EX-99.1 14 acas10k123114ex991.htm EXHIBIT 99.1 ACAS 10K 12.31.14 EX99.1

Exhibit 99.1
 
Consolidated Financial Statements of European Capital Limited

The accompanying consolidated financial statements of European Capital Limited, a wholly-owned portfolio company of American Capital, Ltd., are being provided pursuant to Rule 3-09 of Regulation S-X. These consolidated financial statements are as of December 31, 2014 and 2013 and for each of the three years ended December 31, 2014 and are prepared in accordance with accounting principles generally accepted in the United States.

In accordance with Rule 3-09 of Regulation S-X, only the 2013 consolidated financial statements are required to be audited under U.S. Generally Accepted Auditing Standards as 2013 was the only year in which European Capital Limited met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X. The consolidated financial statements as of and for the year ended December 31, 2012 is unaudited.









Report of Independent Auditors

To the Board of European Capital Limited
We have audited the accompanying consolidated financial statements of European Capital Limited (the “Company”), which comprise the consolidated balance sheets including the consolidated schedules of investments as of December 31, 2014 and 2013, and the related consolidated statements of operations, changes in net assets, and cash flows and the consolidated financial highlights for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements and consolidated financial highlights referred to above, present fairly, in all material respects, the consolidated financial position of European Capital Limited at December 31, 2014 and December 31, 2013 and the consolidated results of its operations, changes in its net assets and its cash flows and consolidated financial highlights, for the years then ended in conformity with U.S. generally accepted accounting principles.

Other matter
The accompanying consolidated statements of operations, changes in its net assets, its cash flows and consolidated financial highlights for year ended December 31, 2012 were not audited, reviewed, or compiled by us and, accordingly, we do not express an opinion or any other form of assurance on them.



Ernst & Young LLP
Guernsey, Channel Islands
2 March 2015




2


EUROPEAN CAPITAL LIMITED
CONSOLIDATED BALANCE SHEETS
 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
31 December
 
Notes
 
2014
 
2013
Assets
 
 
 
 
 
Investments at fair value (Cost basis of €693,266 and €1,031,190, respectively)
3
 
483,155

 
770,175

Cash and cash equivalents
 
 
262,198

 
88,812

Restricted cash and cash equivalents
 
 
27

 
13,286

Interest receivable
 
 
1,286

 
2,062

Other
 
 
4,041

 
10,215

Total assets
 
 
750,707

 
884,550

 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
Debt (maturing within one year €250 and €680, respectively)
5
 
113,952

 
107,154

Due to European Capital Asset Management Limited
 
 
1,296

 
2,377

Derivative agreements at fair value
 
 
3,003

 
1,410

Other
6
 
68,342

 
54,731

Total liabilities
 
 
186,593

 
165,672

 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
Shareholders' equity:
 
 
 
 
 
Ordinary shares (nil par value, authorised to issue unlimited number of shares, 160,994 issued and 159,443 outstanding)
8
 
224,475

 
224,475

Undistributed net realised earnings
8
 
654,109

 
835,563

Net unrealised foreign currency depreciation
 
 
(32,978
)
 
(81,069
)
Net unrealised depreciation of investments
 
 
(281,492
)
 
(260,091
)
Total shareholders' equity
 
 
564,114

 
718,878

 
 
 
 
 
 
Total liabilities and shareholders' equity
 
 
750,707

 
884,550

 
 
 
 
 
 
Net asset value per ordinary share
 
 
3.54

 
4.51



The accompanying notes form an integral part of these consolidated financial statements.





3


EUROPEAN CAPITAL LIMITED
CONSOLIDATED STATEMENT OF OPERATIONS
 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
Year Ended 31 December
 
Notes
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
(unaudited)
Operating Revenue:
 
 
 
 
 
 
 
Interest and dividend income
 
 
48,792

 
84,234

 
69,227

Fee and other income
 
 
1,275

 
917

 
723

Total operating revenue
9
 
50,067

 
85,151

 
69,950

Operating Expenses:
 
 
 
 
 
 
 
Interest
 
 
3,534

 
15,153

 
23,818

Management fee
10
 
16,341

 
21,499

 
22,695

General and administrative
 
 
1,765

 
3,949

 
2,248

Total operating expenses
 
 
21,640

 
40,601

 
48,761

Net Operating Income Before Income Taxes
 
 
28,427

 
44,550

 
21,189

Provision for income taxes
 
 
(151
)
 
(114
)
 
(50
)
Net Operating Income
 
 
28,276

 
44,436

 
21,139

 
 
 
 
 
 
 
 
Net realised foreign currency (losses) gains
 
 
(24,235
)
 
(18,901
)
 
4,815

 
 
 
 
 
 
 
 
Net realised gains (losses) on investments
 
 
89,505

 
(158,340
)
 
(6,304
)
 
 
 
 
 
 
 
 
Total Net Realised Earnings (Losses)
8
 
93,546

 
(132,805
)
 
19,650

 
 
 
 
 
 
 
 
Net foreign currency unrealised appreciation
8
 
48,091

 
20,021

 
8,989

 
 
 
 
 
 
 
 
Net unrealised (depreciation) appreciation of investments
8
 
(21,401
)
 
256,862

 
49,425

 
 
 
 
 
 
 
 
Net Increase in Net Assets Resulting from Operations
 
 
120,236

 
144,078

 
78,064


The accompanying notes form an integral part of these consolidated financial statements.





















4


EUROPEAN CAPITAL LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
Year Ended 31 December
 
Notes
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
(unaudited)
Operations:
 
 
 
 
 
 
 
Net operating income
 
 
28,276

 
44,436

 
21,139

Net foreign currency (losses) gains
 
 
(24,235
)
 
(18,901
)
 
4,815

Net realised gains (losses) on investments
 
 
89,505

 
(158,340
)
 
(6,304
)
Net foreign currency unrealised appreciation
 
 
48,091

 
20,021

 
8,989

Net unrealised (depreciation) appreciation of investments
 
 
(21,401
)
 
256,862

 
49,425

Net increase in net assets resulting from operations
 
 
120,236

 
144,078

 
78,064

 
 
 
 
 
 
 
 
Shareholder distribution
 
 
 
 
 
 
 
Distribution to Shareholders
8
 
(275,000
)
 
(130,000
)
 

Total decrease in net assets resulting from shareholder distributions
 
 
(275,000
)
 
(130,000
)
 

 
 
 
 
 
 
 
 
Total (decrease) increase in net assets
 
 
(154,764
)
 
14,078

 
78,064

 
 
 
 
 
 
 
 
Net assets at beginning of year
 
 
718,878

 
704,800

 
626,736

 
 
 
 
 
 
 
 
Net assets at end of year
 
 
564,114

 
718,878

 
704,800

 
 
 
 
 
 
 
 
Net asset value per share
 
 
3.54

 
4.51

 
4.42

 
 
 
 
 
 
 
 
Shares outstanding at end of year
 
 
159,443

 
159,443

 
159,443


The accompanying notes form an integral part of these consolidated financial statements.




































5


EUROPEAN CAPITAL LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
 
(in thousands)
 
 
 
 
 
 
 
 
 
Year Ended 31 December
 
 
2014
 
2013
 
2012
 
 
 
 
 
 
(unaudited)
Operating activities:
 
 
 
 
 
 
Net increase in net assets resulting from operations
 
120,236

 
144,078

 
78,064

Adjustment to reconcile net increase in net assets resulting
 
 
 
 
 
 
from operations to net cash used in operating activities:
 
 
 
 
 
 
Payment-in-kind interest and non-cash dividend income
 
(30,570
)
 
(52,361
)
 
(31,209
)
Accretion of deferred fee income
 
(748
)
 
(3,417
)
 
(813
)
Amortisation of deferred financing costs
 
120

 
2,977

 
1,188

Foreign exchange movements
 
(23,856
)
 
(1,120
)
 
(13,804
)
Net realised (gains) losses on investments
 
(89,505
)
 
158,340

 
6,304

Net depreciation (appreciation) of investments
 
21,401

 
(256,862
)
 
(49,425
)
(Decrease) increase in payables due to affiliates, net
 
(244
)
 
168

 
795

Decrease in interest receivable
 
3,433

 
5,870

 
5,314

(Decrease) increase in interest payable
 
(441
)
 
(10,323
)
 
3,574

Decrease (increase) in other assets
 
1,599

 
(2,255
)
 
(592
)
(Decrease) increase in other liabilities
 
(270
)
 
346

 
(2,559
)
Net cash provided by (used in) operating activities
 
1,155

 
(14,559
)
 
(3,163
)
 
 
 
 
 
 
 
Investing activities:
 
 
 
 
 
 
Purchases of investments
 
(128,932
)
 
(81,183
)
 
(126,521
)
Principal repayments
 
177,457

 
291,964

 
68,872

Collection of payment-in-kind interest and dividends
 
152,369

 
108,945

 
9,440

Proceeds from loan syndications and loan sales
 
19,922

 
113,752

 
1,809

Proceeds from sale of equity instruments
 
225,033

 
67,241

 
2,050

Payments on derivative contracts, net
 

 
(17,655
)
 
(6,973
)
Net cash provided by (used in) investing activities
 
445,849

 
483,064

 
(51,323
)
 
 
 
 
 
 
 
Financing activities:
 
 
 
 
 
 
Repayment of secured senior debt (Senior Secured Floating Rate Notes), net
 

 
(251,285
)
 
(21,522
)
(Repayments of) draws on unsecured revolving credit facility with affiliate, net
 

 
(72,555
)
 
23,188

Decrease in debt service escrows
 
13,259

 
72,425

 
53,120

Distributions paid
 
(275,000
)
 
(130,000
)
 

Redemption of preferred share capital
 
(17,222
)
 
(1,372
)
 
(305
)
Net cash (used in) provided by financing activities
 
(278,963
)
 
(382,787
)
 
54,481

 
 
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
168,041

 
85,718

 
(5
)
Foreign exchange movements in cash and cash equivalents
 
5,344

 
521

 
(225
)
Cash and cash equivalents at beginning of period
 
88,812

 
2,573

 
2,803

Cash and cash equivalents at end of period
 
262,198

 
88,812

 
2,573

Supplemental Disclosures:
 
 
 
 
 
 
Cash paid for interest
 
3,855

 
22,499

 
19,055

Cash paid for taxes
 
141

 
83

 
166


The accompanying notes form an integral part of these consolidated financial statements.


6


EUROPEAN CAPITAL LIMITED
CONSOLIDATED FINANCIAL HIGHLIGHTS
 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
Year Ended 31 December
 
 
2014
 
2013
 
2012
 
 
 
 
 
 
(unaudited)
Per Share Data (1):
 
 
 
 
 
 
Net asset value at beginning of period
 
4.51

 
4.42

 
3.93

 
 
 
 
 
 
 
Net operating income
 
0.18

 
0.28

 
0.13

Net foreign currency (losses) gains
 
(0.15
)
 
(0.12
)
 
0.03

Net realised gains (losses) on investments
 
0.56

 
(0.99
)
 
(0.04
)
Net foreign currency unrealised appreciation
 
0.30

 
0.13

 
0.06

Net unrealised (depreciation) appreciation of investments
 
(0.13
)
 
1.61

 
0.31

Total increase in net assets resulting from operations
 
0.75

 
0.91

 
0.49

Distribution to Shareholders
 
(1.72
)
 
(0.82
)
 

Net asset value at end of period
 
3.54

 
4.51

 
4.42

 
 
 
 
 
 
 
Ratios/Supplemental Data:
 
 
 
 
 
 
Total return (constant investment) (2)
 
12.5
%
 
17.6
%
 
10.5
%
Shares outstanding at end of period
 
159,443

 
159,443

 
159,443

Weighted average number of shares
 
159,443

 
159,443

 
159,443

Net assets at end of period
 
564,114

 
718,878

 
704,800

Average net assets (3)
 
649,601

 
749,623

 
661,141

Average debt outstanding (4)
 
109,553

 
289,663

 
450,519

Average debt per share
 
0.69

 
1.82

 
2.83

 
 
 
 
 
 
 
Net Asset Ratios excluding waived incentive fee
 
 
 
 
 
 
Ratio of operating expenses, net of interest expense, to average net assets
 
2.79
%
 
3.39
%
 
3.77
%
Ratio of interest expense to average net assets
 
0.54
%
 
2.02
%
 
3.60
%
Ratio of operating expenses to average net assets
 
3.33
%
 
5.42
%
 
7.38
%
Ratio of net operating income to average net assets
 
4.35
%
 
5.93
%
 
3.2
%
 
 
 
 
 
 
 
Net Asset Ratios including waived incentive fee
 
 
 
 
 
 
Ratio of operating expenses, net of interest expense, to average net assets
 
6.49
%
 
7.24
%
 
6.13
%
Ratio of operating expenses to average net assets
 
7.03
%
 
9.26
%
 
9.74
%
Ratio of net operating income to average net assets
 
0.65
%
 
2.08
%
 
0.84
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Basic weighted average per share data.
(2) Total return (constant investment) is based on the product of returns calculated on constant invested capital and geometrically linked based on capital cash flow dates.
(3) Average net assets are calculated based on a quarterly basis.
(4) Average debt outstanding is calculated on a daily basis.

The accompanying notes form an integral part of these consolidated financial statements.



7


EUROPEAN CAPITAL LIMITED
CONSOLIDATED SCHEDULE OF INVESTMENTS
31 December 2014
(audited)
(in thousands, except per share data)
 
 
 Country of
 
 
 
 
 
Shares/
 
Principal/notional(2)
 
Cost (2)

 
Fair value (2)

 Company (1)
 
incorporation
 
 Industry
 
 Investments
 
Warrants
 

 

 

Ares European III B.V.
 
 
 Diversified Financial Services
 
 Subordinated Notes
 
 
 
5,000

 
2,823

 
2,867

Bellotto Holdings Limited (Hillarys Blinds)
 
UK
 
 Household Durables
 
 Preferred Stock (3)
 
 
 
1,683

 
1,683

 
1,683

 
 
 
 
 
 
 Preferred Stock (3)
 
7,300,610

 
 
 
26,796

 
28,366

 
 
 
 
 
 
 Common Stock (4)
 
2,697,010

 
 
 
82,270

 
85,263

 
 
 
 
 
 
 
 
 
 
 
 
110,748

 
115,312

Blue Topco GmbH (Euro Druckservice)
 
Germany
 
 Commercial Services & Supplies
 
 Senior Debt
 
 
 
2,189

 
1,730

 
1,751

 
 
 
 
 
 
 Subordinated Debt (5)
 
 
 
7,066

 
6,262

 
2,150

 
 
 
 
 
 
 
 
 
 
 
 
7,993

 
3,901

Cordatus CLO II plc (CVC Cordatus CLO II)
 
 
 Diversified Financial Services
 
 Subordinated Notes
 
 
 
5,000

 
1,791

 
4,978

Delsey Holdings S.A.S.
 
France
 
 Textiles, Apparel & Luxury Goods
 
 Senior Debt
 
 
 
73,582

 
73,582

 
69,295

 
 
 
 
 
 
 Subordinated Debt (5)
 
 
 
10,012

 
8,583

 
1,946

 
 
 
 
 
 
 
 
 
 
 
 
82,165

 
71,241

Eaton Vance CDO X plc
 
 
 Diversified Financial Services
 
 Subordinated Notes
 
 
 
7,000

 
1,176

 
4,320

Euro-Galaxy II CLO B.V. (AIG Global Investment Corp Limited)
 
 
 
 Diversified Financial Services
 
 Income Notes
 
 
 
2,483

 
2,266

 
2,321

 
 
 
 
 
 
 Subordinated Notes
 
 
 
5,500

 
2,688

 
4,131

 
 
 
 
 
 
 
 
 
 
 
 
4,955

 
6,452

European Capital UK SME Debt LP
 
UK
 
 Diversified Financial Services
 
 Partnership Interest
 
500

 
 
 
454

 
454

Financière H S.A.S. (Audika)
 
France
 
 Health Care Equipment & Supplies.
 
 Subordinated Debt (5)
 
 
 
12,316

 
7,965

 
7,819

 
 
 
 
 
 
 Convertible Bonds (4)
 
930,558

 
 
 
47,816

 

 
 
 
 
 
 
 
 
 
 
 
 
55,781

 
7,819

Financière Newglass S.A.S. (Devglass)
 
France
 
 Building Products
 
 Convertible Bonds (4)
 
1

 
 
 
21,470

 
21,470

 
 
 
 
 
 
 Common Stock (4)
 
8,000,000

 
 
 
8,000

 
5,121

 
 
 
 
 
 
 
 
 
 
 
 
29,470

 
26,591

Financière OFIC S.A.S. (Onduline)
 
France
 
 Building Products
 
 Warrants (4)
 
1,574,600

 
 
 

 
2,290

Financière Poult S.A.S. (Poult)
 
France
 
 Food Products
 
 Subordinated Debt
 
 
 
13,358

 
13,358

 
13,054

 
 
 
 
 
 
 Warrants (4)
 
670,150

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
13,358

 
13,054

Financière Riskeco S.A.S. (Risk & Co)
 
France
 
 Diversified Consumer Services
 
 Senior Debt
 
 
 
11,604

 
11,604

 
11,305

 
 
 
 
 
 
 Warrants (4)
 
702,650

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
11,604

 
11,305

Financière Tarmac S.A.S. (Batisanté)
 
France
 
 Commercial Services & Supplies
 
 Senior Debt
 
 
 
4,136

 
3,329

 
4,171

 
 
 
 
 
 
 Subordinated Debt (5)
 
 
 
41,912

 
32,332

 
32,332

 
 
 
 
 
 
 Convertible Bonds (4)
 
8,665,001

 
 
 
8,647

 

 
 
 
 
 
 
 Preferred Stock (3)(4)
 
 
 
3,023

 
6,660

 

 
 
 
 
 
 
 Warrants (4)
 
1

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
50,968

 
36,503

Groupe INSEEC
 
 France
 
 Education Services
 
 Senior Debt
 
 
 
38,734

 
38,734

 
37,669

 
 
 
 
 
 
 Warrants (4)
 
655,650

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
38,734

 
37,669

Hilding Anders AB
 
Sweden
 
 Household Durables
 
 Subordinated Debt (5)
 
 
 
29,819

 
14,609

 

Holding Saint Augustine S.A.S. (Soflog)
 
France
 
 Air Freight & Logistics
 
 Senior Debt
 
 
 
4,000

 
4,000

 
4,000

 
 
 
 
 
 
 Convertible Bonds (4)
 
1,982,668

 
 
 
12,350

 

 
 
 
 
 
 
 Preferred Stock (3) (4)
 
1

 
 
 

 
884

 
 
 
 
 
 
 
 
 
 
 
 
16,350

 
4,884

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8


EUROPEAN CAPITAL LIMITED
CONSOLIDATED SCHEDULE OF INVESTMENTS
31 December 2014
(audited)
(in thousands, except per share data)
 
 
 Country of
 
 
 
 
 
Shares/
 
Principal/notional(2)
 
Cost (2)

 
Fair value (2)

 Company (1)
 
incorporation
 
 Industry
 
 Investments
 
Warrants
 

 

 

Legendre Holding 31 S.A. (Asmodee)
 
France
 
 Leisure Products
 
 Senior Debt
 
 
 
56,250

 
56,250

 
53,490

 
 
 
 
 
 
 Common Stock (4)
 
51,975,983

 
 
 
5,198

 
5,198

 
 
 
 
 
 
 Warrants (4)
 
21,153,420

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
61,448

 
58,688

Miles 33 Limited
 
UK
 
 Media
 
 Senior Debt
 
 
 
6,773

 
6,773

 
6,773

 
 
 
 
 
 
 Subordinated Debt
 
 
 
13,762

 
13,762

 
13,762

 
 
 
 
 
 
 Preferred Stock (3)(4)
 
 
 
59,135

 
24,921

 
7,078

 
 
 
 
 
 
 Common Stock (4)
 
600,000

 
 
 
767

 

 
 
 
 
 
 
 
 
 
 
 
 
46,223

 
27,613

Mobipark S.A.S. (Parkeon)
 
France
 
 Machinery
 
 Senior Debt
 
 
 
2,005

 
1,941

 
1,828

 
 
 
 
 
 
 Convertible Bonds (4)
 
23,082,525

 
 
 
7,669

 
1,419

 
 
 
 
 
 
 Preferred Stock (3)(4)
 
25,751,312

 
 
 
6,505

 
3,632

 
 
 
 
 
 
 
 
 
 
 
 
16,115

 
6,879

Modacin France S.A.S. (Camaieu)
 
France
 
 Textiles, Apparel & Luxury Goods
 
 Subordinated Debt (5)
 
 
 
19,072

 
10,338

 

MP Equity S.A.S. (Marco Polo Foods)
 
France
 
 Food Products
 
 Preferred Stock (3)(4)
 
20,700

 
 
 
2

 

 
 
 
 
 
 
 Preferred Stock (3)(4)
 
 
 
2,190

 
2,068

 

 
 
 
 
 
 
 Common Stock (4)
 
1,663,526

 
 
 

 

 
 
 
 
 
 
 Warrants (4)
 
137,862

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
2,070

 

Parts Holding Coörperatief U.A
 
France
 
 Auto Components
 
 Common Stock (4)
 
568,624

 
 
 

 
4,469

Skrubbe Vermogensverwaltungsgesellschaft mbH (Sausalitos)
 
Germany
 
 Hotels, Restaurants & Leisure
 
 Senior Debt
 
 
 
10,140

 
10,140

 
9,931

 
 
 
 
 
 
 Warrants (4)
 
1

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
10,140

 
9,931

The Flexitallic Group S.A.S.
 
France
 
 Energy Equipment & Services
 
 Senior Debt
 
 
 
21,842

 
21,842

 
21,611

 
 
 
 
 
 
 Warrants (4)
 
519,523

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
21,842

 
21,611

Tiama 2 S.A.S.
 
France
 
 Machinery
 
 Subordinated Debt (5)
 
 
 
41,193

 
23,079

 

Unipex Neptune International SAS
 
France
 
 Chemical
 
 Subordinated Debt
 
 
 
4,370

 
4,370

 
4,323

 
 
 
 
 
 
 Warrants (4)
 
64,000

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
4,370

 
4,323

Zodiac Marine and Pool S.A. (Zenith)
 
France
 
 Marine
 
 Senior Debt (5)
 
 
 
31,222

 
22,707

 

 
 
 
 
 
 
 Subordinated Debt (5)
 
 
 
57,543

 
31,955

 

 
 
 
 
 
 
 
 
 
 
 
 
54,662

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
693,266

 
483,155

(1) Certain of the securities are issued by affiliate(s) of the portfolio company listed.
(2) Principal represents the original principal of an investment plus any compounded PIK translated, where relevant, at the exchange rate ruling at the balance sheet date. Cost represents the cost of investments at historical exchange rates when the investment is denominated in currencies other than the euro. Fair value is the market value of the investment translated where relevant, at the exchange rate ruling at the balance sheet date. The difference between fair value and cost in the above table is a combination of the amounts shown as appreciation (depreciation) and foreign currency appreciation (depreciation) in consolidated statement of operations.
(3) Preferred Stock includes loan stock which carries a PIK-only component and on occasion has conversion rights.
(4) Common stock and warrants are non-income producing. Preference stocks that are on non-accrual.
(5) Debt security is on non-accrual status and therefore considered non-income producing.


9


EUROPEAN CAPITAL LIMITED
CONSOLIDATED SCHEDULE OF INVESTMENTS
31 December 2013
(audited)
(in thousands, except per share data)
 
 
 Country of
 
 
 
 
 
Shares/
 
Principal/notional(2)
 
Cost (2)

 
Fair value (2)

 Company (1)
 
incorporation
 
 Industry
 
 Investments
 
Warrants
 

 

 

Ares European III B.V.
 
 
 Diversified Financial Services
 
 Subordinated Notes
 
 
 
5,000

 
3,892

 
3,267

Bellotto Holdings Limited (Hillarys Blinds)
 
UK
 
 Household Durables
 
 Preferred Stock (3)
 
 
 
21,149

 
20,301

 
21,158

 
 
 
 
 
 
 Preferred Stock (3)
 
5,384,889

 
 
 
15,168

 
16,133

 
 
 
 
 
 
 Common Stock (4)
 
1,470,791

 
 
 
73,563

 
16,335

 
 
 
 
 
 
 
 
 
 
 
 
109,032

 
53,626

Blue Topco GmbH (Euro Druckservice)
 
Germany
 
 Commercial Services & Supplies
 
 Senior Debt
 
 
 
2,302

 
1,596

 
1,729

 
 
 
 
 
 
 Subordinated Debt (5)
 
 
 
6,810

 
6,164

 
1,892

 
 
 
 
 
 
 Preferred Stock (3)(4)
 
 
 
61

 
37

 

 
 
 
 
 
 
 Common Stock (4)
 
2,432,750

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
7,797

 
3,621

Cordatus CLO II plc (CVC Cordatus CLO II)
 
 
 Diversified Financial Services
 
 Subordinated Notes
 
 
 
5,000

 
2,463

 
2,185

DC Green Beteiligungs GmbH (DruckChemie)
 
Germany
 
 Household Products
 
 Subordinated Debt (5)
 
 
 
36,840

 
25,000

 

 
 
 
 
 
 
 Warrants (4)
 
250,000

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
25,000

 

Delsey Holdings S.A.S.
 
France
 
 Textiles, Apparel & Luxury Goods
 
 Senior Debt
 
 
 
70,795

 
72,480

 
69,134

 
 
 
 
 
 
 Subordinated Debt
 
 
 
8,583

 
9,008

 
6,402

 
 
 
 
 
 
 
 
 
 
 
 
81,488

 
75,536

Eaton Vance CDO X plc
 
 
 Diversified Financial Services
 
 Subordinated Notes
 
 
 
7,000

 
2,124

 
4,662

Emperor Bidco Limited (Bestinvest)
 
UK
 
 Diversified Financial Services
 
 Subordinated Debt
 
 
 
24,454

 
23,373

 
24,943

 
 
 
 
 
 
 Preferred Stock (3)(4)
 
 
 
6,013

 
2,766

 
1,897

 
 
 
 
 
 
 Common Stock (4)
 
15,052

 
 
 
20

 

 
 
 
 
 
 
 
 
 
 
 
 
26,159

 
26,840

Euro-Galaxy II CLO B.V. (AIG Global Investment Corp Limited)
 
 
 Diversified Financial Services
 
 Income Notes
 
 
 
3,204

 
2,982

 
3,036

 
 
 
 
 
 
 Subordinated Notes
 
 
 
5,500

 
3,322

 
3,396

 
 
 
 
 
 
 
 
 
 
 
 
6,304

 
6,432

Fat Face World Borrowings Limited
 
UK
 
 Textiles, Apparel & Luxury Goods
 
 Senior Debt
 
 
 
29,357

 
34,529

 
26,390

FB Raphael 1 Limited (Farrow & Ball)
 
UK
 
 Household Products
 
 Preferred Stock (3)
 
 
 
105,256

 
118,647

 
105,256

 
 
 
 
 
 
 Common Stock (4)
 
68,125

 
 
 
65

 
98,913

 
 
 
 
 
 
 Warrants (4)
 
4,058

 
 
 

 
5,934

 
 
 
 
 
 
 
 
 
 
 
 
118,712

 
210,103

Financière H S.A.S. (Audika)
 
France
 
 Health Care Equipment & Supplies.
 
 Subordinated Debt (5)
 
 
 
11,084

 
7,965

 
8,285

 
 
 
 
 
 
 Convertible Bonds (4)
 
930,558

 
 
 
47,816

 

 
 
 
 
 
 
 
 
 
 
 
 
55,781

 
8,285

Financière Newglass S.A.S. (Devglass)
 
France
 
 Building Products
 
 Subordinated Debt
 
 
 
7,636

 
8,183

 
8,183

 
 
 
 
 
 
 Convertible Bonds
 
1

 
 
 
23,091

 
23,091

 
 
 
 
 
 
 Common Stock (4)
 
8,000,000

 
 
 
8,000

 
7,462

 
 
 
 
 
 
 
 
 
 
 
 
39,274

 
38,736

Financière OFIC S.A.S. (Onduline)
 
France
 
 Building Products
 
 Warrants (4)
 
1,574,600

 
 
 

 
11,923

Financière Robin S.A.S. (Sud Robinetterie)
 
 France
 
 Oil, Gas & Consumable Fuels
 
 Subordinated Debt
 
 
 
48,034

 
50,706

 
49,511

 
 
 
 
 
 
 Warrants (4)
 
2,167,300

 
 
 

 
75

 
 
 
 
 
 
 
 
 
 
 
 
50,706

 
49,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10


EUROPEAN CAPITAL LIMITED
CONSOLIDATED SCHEDULE OF INVESTMENTS
31 December 2013
(audited)
(in thousands, except per share data)
 
 
 Country of
 
 
 
 
 
Shares/
 
Principal/notional(2)
 
Cost (2)

 
Fair value (2)

 Company (1)
 
incorporation
 
 Industry
 
 Investments
 
Warrants
 

 

 

Financière Tarmac S.A.S. (Batisanté)
 
France
 
 Commercial Services & Supplies
 
 Senior Debt
 
 
 
4,763

 
3,711

 
4,763

 
 
 
 
 
 
 Subordinated Debt (5)
 
 
 
39,654

 
31,366

 
23,190

 
 
 
 
 
 
 Convertible Bonds (4)
 
8,665,001

 
 
 
8,647

 

 
 
 
 
 
 
 Preferred Stock (3)(4)
 
 
 
2,854

 
6,660

 

 
 
 
 
 
 
 Warrants (4)
 
1

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
50,384

 
27,953

Finartex S.A.S. (Vivarte )
 
France
 
 Specialty Retail
 
 Senior Debt
 
 
 
8,000

 
8,000

 
5,529

Groupe INSEEC
 
 France
 
 Education Services
 
 Senior Debt
 
 
 
37,500

 
37,591

 
37,591

 
 
 
 
 
 
 Warrants (4)
 
656,650

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
37,591

 
37,591

Hilding Anders AB
 
Sweden
 
 Household Durables
 
 Subordinated Debt (5)
 
 
 
26,226

 
14,609

 

HoGi Beteiligungs GmbH (Hofmann)
 
Germany
 
 Food Products
 
 Subordinated Debt
 
 
 
44,559

 
45,164

 
45,136

 
 
 
 
 
 
 Preferred Stock (3)
 
 
 
1,715

 
2,753

 
2,725

 
 
 
 
 
 
 Preferred Stock (3)
 
3,246,750

 
 
 
3,247

 
5,142

 
 
 
 
 
 
 Common Stock (4)
 
59,650

 
 
 
60

 
6,173

 
 
 
 
 
 
 
 
 
 
 
 
51,224

 
59,176

Holding Saint Augustine S.A.S. (Soflog)
 
France
 
 Air Freight & Logistics
 
 Senior Debt
 
 
 
4,000

 
4,000

 
4,000

 
 
 
 
 
 
 Convertible Bonds (4)
 
1,982,668

 
 
 
12,350

 

 
 
 
 
 
 
 Preferred Stock (3) (4)
 
1

 
 
 

 
137

 
 
 
 
 
 
 
 
 
 
 
 
16,350

 
4,137

Mail Acquisitions Holdings Limited (DX Services)
 
UK
 
 Commercial Services & Supplies
 
 Senior Debt
 
 
 
13,174

 
16,231

 
7,146

 
 
 
 
 
 
 Common Stock (4)
 
5,231

 
 
 
43,191

 
8,893

 
 
 
 
 
 
 
 
 
 
 
 
59,422

 
16,039

Miles 33 Limited
 
UK
 
 Media
 
 Senior Debt
 
 
 
9,042

 
9,558

 
9,042

 
 
 
 
 
 
 Subordinated Debt
 
 
 
12,083

 
13,371

 
12,275

 
 
 
 
 
 
 Preferred Stock (3)(4)
 
 
 
47,933

 
28,859

 
10,632