Page 34 - KELAG Annual Report 2019
P. 34

well as quick, reliable access to cash based on contractually
                                                                  agreed facilities. Since the end of 2019, KELAG has had a
                                                                  contractually agreed credit facility of EUR 250m until 2024
                                                                  which is linked to the KELAG sustainability rating. EcoVadis,
                                                                  one of the leading ESG (Environmental, Social, Governance)
                                                                  ratings  providers,  evaluated  and  rated  KELAG  in  this
                                                                  context.  The  costs  are  based  on  KELAG’s  sustainability
                                                                  rating  and  may  be  reduced  if  the  rating  improves.  In
                                                                  addition to the very successful KELAG bonds issued in 2012
                                                                  and 2014, KELAG has a loan with a volume of EUR 90m from
                    Again in the financial year 2019, the generally risk-averse
                                                                  the European Investment Bank (EIB).
                    focus of the financial strategy remained on the two main
                    pillars:  securing  liquidity  and  strengthening  the  Group’s
                    credit  standing.  In  this  context,  the  current  financial
                    strategy is a system of rules that is embraced by employees
                    and is embedded in the overarching corporate strategy. The
                    aim  is  to  maintain  the  Group’s  good  credit  rating  in  a
                    difficult  business  environment,  even  as  the  economy
                                                                  The  Group  acts  externally  as  a  financial  entity,  thereby
                    becomes more dynamic and thus volatile. Safeguarding an
                                                                  strengthening and optimising its negotiating position vis-
                    adequate liquidity reserve and maintaining a good credit
                                                                  à-vis  investors,  banks  and  other  business  partners.
                    rating are still the primary objectives that guarantee KELAG
                                                                  Moreover,  all  short-,  medium-  and  long-term  financing
                    the  highest  level  of  flexibility  possible  and  unrestricted
                                                                  measures  are  carried  out  at  KELAG,  which  also  acts  as  a
                    access to the financial markets. In addition, one of the key
                                                                  pooling centre.
                    tasks  is  to  centrally  manage  the  balanced  financing  of
                    group  entities  in  line  with  their  requirements.  When
                    selecting financing structures, the Group aims to diversify
                    its sources of finance and thereby safeguard existing bank
                    credit lines.


                                                                  The  cost  of  borrowing  and  the  unrestricted  access  to
                                                                  financial instruments hinge on a company’s credit rating.
                                                                  Because  risk  premiums  are  determined  based  on  rating
                                                                  categories, maintaining KELAG’s excellent credit rating in
                    The company still has stable cash inflows from operating
                                                                  the long term is of crucial importance. In the financial year
                    activities.  The  financial  strategy  for  2019  centred  on
                                                                  2019, Standard & Poor’s confirmed the good “A” rating with
                    ensuring that the Group had stable internal financing as
                                                                  a stable outlook.
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