Risk of interest rate hikes

The Company is exposed to a risk of interest rate changes due to debt instruments issued by GPW with variable interest, maturing on 2 January 2017.

 

A sharp increase of the interest rates including the base rate of the bonds could boost the cost of servicing the liabilities under the bonds and have an adverse effect on GPW’s financial position and results.

 

Risks of the development of Aquis Exchange

Aquis Exchange, GPW’s associate based in London which operates a European multilateral trading facility, is a start-up; in this case, the business targets may take longer than expected to achieve. At this time, the company’s revenue is still insufficient to break even. Aquis’s losses are recognized in the consolidated statement of comprehensive income in the cash position share of profit / loss of associates.

The company raised GBP 3 million of equity in mid-2015 (at an issue price of GBP 16.93 per share, which was 30% more than paid by GPW) and it is planning further capital increases in 2016. Its share in the European market was 0.43% in 2015, reaching 0.67% in October 2015. If Aquis fails to improve its financial results or to raise capital as planned, this could affect the value of GPW’s investment in the company.