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5. Increase of investment in MIL Energia Renovável Ltda.
On 31 May 2021 MIL Madeiras Preciosas Ltda., owning already 40 % of the ordinary shares, acquired the remaining 60 % of the outstanding ordinary shares of the renewable power plant BK Energia Itacoatiara Ltda. and renamed it to MIL Energia Renovável Ltda. The fair value of the 40 % at acquisition date amounted to EUR 0.6 million, EUR 0.2 million higher than the remeasured equity interest. This loss, as well as the historical currency effects directly related to the existing 40 % investment, held in equity, in the amount of EUR -0.2 million, are now recognized in the consolidated statement of profit or loss.
The goodwill of EUR 0.9 million arising from the acquisition consists largely of the synergies and economies of scale expected from increasing the portion of investment in BK Energia. It is the aggregate of the consideration transferred of EUR 2.0 million and the fair value of the 40 % at acquisition date (EUR 0.6 million), compared with the net of acquisition-date assets and liabilities of EUR 1.6 million. None of the goodwill recognized is expected to be deductible for income tax purposes.
In contract currency, the total consideration to be transferred in cash by MIL Madeiras Preciosas Ltda. amounts to BRL 13.2 million; this includes BRL 2.3 million as a 60 % share in the cash portfolio of BK Energia Itacoatiara Ltda. The compensation is contractually distributed over various dates, of which a tranche of BRL 2.7 million is only payable at the year-end. The total consideration includes contingent considerations of 20 % of the last tranche, recorded at the acquisition date fair value.
The provisional fair value of the financial assets includes trade and other receivables of BRL 4.5 million. No individual credit losses had to be recognized.
|in thousand EUR||31 May 2021|
|Trade and other receivables||809|
|Other current financial assets||1 011|
|Property, plant and equipment||66|
|Total net assets||1 622|
The interim financial statements include the results of MIL Energia Renovável Ltda. for the one-month period from the acquisition date. For this period, the revenue in the consolidated statement of profit or loss, contributed by MIL Energia Renovável Ltda., amounted to EUR 0.2 million and the loss after tax to EUR 0.1 million. If MIL Energia Renovável Ltda. had been fully consolidated from 1 January 2021, the consolidated statement of profit or loss would have included revenue of EUR 1.5 million and profit after tax of EUR 0.4 million.