Financial position
Capital structure
Various instruments are used to finance the maintenance and expansion of the energy networks and other activities. For this finance, Alliander is dependent on its shareholders, institutional investors and banks. Alliander’s creditworthiness is rated by rating agencies that publish their findings. Alliander capital structure as at year-end 2017 was made up as follows:
Capital structure
As the capital structure reveals, Alliander is 59% equity-financed. Equity is provided by the shareholders and is increased by the partial retention of the net profit each year. The shareholders receive a percentage of the net profit as dividend each year. Holders of the subordinated perpetual bond loan receive a fixed return on their investment out of the reported profit provided a dividend is declared. Alliander does not have access to finance by issuing new shares to private investors because private shareholdings in Dutch regional network companies are prohibited by law. To raise external finance, Alliander needs to turn to providers of borrowed capital. These are mainly institutional investors that buy debt instruments issued by Alliander. To meet its long-term finance requirements, Alliander has issued five bond loans that are quoted on the stock exchange, including a subordinated perpetual bond loan. The loans are listed on the Luxembourg Stock Exchange and NYSE Euronext Amsterdam. In addition, Alliander has entered into a loan agreement with the EIB for the modernisation and expansion of Liander’s electricity networks. To meet its variable finance needs in the short term, Alliander regularly issues short-term commercial paper. Additionally, Alliander has a contracted committed credit facility with a number of banks to provide a backup source of finance should it not be possible to raise the necessary funds on the capital market or the money market.
The development in the net debt position during the year 2017 is shown below.
Development of net debt position
Net debt position
€ million | 31 December 2017 | 31 December 2016 | ||
Long-term interest-bearing debt | 1,553 | 1,483 | ||
Short-term interest-bearing debt | 231 | 81 | ||
Finance lease liabilities | 150 | 168 | ||
Gross debt | 1,934 | 1,732 | ||
Cash and cash equivalents | 101 | 48 | ||
Current financial assets | - | 15 | ||
Investments held for lease obligations related to cross-border leases | 193 | 224 | ||
Total cash and cash equivalents and investments | 294 | 287 | ||
Net debt in accordance with the annual financial statements (IFRS) | 1,640 | 1,445 | ||
50% of the subordinated perpetual bond loan | 248 | 248 | ||
Net debt on the basis of Alliander's financial policy | 1,888 | 1,693 | ||
The net debt position rose by €195 million to €1,888 million as a result of drawing ECP financing and the first tranche of the EIB loan.