A Belgian outdoor satellite broadcast enabler has received the first loan of a scheme being piloted to encourage more research and development by medium-sized businesses in Europe.
EVS will use the €12m debt from the European Investment Bank (EIB)…
A Belgian outdoor satellite broadcast enabler has received the first loan of a scheme being piloted to encourage more research and development by medium-sized businesses in Europe.
EVS will use the €12m debt from the European Investment Bank (EIB) with another €12m split between two banks to fund roughly half of its new headquarters and innovation centre in Liège, eastern Belgium.
The wider debt facility, with ING and BNP Paribas each providing €6m, was signed yesterday and matures in seven years. The first drawdown of €8m will take place by the end of November while the first repayment is planned for 2015, when the building should have already been completed.
That building, which is also receiving subsidies granted by the Walloon region, will essentially consolidate 315 staff that are currently split over six sites. It will boast six levels – three of which will be devoted to innovation and project development and are key to the support it is receiving from Europe.
EIB’s loan comes under the Growth Finance Initiative (GFI) it recently established with the European Commission, offering a variety of funding solutions ranging from senior secured debt to mezzanine financing. It has capital support of €150m under its pilot phase, with between €7.5m and €25m available for mid-caps with up to 3000 employees that can prove they are particularly strong on innovation.
At EVS, which provides technology that enables the production of live video programming, between 15-20% of revenues go towards RDI, and about half of its roughly 500 employees work in the R&D department.
Pim van Ballekom, EIB’s vice-president, said: “With its strong focus on research, development and innovation, EVS is an ideal candidate for this new financial instrument.
“The Growth Finance Initiative allows us to provide tailor-made financing solutions to companies that invest above industry average in RDI-intensive sectors. These companies play a pivotal role in Europe’s knowledge economy and they contribute significantly to the EU’s competitiveness. At the same time, they often face difficulties accessing appropriate financial resources. We expect the joint Growth Finance Initiative to help fill this market gap.”
The scheme comes under the Risk Sharing Finance Facility set up by the EIB – and financially supported by the EU – in 2007 to address the markets’ failure to allocate sufficient resources to RDI.
The EIB group, comprising EIB and the European Investment Fund, has pledged to provide up to €20bn to SMEs and midcaps in total in 2013, after lending €13bn last year. It has also earmarked between €12bn and €15bn for RDI investments in the current year.
EVS recently reported Q3 2013 revenues down 29.2% to €28m, compared with €39.5m for the corresponding period last year. EBIT fell 56.5% to €8.4m.
CFO Jacques Galloy blamed the drop on distortion caused by last year’s sales being “very high thanks to the summer sporting events”.
He added: “The record global autumn order book of €61m for sales in 2013, 2014 and beyond calls for a strong seasonal year-end, ahead of the Winter Olympics in February and in line with earlier guidance of full year revenues to be slightly below €130m.”
