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 centrally. Project-specific or regional funding is available in special cases.
Financing Measures in 2016
In 2016, WACKER repaid a loan installment of €200 million to the European Investment Bank (EIB). At the same time, a long-term financing agreement amounting to €200 million was concluded with the EIB and will be drawn in the first quarter of 2017. In addition, WACKER took out five bilateral loans at banks totaling US$ 250 million for three years. In 2016, the syndicated loan of €200 million taken out in 2014 was extended by another year until 2021. Moreover, in December 2016, a syndicated loan of €400 million due to expire in 2017 was prematurely refinanced in the same amount for five years. Neither of these syndicated loans is currently being utilized.
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, 2016, WACKER had unused lines of credit (including syndicated loans) with terms of over one year in the amount of around €800 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.