3.7 Equity

Share capital

At 1 January 2020, the share capital was at CHF 278.7 million, comprising 27,874,649 fully-paid-in registered shares at par value of CHF 10 each. On 24 June 2020, the Annual General Meeting of Alpiq Holding Ltd. approved the squeeze-out merger with Alpha 2020 Ltd. proposed by the Board of Directors. Following the approval resolution passed at the Extraordinary General Meeting of Alpha 2020 Ltd. on the same day, Alpiq Holding Ltd. was merged as the transferring company into Alpha 2020 Ltd., which was renamed Alpiq Holding Ltd. on the same day. The merger became legally effective upon entry in the Swiss commercial register on 26 June 2020. After the merger and change of name, Alpiq Holding Ltd. had a share capital of CHF 0.279 million, comprising 27,874,649 registered shares at par value of CHF 0.01 each.

The conversion of the hybrid loan from the shareholders in the fourth quarter of 2020 (see below) created 5,235,715 new registered shares at par value of CHF 0.01 each, leading to a share capital increase of CHF 52,357.15. At 31 December 2020, the share capital was at CHF 0.331 million, comprising 33,110,364 fully-paid-in registered shares at par value of CHF 0.01 each.

The shareholder structure breaks down as follows:

The Board of Directors of Alpiq Holding Ltd. submits a proposal to the Annual General Meeting at 28 May 2021 to distribute a dividend of CHF 1.40 per share (totalling CHF 46 million) for the 2020 financial year.

Hybrid capital

Hybrid loan from the main Swiss shareholders

In 2013, the main Swiss shareholders subscribed to a hybrid loan in the amount of CHF 367 million. In the fourth quarter of 2020, the Board of Directors of Alpiq Holding Ltd. proposed a conversion of the outstanding hybrid loan from the shareholders into equity. By resolution dated 29 October 2020, the Extraordinary General Meeting approved the share capital increase. The amendment to the Articles of Association and the approval of the audited capital increase report by the Board of Directors both took place in mid-November. The share capital increase became legally effective upon entry in the Swiss commercial register on 16 November 2020.

Interest payments on the hybrid loan from the main Swiss shareholders could be suspended without the need for Alpiq to subsequently pay the suspended interest. As in the previous year, Alpiq resolved not to pay any interest on the hybrid loan from the main Swiss shareholders for the period from March 2019 to March 2020. Any claim to interest accrued after March 2020 was waived as part of the conversion.

Public hybrid bond

In 2013, Alpiq placed a CHF 650 million public hybrid bond on the Swiss capital market. It has an unlimited maturity and qualifies as equity under IFRS accounting guidelines. Alpiq is entitled to repay the public hybrid bond at 15 November of each year. As in the previous year, Alpiq again opted not to exercise this option in the 2020 financial year. The interest rate was adjusted for the first time in 2018 to reflect the market conditions prevailing at the time and since then has stood at 4.5325 %. The interest rate is adjusted to reflect prevailing market conditions every five years and therefore for the next time at 15 November 2023. In 2023 and 2043, the interest rate will be increased by an additional 25 bps and 75 bps respectively. Interest payments on the public hybrid bond can be suspended at Alpiq’s discretion. In this case, the payment of interest lapses after three years.

The interest after tax attributable to 2020 was CHF 29 million (previous year: CHF 29 million). Interest from the public hybrid bond that is attributable to the reporting year meets the criteria of a preference dividend, irrespective of whether the interest was paid or a legal obligation for the payment exists, and is deducted from the “Net income attributable to equity investors of Alpiq Holding Ltd.” for the calculation of the undiluted earnings per share. The accrued interest after tax amounted to a total of CHF 4 million at 31 December 2020 (CHF 18 million; of which CHF 4 million for the public hybrid bond). As no legally enforceable payment obligation exists, the accrued interest was not accrued as a financial liability, and was not deducted from equity. Interest payments totalling CHF 29 million occurred in 2020. Due to the equity character of the hybrid capital, these distributions were carried directly to equity (retained earnings).