APC 2003 Annual Report Download - page 83

8.2 - Acquisition of Clipsal
On December 22, 2003, Schneider Electric finalized
the creation of a 50-50 joint venture with Singapore-
based Clipsal Industries (Holding) Ltd, since
renamed CIH Ltd. The joint venture, Clipsal Asia
Holdings Limited, manufactures and markets ultra
terminal electrical distribution products. In a separate
transaction, the Group signed an agreement with CIH
Ltd. and the Gerard family to acquire Gerard Industry
Pty Ltd.’s ultra terminal business in Australia, New
Zealand, India and South Africa.
Gerard Industries Pty. Ltd.’s ultra terminal business
was acquired for an enterprise value of AUD750 mil-
lion (€ 444 million), of which € 185 million for Clipsal
Australia shares and € 259 million in assumed debt.
The agreement guaranteed a net asset value of
AUD211.2 million (€125.7 million) at December 31,
2003. The company was fully consolidated on
January 1, 2004.
CIH Ltd. contributed all of its ultra terminal products
and systems operations in Asia to the 50-50 Clipsal
Asia Holdings Limited joint venture, while Schneider
Electric contributed PDL E Ltd. in Singapore and
SEDD en China.
The agreement guaranteed a net value at December
31, 2003 of USD 83.4 million for the assets contribut-
ed by CIH Ltd. and USD12.5 million for the assets
contributed by Schneider Electric.
These two transactions were paid for in cash and
were partially financed by the sale of Schneider
Electric’s 18.7% stake in CIH Ltd.
Complete financial data for the two units at December
31, 2003 is not currently available.
Pro forma data is as follows:
Clipsal Australia Clipsal Asia
Ultra Terminal Holding
business Ltd. *
June 30, 2002 Dec.31, 2002
(12 months) (12 months)
Sales 240.0 105.8
Operating income 29.5 5.4
Operating margin 12.3 % 5.1 %
Net income N/A 2.8
* Does not include contribution of PDL E Ltd and SEDD
Exchange rates used:
Clipsal Australia’s financial statements are prepared
in Australian dollars:
- Average rate for 2002: AUD1 = €0.575000
- Rate on Dec. 31, 2003: AUD1 = €0.595000
Clipsal Asia Holding’s financial statements are
prepared in Singapore dollars:
- Average rate for 2002: SGD1 = €0.591000
- Rate on Dec. 31, 2003: SGD1 = €0.466000
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8.3 - Other investments
( € millions) At December 31, 2003 2002
Cost Reserves Net Net
Loan to Clipsal Australia (1) 259.2 259.2
Vendor loan to buyer of Legrand shares (2) 158.8 158.8 150.5
MGE Finances convertible bonds 71.6 71.6 68.2
Restricted cash (1) 32.2 32.2 -
Advances to non-consolidated companies and
other long-term loans 31.4 (0.9) 30.5 12.9
Other 35.7 (2.6) 33.1 12.9
Other investments 588.9 (3.5) 585.4 244.5
(1) At the time of acquisition of Clipsal, Schneider Electric Australia Holding assumed the € 259 million worth of debt of the Australian
companies. When these companies are consolidated in 2004, the assumed debt will be classified as intercompany financing.
The acquisition agreement includes a clause providing for the payment of part of the price in 2007, provided that certain conditions have
been fulfilled. The related funds, in the amount of
€ 32 million, were held in an escrow account in the Group’s name at December 31, 2003.
(2) € 150 million vendor loan paying interest at 5.5%. The interest is capitalized and the proceeds from any sales of Legrand shares held by
the investor will be used to repay the loan, which has been granted for a maximum period of 13 years.