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  "documentTitle": "Vivion Investments S.à.r.l.",
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  "notes": "The slide uses a calculation table to demonstrate that shareholder loans are being repaid, contradicting S&P's view that they are permanent equity.",
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      "text": "When adding up the periodic net reductions (-€44.7 million + -€156.7 million + -109.7 million), Vivion’s controlling shareholders have been repaid at least €311.1 million (which as we show below is low).",
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      "text": "Shareholder loan repayments: €311.1 million",
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      "text": "Another method shows that repayments have been at least €360.1 million. (Due to the effects of netting, the actual amount could still be significantly higher.) This method involves finding the highest end of period Shareholder Loan balance, and then comparing it to the lowest subsequent Shareholder Loan balance, then taking into account accrued interest (from the cash flow statement) during the time period and any periodic net repayments from outside that time period.",
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      "text": "When adding up the periodic net reductions (-€44.7 million + -€156.7 million + -109.7 million), Vivion’s controlling shareholders have been repaid at least €311.1 million (which as we show below is low).",
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      "text": "Deriving these amounts requires subtracting Proceeds (repayment) from Shareholder Loans for the first half from the December 31st year-end totals. The table below shows this method:",
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      "kind": "paragraph",
      "text": "S&P then went on to reach what we think is exactly the wrong conclusion",
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      "text": "Whether the H2 net repayments are intended to obscure the net repayment activity is unknowable. S&P seemed to view the easily visible H1 2021 net repayment as a one-off. In its October 15, 2021 report, it wrote (emphasis added):",
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      "text": "We treat Vivion’s €1.3 billion of shareholder loans as of June 30, 2021 as equity... We understand that this was an extraordinary and voluntary dividend-like payment in the context of substantial liquidity after the disposals in 2021...",
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      "text": "The nominal amount of the shareholder instruments has increased progressively – from €0.9 billion at the end of 2018 to €1.3 billion at the end of 2020 – showing the company’s commitment to the permanence of these instruments in the capital structure.",
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      "text": "We treat Vivion’s €1.3 billion of shareholder loans as of June 30, 2021 as equity, given the strong equity components in the documentation. These include deep subordination to other instruments in the capital structure, long maturities beyond any of Vivion’s outstanding interest-bearing debt, and Vivion’s option to convert the loans into common equity at its sole discretion. We understand that this was an extraordinary and voluntary dividend-like payment in the context of substantial liquidity after the disposals in 2021... — S&P",
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      "text": "2 https://vivion.eu/wp-content/uploads/2021/10/RatingsDirect_VivionInvestmentsSarl_49673574_Oct-25-2021.pdf",
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      "text": "2019 30-Jun (reported) 79.0; 31-Dec (reported) 34.3; 2H Net (calculated) -44.7; 2020 30-Jun (reported) 221.6; 31-Dec (reported) 64.9; 2H Net (calculated) -156.7; 2021 30-Jun (reported) -109.7; 31-Dec (reported) -107.8; 2H Net (calculated) 1.9",
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