Financing Strategy

WACKER’s financing strategy follows two equally important goals:

• To finance corporate growth as far as possible without outside help. A supplementary strategy of external borrowing ensures that important investment projects are partially financed with long-term loans.
• To sustain a positive net cash flow.

We cover our capital requirements from operating cash flow, and from short-term and long-term financing.

We ensure the Group’s permanent solvency via rolling cash-flow management, and adequate credit lines guaranteed in writing. Financing requirements are calculated for the entire Group, with funding usually being granted at a Group level. Project-specific or regional funding is available in special cases.

Financing Measures in 2012

The Group took several financing measures in 2012. Wacker Chemie AG issued four promissory notes (German Schuldscheine) totaling €300 million with maturities of three and five years, at standard market credit terms. The liquidity inflow occurred on February 23, 2012. A syndicated loan of €300 million, due June 2013, was paid off with a syndicated credit line of €400 million, due June 2017. A new loan of 10 billion Japanese yen (€88.1 million) was taken out with a five-year maturity beginning when the first installment was drawn. In September 2012, WACKER drew down the loan’s first 5-billion-yen installment and, in November 2012, the second 5-billion-yen installment.

No collateral exists for financial liabilities. Some of the liabilities to banks are fixed-interest and others have variable interest rates. Thus, as of December 31, 2012, WACKER has unused and used credit lines of around €1.63 billion with terms of over one year. The measures concluded contain standard market credit terms and a net debt-to-EBITDA ratio as the only financial covenant.

WACKER collaborates with a number of banks (core-bank principle). These must have an investment-grade credit rating and a long-term business model. To minimize counterparty and concentration risks, a single bank’s share in credit lines promised to WACKER must not exceed 20 percent. The only exception is the European Investment Bank.