June 28, 2022

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The Arctic incurs losses for wind turbine companies affected by the crisis of more than NOK 100 million

The Arctic incurs losses for wind turbine companies affected by the crisis of more than NOK 100 million

– No, you must have covered that for the boring’s sake. Moreover, I have no comment other than that we are very satisfied with the Arctic, although of course we did not like this write-off, says CEO Mads Severson at Arctic Securities.

books this winter DN A number of articles on brokerage house Arctic Securities and crisis-hit wind turbine company Emergy. For ten years, the real owners of the company were hidden behind a brokerage account with Arctic.

However, DN can reveal that not only Trond Mohn and Tor Axel Fuldberg He was a major shareholder in the company. brokerage house It had itself exposed to NOK 130 million in stocks and bonds.

Arctic Securities answered questions while working on the issues, but CEO Mads Syversen himself has remained silent about Emergy. But after Arctic Securities’ accounts began on Pentecost, he picked up the phone.

The blogging he’s talking about is specifically in Emergy ‘s, or ERH ‘s, which the company recently changed its name to. The report states that the brokerage firm had to write the investment in the amount of NOK 107 million.

He says they based the write-down on evaluation from outside consultants and auditors who have taken a look at the company.

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We have taken a good write-off in relation to what we believe is the value of the company.

– How big is your exposure at Emergy now?

– With a combination of stocks and bonds, the amount is about 40 million Norwegian kroner, Seversen says before hanging up.

«Always take a risk in the capital market»

Emergy was already in a deep financial crisis, when the company’s suffering worsened at the end of February. The company is actually a partial owner of wind farms in Ukraine. When Russia invaded the country, Russian missiles hit a wind farm.

At the same time, Russian troops moved in and took control of the wind farm. Right before the invasion succeeds The company has to postpone the maturity of 2 billion kroner of debt securities, and raise about 400 million kronor in new cash.

In the Arctic Annual Report, the board details the brokerage investment in Emergy:

– Income and profits related to the company’s trading are adversely affected by reductions related to the company’s financial exposure to securities issued by ERH. Arctic has a longstanding client relationship with ERH AS and has helped the company and its subsidiaries raise capital on several occasions.

– ERH AS was early on through investments in renewable energy and was challenged, among other things, by geopolitical factors. There is always risk in the capital market. The Arctic Company is operating for the long term, and we helped the company, in this case we also became owners of the securities issued by the company.

In addition to investing in Emergy, it also appears in the accounts that Arctic owns shares and associated futures contracts in the wind energy company worth NOK 500 million.

Invasion of Ukraine

Although the invasion occurred after the balance sheet date, i.e. December 31, 2021, the Board believes that no events occurred that would indicate that the items in the accounts should have been valued differently.

Russia invaded Ukraine on the morning of February 24, 2022, and besides human suffering, this crisis also caused economic insecurity in Europe and to some extent in the rest of the world. The war in Ukraine has a direct impact on parts of ERH AS’s operations, the brokerage writes and adds:

– Based on the development in the energy market, among others, there are no indications that the Arctic holdings of the ERH as of 31.12.2021 had to be adjusted further.

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Increased turnover

Despite the reduction in Emergy, Arctic Group achieved better results than the previous year. The company’s sales were NOK 1,653 million last year, compared to NOK 1,429 million the previous year. Profit before tax ended at NOK 412 million, compared to NOK 333 million in 2020.

2021 was a good year for stock exchange and capital markets, with good access to venture capital. There was a high level of activity, the Arctic completed a large number of tasks and transactions. Both the company and the group can indicate further growth in missions, turnover and results, the annual report states.

Arctic writes in the annual report that the company achieved the largest growth in assignments related to mergers and acquisitions, as well as offering bond issues.

According to the annual report, the group had a secondary capital of NOK 431 million at the end of the year. This gives a capital adequacy ratio of 9.9 percent. The minimum required in the legislation is eight percent.(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.