Business Context and Reporting Period
This Form 6-K filing by EDENOR S.A. (Empresa Distribuidora y Comercializadora Norte S.A.) presents a Special Consolidated Merger Financial Statement as of September 30, 2013. The document details the proposed merger between EDENOR (the Acquiring Company) and Emdersa Holding S.A. (the Acquired Company), with an effective date of October 1, 2013. EDENOR is an Argentine utility responsible for the distribution and sale of electricity. The filing was signed on December 18, 2013.
Key Financial Metrics (as of September 30, 2013)
All figures are stated in thousands of Argentine pesos (ARS) unless otherwise noted. The filing provides a balance sheet snapshot but does not include a statement of comprehensive income or cash flows for the period.
| Category | Consolidated Value |
|---|---|
| Total Assets | 7,468,350 |
| Total Liabilities | 6,259,149 |
| Total Equity | 1,209,201 |
| Cash and Cash Equivalents | 287,483 |
| Trade Receivables | 719,872 |
| Borrowings (Total) | 1,310,484 |
| Trade Payables (Total) | 2,881,664 |
Note: Revenue, profit, and cash flow metrics are not provided in this specific filing as it is a special merger statement of financial position only.
Material Changes and Economic Situation
- Equity Recovery: The company previously reported negative equity as of March 31, 2013. However, following a partial recognition of higher costs (CMM) for the period May 2007 through February 2013 (via Energy Secretariat Resolution 250/13), the company recorded positive retained earnings of 408,050 (thousand ARS) as of September 30, 2013.
- Merger Impact: The consolidation includes Emdersa Holding S.A., which held assets of 33,035 (thousand ARS) classified as held for sale. Intercompany balances were eliminated during consolidation.
- Debt Structure: Non-current borrowings consist primarily of Corporate Notes totaling 1,258,298 (thousand ARS). Current borrowings include financial loans and accrued interest totaling 52,186 (thousand ARS).
Outlook, Risks, and Management Commentary
Management has raised substantial doubt about the company's ability to continue as a going concern for the next fiscal year. Key risks and contingencies include:
- Regulatory and Revenue Uncertainty: The company faces a persistent operating deficit due to rising costs and delays in obtaining genuine rate increases. While Resolution 250/13 provided a partial solution, current revenue levels are insufficient to cover operating costs, investment requirements, and financial service payments.
- Liquidity Constraints: The company has been forced to partially cancel obligations with the Wholesale Electricity Market (CAMMESA) to preserve cash. There is a risk of insufficient liquidity if new rate schedules are not issued or if additional financing mechanisms are not granted by the government.
- Legal Actions: The company abandoned an "acción de amparo" (protection of rights) filed against the regulatory authority (ENRE) in May 2013 following the issuance of Resolution 250/13, though it continues to claim fundamental issues via other legal actions.
- Post-Reporting Events:
- On October 4, 2013, Pampa Energía S.A. paid the balance for the sale of EGSSA ($53.3 million), partially in cash and partially via EDENOR Class 9 Corporate Notes.
- On October 11, 2013, the company repurchased Class 9 Corporate Notes with a nominal value of USD 1,590,000.
Investor Verification Checklist
- Going Concern Status: Verify the company's ability to secure further regulatory rate adjustments or government financing to avoid insolvency.
- Regulatory Resolution 250/13: Confirm the sustainability of the cost recognition mechanism and whether it fully addresses the operating deficit.
- CAMMESA Obligations: Assess the extent of deferred payments to the Wholesale Electricity Market and potential penalties or service interruptions.
- Merger Completion: Confirm the final approval of the merger with Emdersa Holding S.A. by shareholders and regulatory bodies.
- Debt Maturity: Review the terms of the Corporate Notes (Class 9) and the impact of recent repurchases on the capital structure.