh of electricity. The company merger is illustrated below.
The revenue and income earned by Repower since the acquisition totals TCHF 18,839 and TCHF -37 respectively. Third-party costs arising in connection with this transaction come to TCHF 450 and are recognised in other operating expenses.
| CHF thousands | Fair value |
|---|---|
| Cash consideration | 21,006 |
| Deferred consideration | 14,888 |
| Acquisition costs | 35,894 |
| Acquired assets and liabilities: | |
| Intangible assets | 12,135 |
| Fixed assets | 152 |
| Financial asstes | 11 |
| Deferred tax assets | 92 |
| Inventories | 1 |
| Receivables | 14,761 |
| Pre – paid expenses and accrued income | 3,361 |
| Liquid assets | 6,775 |
| Identifiable assets | 37,288 |
| Deferred tax liabilities | 1,940 |
| Other current liabilities | 10,990 |
| Current financial liabilities | 7,957 |
| Identifiable liabilities | 20,887 |
| Net assets acquired | 16,401 |
| Goodwill | 19,493 |
| Acquisition costs | 35,894 |
| Cash flow interrelated to the aquisition | |
| -7,957 | |
| Aquired liquid assets | 6,775 |
| Cash consideration | -21,006 |
| Net cash outflow related to the acquisitions | -22,188 |
The acquisition costs include a deferred, contingent purchase price, determined using an EBITDA-multiple price formula for the years 2010 to 2014. The lower limit of the non-discounted payments is TCHF 0. There is no higher limit to the price formula. The fair value on the acquisition date is TCHF 14,888, and is based on the company's probability-weighted business plan values discounted at 7.5 %. The receivables valued at fair values of CHF 14,761 consist of the gross value of the contractually-due receivables (TCHF 15,330) and a del credere for items considered uncollectable bad debts (TCHF 569). Goodwill related to the acquisition mainly reflects the value of expected buyer-specific synergies and the workforce taken over. For the purpose of impairment testing it is assigned in full to Elcomex EN S.r.l. as a cash-generating unit. The valuation of the deferred contingent purchase price is unchanged apart from exchange rate fluctuations and on the reporting date totalled TCHF 13,791. Due to the depreciation of the EUR, capitalised goodwill amounted to TCHF 18,249 at year-end.
If the wind farm and the Romanian company had been acquired on 1 January of this financial year, Repower's consolidated net revenue in 2010 would have been TCHF 2,303,283 and its consolidated income including minority interests TCHF 82,286.
The disposal of all the shares in aurax electro ag and in TGK Skavica S.r.l. had the following effect on the assets and liabilities of the Repower Group.
| aurax electro ag | TGK Skavica S.r.l. | Total | |
|---|---|---|---|
| Property, plant and equipment | 500 | 3,700 | 4,200 |
| Deffered tax assets | 63 | 23 | 86 |
| Inventories | 335 | - | 335 |
| Receivables | 1,245 | 314 | 1,559 |
| Cash and equivalents | 1,484 | 44 | 1,528 |
| Cumulative translation adjustment | - | 243 | 243 |
| Minority interest | -59 | -1,079 | -1,138 |
| Non – current provisions | -818 | - | -818 |
| Deffered tax liabilities | - | -1,217 | -1,217 |
| Current income tax liabilities | -105 | - | -105 |
| Current financial liabilities | -45 | - | -45 |
| Other current liabilities | -508 | -25 | -533 |
| Deffered income and accrued expenses | -265 | - | -265 |
| Gain/loss | 2,499 | -2,003 | 496 |
| Selling price | 4,326 | 4,326 | |
| Cash consideration received | 4,326 | - | 4,326 |
| Outflow of cash and cash equivalents | -1,484 | -44 | -1,528 |
| Net cash inflow related to the disposal | 2,842 | -44 | 2,798 |
The pre-tax gains and losses from the disposal of the two group companies are recognised in other operating income and other operating expenses.
In the current financial year, the office in Ljubljana was closed and the corresponding legal entity RE Energija d.o.o, Ljubljana dissolved.
During the first half of 2010, the Group acquired the remaining 33 % of the shares in Energia Sud S.r.l for the total price of TCHF 428; at the time of the purchase, these minority interests were worth TCHF 651. The difference was written to retained earnings. Repower therefore now owns 100 % of Energia Sud S.r.l. In addition, a stake of around 1 % in SWIBI AG was sold.