REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Unaudited Financial Statements |
for the Period 22 July 2022 to 31 December 2022 |
for |
CALIFORNIA HOLDING III LIMITED |
REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Unaudited Financial Statements |
for the Period 22 July 2022 to 31 December 2022 |
for |
CALIFORNIA HOLDING III LIMITED |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Contents of the Financial Statements |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 |
Income Statement | 5 |
Other Comprehensive Income | 6 |
Balance Sheet | 7 |
Statement of Changes in Equity | 8 |
Notes to the Financial Statements | 9 |
CALIFORNIA HOLDING III LIMITED |
Company Information |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Strategic Report |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
The directors present their strategic report for the period 22 July 2022 to 31 December 2022. |
The principal activity of California Holding III Limited (the "Company") in the period was that of a holding company and the directors intend it to continue primarily as an investment holding company for the foreseeable future. |
The Company is a private company limited by shares and is incorporated and domiciled in England. |
REVIEW OF BUSINESS |
The Company generated income on a deal contingent forward. As a result, the Company made a profit for the period of €11,151,590. |
The financial position of the Company as at 31 December 2022 is shown in the financial statements. The Company is in a net asset position of €11,151,592 as at 31 December 2022. |
FUTURE DEVELOPMENTS |
The Company will continue in its role primarily as an investment holding company. |
PRINCIPAL RISKS AND UNCERTAINTIES |
As the Company acts as a holding company, the performance of investments is considered a principal risk. The directors regularly review the performance of subsidiary companies and receive detailed performance information that enable them to identify risks of potential impairment. |
FINANCIAL KEY PERFORMANCE INDICATORS ("KPI'S") |
The directors oversee the operations of California Holding III Limited at the parent company level. The board of directors do not believe the use of KPI's are appropriate for assessing the performance or position of the Company as this is not a trading entity. |
STAKEHOLDER ENGAGEMENT |
As the Company is an investment holding company within the group of companies of which PE California Holding Limited is the ultimate parent company, it does not have any clients or employees, and its key stakeholder is therefore its shareholder. |
APPROVED BY THE BOARD AND SIGNED ON ITS BEHALF: |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Report of the Directors |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
The directors present their report with the financial statements of the Company for the period 22 July 2022 to 31 December 2022. |
INCORPORATION |
The Company was incorporated on 22 July 2022. |
EVENTS AFTER THE REPORTING PERIOD |
The Company is part of a group of companies which comprises PE California Holding Limited and its subsidiary companies (the "Group"). On 31 January 2023 the Group acquired the high temperature solution (HTS) business of Imerys S.A., which is known as Calderys. HTS is a leading global provider of refractory solutions serving more than 6,000 customers in the iron and steel, thermal and foundry markets. The effective transaction price totalled €646.5M. In addition, a total amount of €57.3M was paid to Imerys to settle intercompany debt between HTS Business and Imerys at the date of acquisition. |
On 16 February 2023 the Group acquired Harbison Walker International (HWI), a supplier of refractory products and services in North America. The effective transaction price totalled €375.6M. |
In June 2023 the Group refinanced its long-term debt and reviewed its entire financing structure. As part of this refinancing, on 1 June 2023 the Group issued $550M worth of bonds redeemable at par on 1 June 2028, with a 11.25% per annum interest rate. This issue was part of a placement on international markets governed by the provisions of Rule 144A/Regulations S of the 1993 US Securities Act. |
DIRECTORS |
The directors who have held office during the period from 22 July 2022 to the date of this report are as follows: |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including UK-adopted International Financial Reporting Standards. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- select suitable accounting policies and then apply them consistently; |
- make judgements and accounting estimates that are reasonable and prudent; |
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business; |
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Report of the Directors |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
GOING CONCERN |
The financial statements are prepared on a going concern basis. The board of directors consider this to be appropriate because they are aware of the finances available across the Group and have concluded that these are sufficient to cover a period of 12 months from signing this report. |
This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies. |
APPROVED BY THE BOARD AND SIGNED ON ITS BEHALF: |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Income Statement |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
Notes | € |
TURNOVER |
Administrative expenses | ( |
) |
OPERATING LOSS | ( |
) |
Interest receivable and similar income |
PROFIT BEFORE TAXATION | 5 |
Tax on profit | 6 |
PROFIT FOR THE FINANCIAL PERIOD |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Other Comprehensive Income |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
Notes | € |
PROFIT FOR THE PERIOD |
OTHER COMPREHENSIVE INCOME | - |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Balance Sheet |
31 DECEMBER 2022 |
Notes | € |
FIXED ASSETS |
Investments | 7 |
CURRENT ASSETS |
Debtors | 8 |
CREDITORS |
Amounts falling due within one year | 9 | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 10 |
Retained earnings | 11 |
SHAREHOLDERS' FUNDS |
The directors acknowledge their responsibilities for: |
(a) | ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and |
(b) | preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company. |
The financial statements were approved by the Board of Directors and authorised for issue on |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Statement of Changes in Equity |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
Called up |
share | Retained | Total |
capital | earnings | equity |
€ | € | € |
Changes in equity |
Issue of share capital | - |
Total comprehensive income | - |
Balance at 31 December 2022 |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Notes to the Financial Statements |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
1. | STATUTORY INFORMATION |
California Holding III Limited (the "Company") is a private company, limited by shares, registered in England and Wales. The Company's registered number and registered office address can be found on the Company Information page. |
The presentation currency of the financial statements is the Euro (€). |
The principal activity of the Company was that of a holding company. |
2. | ACCOUNTING POLICIES |
Basis of preparation |
These financial statements have been prepared in accordance with UK-Adopted International Accounting Standards and the Companies Act 2006. The financial statements have been prepared under the historical cost convention. |
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3). |
Changes in accounting policies |
i) New standards, amendments, International Financial Reporting Interpretations Committee ("IFRIC") interpretations and new relevant disclosure requirements. |
There are no amendments to accounting standards, or IFRIC interpretations that are effective for the year end 31 December 2022 that have a material impact on the financial statements. |
ii) New standards, interpretations and amendments not yet effective |
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2022 reporting periods and have not been early adopted by the Company. These standards are not expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions. |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework": |
• | the requirements of IFRS 7 Financial Instruments: Disclosures; |
• | the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134 to 136 of IAS 1; |
• | the requirements of IAS 7 Statement of Cash Flows; |
• | the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors; |
• | the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures; |
• | the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group. |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Notes to the Financial Statements - continued |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. |
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. |
Taxation |
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. |
The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities. |
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying value in the financial statements. However deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill, or arise from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. |
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current taxes against current tax liabilities and when the assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. |
Foreign currencies |
Foreign currency transactions are translated into the foreign currency using the exchange rates prevailing at the dates of the transactions. |
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. |
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. |
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'interest payable and similar expenses'. All other foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'. |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Notes to the Financial Statements - continued |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
2. | ACCOUNTING POLICIES - continued |
Creditors |
Creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. |
Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. |
Investments in subsidiaries |
Investments in subsidiaries are measured at cost less accumulated impairment losses. |
DCF Contracts |
Completed Deal Contingent Forward ("DCF") contracts are accounted for as to the difference between the contracted rate at exchange and the rate prevailing on completion. |
Contracts which have not completed are accounted for as to a proportion of profit or loss accrued to the financial position date using an average curve rate at the financial position date. |
Going concern |
The financial statements are prepared on a going concern basis. The Board consider this to be appropriate because they are aware of the finances available across the group of companies of which the Company is a member and the ultimate parent company is PE California Holding Limited (the "Group") and have concluded that these are sufficient to cover a period of 12 months from signing this report. |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ form the estimates. The estimates and underlying assumptions are reviewed on an ongoing basis, revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The following are the sources of estimation uncertainty that the directors have made in the process of applying the Company's accounting policies and that has the most significant effect on the amounts recognised in the financial statements. There are no critical judgements. |
Impairment of investments |
Determining whether the investments in subsidiaries are impaired requires an estimation of the value in use to the group and parent company. The value in use calculation requires management to estimate the future cash flows expected to arise from the asset and apply a suitable discount rate in order to calculate the present value. It has been determined that there is sufficient headroom and no impairment is required in the current period. The value of the investments in subsidiaries is shown on the statement of financial position. |
4. | EMPLOYEES AND DIRECTORS |
There were no staff costs for the period ended 31 December 2022. |
The average number of employees during the period was as follows: |
Management |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Notes to the Financial Statements - continued |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
4. | EMPLOYEES AND DIRECTORS - continued |
€ |
Directors' remuneration |
5. | PROFIT BEFORE TAXATION |
The profit before taxation is stated after charging/(crediting): |
€ |
Profit on deal contingent forward | (13,472,622 | ) |
Foreign exchange differences | 62 |
(13,472,560 | ) |
6. | TAXATION |
Analysis of tax expense |
No liability to UK corporation tax arose for the period. |
7. | INVESTMENTS |
Shares in |
group |
undertakings |
€ |
COST |
Additions | 30,417 |
At 31 December 2022 | 30,417 |
NET BOOK VALUE |
At 31 December 2022 | 30,417 |
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
Registered office: Eschersheimer Landstr. 14, 60322 Frankfurt am Main, Deutschland |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 95 Rue la Boétie, 75008 Paris, France |
Nature of business: |
% |
Class of shares: | holding |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Notes to the Financial Statements - continued |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
7. | INVESTMENTS - continued |
Registered office: c/o Baker & McKenzie Advokatbyra AB, Box 180, Stockholm, 101 23, Sweden |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 1209 Orange Street, Corporation Trust Center, Wilmington, New Castle, DE, 19801, United States |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 1209 Orange Street, Corporation Trust Center, Wilmington, New Castle, DE, 19801, United States |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 1209 Orange Street, Corporation Trust Center, Wilmington, New Castle, DE, 19801, United States |
Nature of business: |
% |
Class of shares: | holding |
The holding in California Acquisition Holding Corporation is indirect. All others are direct. |
The Company's investments at the Balance Sheet date in the share capital of companies include the following: |
8. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
€ |
Amounts owed by group undertakings |
Other debtors |
Amounts owed by group undertakings are unsecured, interest free and repayable on demand. |
The DCF is held at fair value in line with the requirements of International Financial Reporting Standards 13. Fair Value Measurement. The value of this instrument is based on the expected future cash flows originating from it. Accordingly this item is categorised within Level 3 of the Fair Value Hierarchy as the inputs to its measurement represent unobservable inputs. |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Notes to the Financial Statements - continued |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
9. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
€ |
Trade creditors |
Amounts owed to group undertakings |
Other creditors |
Accrued expenses |
Amounts owed to group undertakings are unsecured, interest free and repayable on demand. |
10. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal |
value: | € |
Ordinary | $1 | 1 |
Ordinary | €1 | 1 |
2 |
The following shares were allotted and fully paid for cash at par during the period: |
The issue of shares during the period was on incorporation and the further capitalisation of the Company. |
11. | RESERVES |
Retained |
earnings |
€ |
Profit for the period |
At 31 December 2022 |
CALIFORNIA HOLDING III LIMITED (REGISTERED NUMBER: 14253707) |
Notes to the Financial Statements - continued |
FOR THE PERIOD 22 JULY 2022 TO 31 DECEMBER 2022 |
12. | EVENTS AFTER THE REPORTING PERIOD |
The Company is part of a group of companies which comprises PE California Holding Limited and its subsidiary companies (the "Group"). On 31 January 2023 the Group acquired the high temperature solution (HTS) business of Imerys S.A., which is known as Calderys. HTS is a leading global provider of refractory solutions serving more than 6,000 customers in the iron and steel, thermal and foundry markets. The effective transaction price totalled €646.5M. In addition, a total amount of €57.3M was paid to Imerys to settle intercompany debt between HTS Business and Imerys at the date of acquisition. |
On 16 February 2023 the Group acquired Harbison Walker International (HWI), a supplier of refractory products and services in North America. The effective transaction price totalled €375.6M. |
In June 2023 the Group refinanced its long-term debt and reviewed its entire financing structure. As part of this refinancing, on 1 June 2023 the Group issued $550M worth of bonds redeemable at par on 1 June 2028, with a 11.25% per annum interest rate. This issue was part of a placement on international markets governed by the provisions of Rule 144A/Regulations S of the 1993 US Securities Act. |
13. | ULTIMATE CONTROLLING PARTY |
The immediate parent company of California Holding III Limited is California Holding II Limited. The ultimate parent company of California Holding III Limited is PE California Holding Limited. PE California Holding Limited is a company incorporated in the United Kingdom. The registered office of PE California Holding Limited is 280 Bishopsgate, London, EC2M 4RB. |
The ultimate controlling party of California Holding III Limited is Platinum Equity Capital QIQ Partners International VI (Cayman), L.P. |
14. | PROFIT ON DEAL CONTINGENT FORWARD |
During the period, the Company entered into DCF contracts with various banks in order to assist with the acquisition of the Calderys Group in January 2023. |
As a consequence of the transactions, upon completion of the transactions, there was a profit to the Company of $24,483,950. As at 31 December 2022, the fair value of the DCF that has been accounted for in the financial statements is $14,077,950 (€13,472,560). |