Transmission Finance DAC

Transcription

1 SUPPLEMENTARY PROSPECTUS DATED 6 OCTOBER 2017 TO THE PROSPECTUS DATED 13 JUNE 2017 Transmission Finance DAC (incorporated with limited liability under the laws of Ireland with registered number ) 10,000,000,000 Multicurrency programme for the issuance of Bonds with proceeds to be lent to Caruna Networks Oy ( Caruna ) This Supplement (the Supplement ) to the Prospectus dated 13 June 2017 which comprises a base prospectus (the Prospectus ) constitutes a supplementary prospectus for the purposes of Article 16 of Directive 2003/71/EC, as amended (the Prospectus Directive ) and is prepared in connection with the 10,000,000,000 multicurrency programme for the issuance of bonds (the Programme ) established by Transmission Finance DAC (the Issuer ). Terms defined in the Prospectus have the same meaning when used in this Supplement. This Supplement has been approved by the Central Bank of Ireland (the Central Bank ) as competent authority under the Prospectus Directive. The Central Bank only approves this Supplement as meeting the requirements imposed under Irish and European law pursuant to the Prospectus Directive. This Supplement is supplemental to, and should be read in conjunction with, the Prospectus and any other supplements to the Prospectus issued by the Issuer. The Issuer and the Caruna Group accept responsibility for the information contained in this Supplement. To the best of the knowledge and belief of the Issuer and the Caruna Group (having taken all reasonable care to ensure that such is the case) the information contained in this Supplement is in accordance with the facts and does not omit anything likely to affect the import of such information. The purpose of this Supplement is (i) to incorporate by reference into the Prospectus the unaudited consolidated financial accounts of Caruna Networks Oy in respect of the Caruna Group for the six months ended 30 June 2017 and the audited financial accounts of the Issuer for the financial period from 21 September 2015 to 31 December 2016 and (ii) to update the Prospectus and certain disclosures therein following recent Finnish regulatory developments. ADDITIONAL DOCUMENTS TO BE INCORPORATED BY REFERENCE On 8 September 2017, Caruna Networks Oy in respect of the Caruna Group 1 published its consolidated unaudited financial accounts as at, and for the six months, ended 30 June On 5 October 2017, the Issuer published its audited financial accounts for the financial period from 21 September 2015 to 31 December Copies of those financial accounts have been filed with the Irish Stock Exchange and the Central Bank and, by virtue of this Supplement, those financial accounts are incorporated in, and form part of, the Prospectus. The Issuer will provide, without charge, to each person to whom a copy of this Supplement has been delivered, upon the request of such person, a copy of each document deemed to be incorporated herein by reference unless any such document has been modified or superseded. Such requests should be directed to the Issuer at 32 Molesworth Street, Dublin 2, Ireland. 1 The Caruna Group includes Caruna Networks, CNS, CNE, Caruna Oy and Caruna Espoo.

2 The section entitled Documents Incorporated by Reference on page 10 of the Prospectus should therefore be read subject to the insertion of two additional limbs, limbs (d) and (e) as set out below: (d) the unaudited consolidated financial accounts for the six months ended 30 June 2017 of Caruna Networks Oy in respect of the Caruna Group 2 prepared in accordance with IFRS Documents/?progID=868&uID=7379&FIELDSORT=docId; and (e) the audited financial accounts for the financial period from 21 September 2015 to 31 December 2016 of the Issuer prepared in accordance with IFRS Announcements/Debt/Individual-Debt-Instrument-Data/Dept-Security- Documents/?progID=868&uID=7379&FIELDSORT=docId, together with the auditor s report thereon. On page 232 of the Prospectus, in the paragraph titled Availability of Financial Statements, the following paragraph should be added after the documents listed in paragraphs (a) (b): (c) Audited financial accounts for the financial period from 21 September 2015 to 31 December 2016 of the Issuer, together with the auditor s report thereon. AMENDMENTS TO THE PROSPECTUS On 11 May 2017, the Finnish Government introduced into parliament a draft government proposal on the complete reform of the Natural Gas Market Act and certain related legislation, including the EM Act Following consideration by parliament, the President of Finland has approved the law on 25 August 2017, taking effect on 1 September Therefore, the following amendments to the Prospectus shall be made. CHAPTER 1 RISK FACTORS BUSINESS AND REGULATORY RISKS IN RELATION TO THE CARUNA GROUP - Risks relating to the regulation of Caruna Oy and Caruna Espoo On pages 15 and 16 of the Prospectus, the risk factor titled Draft Proposal for a change to the EM Act 2013 (as defined below) shall be amended by replacing the first paragraph with the following paragraph: The EA issued a memorandum on 3 February 2016 (at the request of the Ministry (as defined below)), proposing that the Ministry consider certain legislative changes. On 11 May 2017, the Finnish Government introduced into parliament a draft government proposal on the complete reform of the Natural Gas Market Act and certain related legislation, including the EM Act Following consideration by parliament, the President of Finland has approved the law on 25 August Following the changes to the EM Act 2013 taking effect on 1 September 2017, the electricity network holder may increase electricity distribution fees a maximum of 15 per cent as compared to the payments it has collected during the past 12 months. If the network holder makes additional increases during the 12 month period following the first fee increase, these payments may not exceed 15 per cent of the payments collected during the 12 month period preceding the first increase made in the review period. There can be no assurance on the effect it may have on Caruna Group s business, financial condition, results of operations or prospects. This change and other changes in other regulation could have an adverse effect on the Caruna Group s ability to generate a return on its assets or on the costs of complying with new regulation and therefore could have an adverse impact on its financial position generally. This may result in the Caruna Group being unable to meet its liabilities, which may impact the ability of Caruna Networks to meet its payment obligations under the IBLA and, in turn, the ability of the Issuer to meet its payment obligations under the Bonds. 2 The Caruna Group includes Caruna Networks Oy, Caruna Networks Sähkönsiirto Oy, Caruna Networks Espoo Oy, Caruna Oy and Caruna Espoo Oy.

3 CHAPTER 6 DESCRIPTION OF THE CARUNA GROUP On page 85 of the Prospectus, the sentence The senior management organisation of Caruna Networks is shown below: and the related diagram showing the senior management organisation of Caruna Networks is replaced by the following wording: As of 22 nd September 2017 the Management Team of Caruna Networks is the following: Tomi Yli-Kyyny, CEO Harri Pynnä, Governance, Compliance and Risks Jyrki Tammivuori, Company Services and Strategic Planning Katriina Kalavainen, Customer Relations Tommi Saikkonen, Human Resources On pages 86 and 87 the section titled The CVs of the Executive Management of Caruna Networks is replaced in its entirety with the following: Tomi Yli-Kyyny Chief Executive Officer Jyrki Tammivuori CFO, Head of Company Services and Strategic Planning Tommi Saikkonen Head of Human Resources Katriina Kalavainen Head of Customer Relations Harri Pynnä Before Caruna Tomi worked as a CEO of Vapo Oy (State owned fuel and heat and power company) Before that he has 20 years of experience from insurance and banking. He worked as a CEO of Pohjola Insurance and also as a CEO of Helsinki Stock Exchange listed Pohjola Group Oyj He is currently a board member of Barona Oy and Garantia Oy. Tomi holds an M.Sc. (Eng.) from the Helsinki University of Technology. Jyrki previously worked at Stora Enso Oyj (a listed Finnish pulp and paper manufacturer) where he acted as Acting Chief Financial Officer ( ), Group Treasurer ( ) and several other finance positions in Brussels, London and Helsinki. He was Deputy member of the Board of Directors and member of the Board of Directors at Tornator Oyj and non-executive member of the Board of Directors at Thiele Kaolin Company, GA USA Jyrki holds an M.Sc. (Econ.) from the Helsinki School of Economics. Tommi has nine years of experience in the electricity distribution business and 25 years in human resources. He previously held several positions within Fortum including VP, Human Resources, Electricity Solutions & Distribution division ( ) and VP, HR Distribution BU ( ). He also held positions elsewhere including Director of Human Resources at Nokia Ltd ( ). Tommi holds an M.Sc. (Econ.) from the Helsinki School of Economics. Katriina has nine years of experience in electricity distribution and 17 years of experience in customer services. She has headed Customer Relations since 2013 and previously held several positions within Fortum including Head of Customer Data Management ( ) and Team Manager, Customer Service (2008). Prior to joining Fortum, she worked as Customer Service Manager (private and small business customers) at Elisa Oyj (a telecom business) ( ) and Customer Service Manager (private customers) at Elisa Oyj ( ). Katriina holds a BBA from the Helsinki School of Economics. Harri has 19 years of experience in the energy business. He worked as General Counsel of Fortum group ( ), Industrial Counsellor for

4 Head of Governance, Compliance and Risk the government of Finland (state-owned companies) ( ) and Legal Counsel and Senior Vice President, Corporate and Investment Banking Union of Finland ( ). He has also been the member of various boards on listed and private companies. Harri holds an LL.M. from the University of Turku. CHAPTER 7 SELECTED ASPECTS OF FINNISH REGULATION TO WHICH THE CARUNA GROUP IS SUBJECT Regulation applicable to the Caruna Group On pages 91 and 92 of the Prospectus, the section titled Regulation applicable to the Caruna Group shall be amended by replacing the second paragraph (beginning with On 11 May 2017 ) with the following paragraph: On 11 May 2017, the Finnish Government introduced into parliament a government proposal on the complete reform of the Natural Gas Market Act and certain related legislation, including the EM Act Following consideration by the parliament, the President of Finland has approved the law on 25 August Following the changes to the EM Act 2013 taking effect on 1 September 2017, the electricity network holder may increase electricity distribution fees by a maximum of 15 per cent. as compared to the payments it has collected during the past 12 months. If the network holder makes additional increases during the 12 month period following the first fee increase, these payments may not exceed 15 per cent. of the payments collected during the 12 month period preceding the first increase made in the review period. Energy Authority On page 93 of the Prospectus under the subheading Energy Authority, the following footnote shall be inserted in the first point of the list (which starts after the paragraph beginning With respect to the electricity (and natural gas) markets, ) behind a general duty to supervise compliance with the EM Act 2013, the Natural Gas Market Act (508/2000, as amended) and before and the relevant EC legislation : As of 1 January 2018, this reference will be to the Natural Gas Market Act (587/2017). There will also be a new act regulating the unbundling of the natural gas transmission network owner, the compliance of which will also be supervised by the EA. Main Objectives of the 2013 Reform Enhanced Quality and Security of Supply be amended by replacing the fourth paragraph with the following paragraph: The EM Act 2013 includes a general obligation on all operators to prepare contingency plans for ordinary disturbances as well as for extraordinary events. Through sufficient contingency planning, operators seek to ensure that in the event of such disturbances, electricity distribution is restored with the minimum amount of disruption, while also taking into consideration the most vulnerable and critical functions of society. As part of this obligation, DSOs must have plans in place to ensure continued communications with emergency personnel and other network operators and the deployment of repair personnel. The National Emergency Supply Agency ( NESA ) supervises the contingency planning of the DSOs and a DSO must submit a separate contingency plan to NESA. The plan is required to be updated at least every two years and in the event of material changes in circumstances. Each Caruna OpCo has an up-to-date contingency plan in place which has been approved by NESA. The plan is prepared on the basis of well-tested preparedness plans of the Caruna OpCos and various years of experience in storm situations and other disturbances. On 25 August 2017, the EM Act 2013 was changed so that the

5 contingency plans should be updated at least every third year or when circumstances so require and that the EA would be the party responsible for following up on the plans. The changes to the EM Act 2013 were introduced following a government proposal concerning complete reform of the Natural Gas Market Act and certain related legislation, which was approved by the Finnish Government following parliamentary consideration. be amended by replacing the fifth paragraph with the following paragraph: According to the Natural Gas Market Act, the wholesale and retail markets for natural gas will be opened for competition on 1 January 2020, and the Electricity Market Act and Natural Gas Market Act include provisions that limit unreasonable increases to the transmission and distribution fees of electricity and gas. The amendments to the Electricity Market Act and the Natural Gas Market Act include a ceiling for any increase of transmission and distribution prices of 15 per cent. of the payments collected during the preceding 12 month period. be amended by replacing the seventh paragraph with the following paragraph: The new Natural Gas Market Act will enter into force on 1 January 2018 and the unbundling provisions of natural gas transmission and natural gas sales activities as well as the opening of the natural gas market for competition on 1 January The changes to the EM Act 2013 will come into force on 1 September CHAPTER 17 GENERAL INFORMATION Significant or Material Change On page 231 of the Prospectus, the section entitled Significant or Material Change shall be amended by replacing the text therein with the following paragraph: There has been no significant change in the financial or trading position of the Caruna Group since 30 June 2017, and no material adverse change in the financial position or prospects of the Issuer or the Caruna Group since 31 December GENERAL INFORMATION To the extent that there is any inconsistency between (a) any statement in this Supplement or any statement incorporated by reference into the Prospectus by this Supplement and (b) any other statement in or incorporated by reference in the Prospectus, the statements in (a) above will prevail. Save as disclosed in this Supplement, there has been no other significant new factor, material mistake or inaccuracy relating to information included in the Prospectus since the publication of the Prospectus. For as long as the Programme remains in effect or any Security is outstanding, copies of the current Prospectus, together with any amendments or supplements thereto (including this Supplement) may be inspected physically at the registered office of the Issuer and from the specified offices of the Paying Agents for the time being in London. In addition, a copy of this Supplement will be available on the website of the Irish Stock Exchange (