The goal of WACKER’s financing strategy is to ensure sustainable growth and stability for the Group. This strategy comprises both financing through our own resources and the use of debt instruments.
We satisfy our capital requirements by means of operating cash flow, and short-term and long-term financing.
We ensure the Group’s ongoing solvency with rolling cash-flow management and sufficient contractually agreed lines of credit. Financing requirements are calculated for the entire Group, with loans usually being concluded at the Group level. Project-specific or regional funding is available in special cases.
Financing Measures in 2015
The Group took no significant financing measures in 2015. As planned, WACKER repaid a € 150 million installment of a promissory note (German Schuldschein) on schedule. We made both early and scheduled repayments totaling € 56 million on loans taken out to finance projects in China. In 2015, the syndicated loan of € 200 million taken out in 2014 was extended until 2020. This credit line is currently not being utilized.
The placement of 42.2 percent of the shares in Siltronic AG on the Frankfurt Stock Exchange on June 11, 2015 brought the Group € 379.5 million, while the costs of this transaction amounted to € 17.6 million. The additional capital gained will benefit WACKER’s chemical and polysilicon business.
The Group’s financing agreements contain standard market credit terms and, in the case of large loans, a net debt-to-EBITDA ratio as the only financial covenant.
For all the loans that we negotiate, we structure the agreements carefully to ensure that the financial partners are treated equally (pari passu) and that the agreements can subsequently be monitored groupwide. Some of the liabilities to banks are fixed-interest while others have variable interest rates. As of December 31, 2015, WACKER had unused lines of credit with terms of over one year in the amount of around € 600 million.
WACKER collaborates with a number of banks (core-bank principle), who must have an investment-grade credit rating and a long-term business model.