Annual Report 2020

Notes to the Financial Statements

1 Preliminary note

1 Preliminary note

Squeeze-out merger

On 24 June 2020, the Annual General Meeting of Alpiq Holding Ltd. (UID no. CHE‑100.032.288) 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. with retroactive effect from 1 January 2020, assuming all assets and liabilities at their previous carrying amount. On the same day, Alpha 2020 Ltd. was renamed Alpiq Holding Ltd. The merger became legally effective upon entry in the Swiss commercial register on 26 June 2020.

These financial statements contain the 2020 financial year and the balance sheet of the “new” Alpiq Holding Ltd. (UID no. CHE‑369.267.193) at 31 December 2020. The previous-year figures disclosed in italics relate to the “former” company Alpiq Holding Ltd. (UID no. CHE‑100.032.288), which ceased to exist following the merger. They are only included for comparative purposes to provide the reader of the balance sheet a more comprehensive overview.

Basis of preparation

The financial statements of Alpiq Holding Ltd., Lausanne, have been prepared in accordance with the provisions of Swiss accounting legislation (Title 32 of the Swiss Code of Obligations). As in the previous year, of the former company Alpiq Holding Ltd., the company employed no staff during the financial year.

The following section describes the main valuation principles applied that are not specified by law.

Securities

Securities held in current assets are measured at the market price on the reporting date. No fluctuation reserve is recognised.

Loans receivable / hedges

Loans receivable that are denominated in foreign currencies are measured at the closing rate on the reporting date, whereby unrealised losses are recognised, and unrealised gains are not reported. In the case of derivatives deployed in hedges, too, unrealised losses are recognised, but unrealised gains are not recognised.

Investments

The investments are generally measured individually. The only exceptions are the investments in Alpiq Ltd. and Alpiq Suisse Ltd., which have been tested for impairment by way of group measurement since 2017, as these companies form an economic unit. Since 2017, Alpiq Suisse Ltd. has operated as a meta partner power plant that sells its energy to Alpiq Ltd. at production cost.

Bonds

Bonds are recognised at face value. The discount and issue costs of bonds are recognised as finance costs in the issue year. Any premium (less issue costs) is recognised as a deferred credit and amortised on a straight-line basis over the bond’s maturity.

2 Dividend income

2 Dividend income

Dividend income comprises dividends received from subsidiaries.

3 Finance income

3 Finance income

CHF million

2020

2019 1

Interest income from group companies

34

41

Other finance income from group companies

2

3

Other finance income from third parties

1

3

Foreign exchange gain

147

131

Total

184

178

1 Previous-year figures for information purposes only; for more information, see note 1

4 Finance costs

4 Finance costs

CHF million

2020

2019 1

Interest expense to group companies

– 32

– 29

Interest expense to third parties

– 50

– 54

Other finance costs to third parties

– 3

– 4

Foreign exchange loss

– 144

– 105

Total

– 229

– 192

1 Previous-year figures for information purposes only; for more information, see note 1

5 Loss on sale of investments

5 Loss on sale of investments

In 2018, Alpiq sold the Engineering Services business, which comprises the Alpiq InTec Group and the Kraftanlagen Group. There were diverging views on the definitive sale price between Alpiq and Bouygues Construction. In order to enforce their claims arising from the price adjustment mechanism, both parties therefore filed for arbitration proceedings pursuant to the arbitration regulations of the Swiss Chambers’ Arbitration Institution on 12 February 2019. On 22 December 2020, Alpiq and Bouygues Construction reached an out-of-court settlement. Alpiq refunded CHF 54.5 million to Bouygues Construction. The arbitration proceedings, which were simultaneously initiated by both parties on 12 February 2019, therefore came to an end. For more information about this matter, please refer to note 5.2 of the consolidated financial statements.

6 Trade receivables

6 Trade receivables

CHF million

31 Dec 2020

31 Dec 2019 1

Due from group companies

 

1

Total

0

1

1 Previous-year figures for information purposes only; for more information, see note 1

7 Other current receivables

7 Other current receivables

CHF million

31 Dec 2020

31 Dec 2019 1

Due from group companies

110

171

Due from third parties

548

567

Total

658

738

1 Previous-year figures for information purposes only; for more information, see note 1

Other current receivables comprise cash pool balances, loans and non-current term deposits with a maximum term of 12 months as well as VAT and withholding tax receivables.

8 Loans receivable and non-current term deposits

8 Loans receivable and non-current term deposits

CHF million

31 Dec 2020

31 Dec 2019 1

Due from group companies

833

855

Total

833

855

1 Previous-year figures for information purposes only; for more information, see note 1

9 Investments

9 Investments

A list of direct and significant indirect investments is disclosed in note 5.4 of the notes to the consolidated financial statements.

10 Current interest-bearing payables

10 Current interest-bearing payables

CHF million

31 Dec 2020

31 Dec 2019 1

Due to group companies

512

457

Due to third parties

194

50

Total

706

507

1 Previous-year figures for information purposes only; for more information, see note 1

Current interest-bearing payables include cash pooling payables, maturing bonds and loans payable with a maximum 12-month term.

11 Provisions

11 Provisions

Provisions include a provision for the recapitalisation of Alpiq Deutschland GmbH that may become necessary. They also contain a provision for the expected legal costs in connection with the two compensation review proceedings pursuant to Art. 105 of the Swiss Merger Act (FusG) filed against Alpiq Holding Ltd. With these proceedings, former shareholders are seeking a judicial review of the compensation paid by Schweizer Kraftwerksbeteiligungs-AG (SKBAG) in connection with the squeeze-out merger. On account of the facts and circumstances known at that time, Alpiq Holding Ltd. considers it unlikely that this litigation will result in a negative outcome for the company. For more information about this matter, please refer to note 4.8 of the notes to the consolidated financial statements.

12 Interest-bearing loans payable

12 Interest-bearing loans payable

CHF million

31 Dec 2020

31 Dec 2019 1

Due to shareholders (hybrid loan)

 

367

Due to group companies

860

860

Due to third parties

 

50

Total

860

1,277

1 Previous-year figures for information purposes only; for more information, see note 1

The loans payable “Due to group companies” have a remaining maturity of between one and three years. The shareholder hybrid loan was converted into equity (see note 14).

13 Bonds

13 Bonds

CHF million

Maturity

Earliest repayment date

Interest rate in %

Face value at 31 Dec 2020

Face value at 31 Dec 2019 1

Fixed-rate bond issued by Alpiq Holding Ltd. 2

2011 / 2021

20 Sept 2021

2.2500

144

144

Fixed-rate bond issued by Alpiq Holding Ltd.

2012 / 2022

16 May 2022

3.0000

145

145

Fixed-rate bond issued by Alpiq Holding Ltd.

2015 / 2023

30 Jun 2023

2.1250

141

141

Fixed-rate bond issued by Alpiq Holding Ltd.

2014 / 2024

29 Jul 2024

2.6250

260

260

Public hybrid bond issued by Alpiq Holding Ltd.

15 Nov 2021

4.5325

650

650

1 Previous-year figures for information purposes only; for more information, see note 1

2 At 31 December 2020 recognised under “Current interest-bearing payables”.

14 Equity

14 Equity

 

 

 

 

 

 

CHF

Share capital

Capital contribution reserves

Statutory revenue reserves

Retained earnings

Total equity

Balance pursuant to founding balance sheet 1

278,746

 

 

 

278,746

Effects of the squeeze-out merger 2

 

1,378,132,670

 

1,526,081,136

2,904,213,806

Conversion of shareholder hybrid loan 3

52,358

366,447,692

 

 

366,500,050

Net income

 

 

 

– 119,857,413

– 119,857,413

Balance at 31 December 2020 4

331,104

1,744,580,362

0

1,406,223,723

3,151,135,189

1 Full cash contribution of share capital upon foundation

2 For more information, see note 1

3 The Extraordinary General Meeting on 29 October 2020 approved conversion of the shareholder hybrid loan into equity. The conversion into Alpiq shares was made by means of an ordinary share capital increase with a contribution by offsetting.

4 The capital contribution reserves after converting the hybrid loan from the shareholders have not yet been acknowledged by the Swiss Federal Tax Administration.

15 Collateral provided for third-party liabilities

15 Collateral provided for third-party liabilities

Guarantees in favour of group companies and third parties totalled CHF 592 million at 31 December 2020 (previous year of the former company Alpiq Holding Ltd.: CHF 642 million). Of this, an amount of CHF 303 million (CHF 314 million) relates to bank guarantees – of which CHF 2 million expired at 31 December 2020 – and CHF 289 million (CHF 328 million) to guarantees issued by Alpiq Holding Ltd.

16 Contingent liabilities

16 Contingent liabilities

As part of the sale of the Engineering Services business, Alpiq Deutschland GmbH, for which Alpiq Holding Ltd. has subsidiary liability, must bear any costs of Kraftanlagen München GmbH resulting from the proceedings started by the state prosecutor of Munich I and the German Federal Cartel Office in the first quarter of 2015. Kraftanlagen München and Alpiq continue to deem a conviction unlikely and Alpiq has therefore decided not to record a liability for this matter. For more information about this matter, please refer to note 5.2 of the notes to the consolidated financial statements.

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