5.1 Companies sold

Compensation for the transfer of the Swiss high-voltage grid

On 3 January 2013, Alpiq transferred its share in the Swiss high-voltage grid to national grid operator Swissgrid Ltd based on provisional contribution values. It was not possible to provide a final calculation of the value of individual assets at this point in time, as proceedings relevant for the measurement were still pending. Furthermore, in the 2016 financial year, Alpiq received higher compensation for transferring its share in the Swiss high-voltage grid on account of the new ruling by the Swiss Federal Electricity Commission (ElCom) on the measurement method.

On 9 February 2021, ElCom issued rulings on the margin differences of the former company Alpiq Grid Ltd. Gösgen and Alpiq Grid Ltd Lausanne in 2011 and 2012. It also issued a ruling on their regulatory values at 31 December 2012. These rulings became legally binding in March 2021. Based on these rulings, the second measurement adjustment was made to offset the remaining difference between the amount already compensated at the transfer date and the amount ordered by the court ruling. In addition, the final value was calculated in accordance with the new ruling in 2016. The calculations for all parties providing in-kind contributions were carried out by the same independent company. The audit of the calculation and the preparation of the fairness opinion by another independent company was completed in the second half of 2021. The adjustment of the valuation of the transfer to the Swiss high-voltage grid has therefore been finalised for Alpiq.

In this context, additional sales proceeds of CHF 12 million, including margin differences in 2011 and 2012, were recorded under “Other operating income” in 2021. Interest components of CHF 5 million were recognised as interest income. In 2020, additional sales proceeds of CHF 39 million were recorded under “Other operating income” and interest components of CHF 11 million were recognised as interest income. Cash inflows from the additional sales proceeds amounted to CHF 20 million in 2021 (previous year: CHF 0 million) and are recorded under “Disposal of subsidiaries” in the statement of cash flows. In 2021, Alpiq received another part of the compensation in the form of a short-term loan receivable from Swissgrid Ltd totalling CHF 23 million. The short-term loan receivable is scheduled to be repaid and the payment of the final value in accordance with the new ruling in 2016 (expropriation compensation) of CHF 31 million is expected to be received on 3 January 2022. Cash inflows from the interest components amounted to CHF 11 million in 2021 (previous year: CHF 0 million) and are recorded under “Interest received” in the statement of cash flows.

2020: Sales

The sale of Flexitricity Ltd. to Reserve Power Holdings (Jersey) Limited, which belongs to the Quinbrook Group, was closed on 9 September 2020. The sale price amounted to CHF 18 million, which resulted in a net inflow of cash and cash equivalents of CHF 17 million. The assets and liabilities of the company were recognised as “Assets held for sale” or “Liabilities held for sale”. Alpiq had recognised an impairment loss of CHF 10 million on goodwill in 2019 in order to reduce the carrying amount to the sale price expected at that time less costs to sell. The actual sale price achieved is higher than the price expected at the end of 2019, meaning that a book gain has now been generated from the sale.

The sale of 70 % of the shares in Tormoseröd Vindpark AB to Fu-Gen (Future Generation Renewable Energy) was closed on 18 December 2020. Alpiq continues to hold 30 % of the shares in Tormoseröd Vindpark AB. Due to the remaining significant influence of Alpiq, the shares are now recognised under “Investments in partner power plants and other associates”. The sale price amounted to CHF 8 million, which resulted in a net inflow of cash and cash equivalents of CHF 8 million. The gain on disposal also comprises the remeasurement of the remaining interest at fair value of CHF 3 million.

Net cash flow from disposal

CHF million

2021

2020

Inflow of cash and cash equivalents

 

26

Selling expenses

 

– 1

Net cash flow from disposal

0

25

Gain on disposal

CHF million

2021

2020

Inflow of cash and cash equivalents

 

26

Remeasurement of the remaining shares at fair value 1

 

3

Sale of net assets

 

– 11

Selling expenses

 

– 1

Gain on disposal (before reclassification of cumulative translation adjustment)

0

17

Reclassification of cumulative translation adjustment

 

– 3

Gain on the disposal of Flexitricity Ltd. and Tormoseröd Vindpark AB in other operating income

0

14

1 Included in “Investments in partner power plants and other associates”

Assets and liabilities on the disposal date

CHF million

2021

2020

Property, plant and equipment

 

5

Intangible assets

 

6

Other non-current assets

 

1

Receivables

 

1

Total assets

0

13

Deferred income tax liabilities

 

1

Accruals and deferred income

 

1

Total liabilities

0

2

Net assets

0

11

Discontinued operations

In 2018, Alpiq sold the Engineering Services business, which comprises the Alpiq InTec Group and the Kraftanlagen Group. These operations were classified as discontinued operations. Therefore, all income and expenses in connection with this sale continue to be posted to “Earnings after tax from discontinued operations”.

As part of the sale of the Engineering Services business, Alpiq must bear any fines and costs of Kraftanlagen Energies & Services GmbH (“Kraftanlagen”; formerly 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. In the course of these proceedings, the German Federal Cartel Office imposed a fine of EUR 47.5 million, translated CHF 49 million, on Kraftanlagen in December 2019. Kraftanlagen cooperated fully with the authorities from the outset in order to support them in investigating the allegations in question. Despite extensive investigations, a law firm commissioned by Kraftanlagen to clarify the facts of the case could not find any evidence of misconduct by Kraftanlagen or the accused former employees. Kraftanlagen does not believe that it is in the wrong and refutes the allegations. This fine is justified neither by the facts nor the legal situation, which is why Kraftanlagen filed an appeal against the administrative order imposing the fine. There were no material developments in this regard in 2021. The main hearing is scheduled to take place between March 2022 and July 2022. Alpiq has recognised a provision for the expected costs associated with these proceedings.

Alpiq still deems it unlikely that Kraftanlagen will be convicted, which is why it has been decided not to record a liability for this matter.

Income statement of discontinued operations

CHF million

2021

2020

Expenses

 

– 4

Effect from reviewing the provisions for warranties and indemnification

 

3

Adjustment of the purchase price / loss on disposal

 

– 55

Earnings after tax from discontinued operations 1

0

– 56

1 No income tax was incurred on the earnings from discontinued operations.

On 22 December 2020, Alpiq and Bouygues Construction reached an out-of-court settlement in connection with diverging views on the definitive sale price. In 2020, 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. By the time the out-of-court settlement was reached, the cash outflow in connection with indemnification and warranties to Bouygues Construction came to CHF 13 million in the previous year. The cash outflow from bearing the costs in connection with the aforementioned proceedings amounted to CHF 1 million in 2021. According to the sales agreement, these payments are treated as an adjustment to the sale price. They are therefore contained in the statement of cash flows under “Net cash flows from investing activities of discontinued operations”.

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