4.8 Contingent liabilities and guarantees

ANAF’s tax audit at Alpiq Energy SE

After the tax audit on the Bucharest branch of Alpiq Energy SE, Prague, the Romanian tax authority ANAF (Agenţia Naţională de Administrare Fiscală) issued the final tax assessment notice to Alpiq in September 2017 for an amount of RON 793 million (CHF 158 million) for value added tax, corporate income tax and penalties (including late payment penalties) for the assessment period 2010 to 2014. The tax assessment determined by ANAF is being contested on its merits and the amount assessed, as Alpiq is convinced that the activities of Alpiq Energy SE in Romania have always been carried out in accordance with the applicable Romanian and European rules and regulations. Alpiq’s position is supported by current assessments provided by external legal and tax experts. Alpiq filed an objection with ANAF against the tax assessment in 2017. In the main matter, ANAF supported its own view and dismissed the objection with regard to an amount of RON 589 million or CHF 117 million as being without merit, while it repealed the decision from the tax audit with regard to an amount of RON 204 million (CHF 41 million), and ordered a reassessment. Alpiq contested the decision on the appeal made by ANAF by making use of the legal means of appeal at its disposal. On 3 September 2019, the court of appeal in Bucharest endorsed Alpiq’s request that the tax assessment of RON 589 million is not enforceable until a decision has been reached by the last court of appeal.

In a ruling from 19 October 2021, the competent Romanian administrative court agreed with the reasoning of Alpiq Energy SE and revoked the decision of ANAF on the assessment in the amount of RON 589 million as unlawful. After having received the written substantiation for the court’s decision in May 2022, ANAF contested the ruling by filing an appeal with the Romanian administrative court of second instance at the end of May 2022. Alpiq Energy SE also filed an appeal on part of the reasoning. The first court hearing for the second appeal phase is scheduled for December 2023.

The reassessment with regard to the amount of RON 204 million (CHF 41 million) will not take place until there is a final ruling in the proceedings concerning the amount of RON 589 million. In separate proceedings, Alpiq Energy SE claimed compensation for damage caused by the illegal precautionary measures order following ANAF’s request, as well as part of the bank guarantee costs. On 12 December, 2022 the court accepted Alpiq Energy SE’s damage claim and awarded Alpiq Energy SE RON 10 milion as damages caused by the issuance of tax as well as court fees amounting to RON 0.1 million. ANAF is expected to appeal this verdict and Alpiq Energy SE is also planning to file a supplementation request and or an appeal, therehus no receivable was recognised.

Compensation review proceedings against Alpiq Holding Ltd.

In 2020, appraisal claims were filed against Alpiq Holding Ltd. by the two investors Knight Vinke (KVIP International V L.P.) and Merion Capital (Merion Capital LP, Merion Capital ERISA LP and Merion Capital II LP) pursuant to Sec. 105 of the Swiss Merger Act (FusG). The claims seek a review of the compensation of CHF 70.00 per share approved by the Annual General Meetings of Alpha 2020 AG (current Alpiq Holding Ltd.) and former Alpiq Holding AG (“Former Alpiq”) and paid to minority shareholders of in the squeeze-out merger in 2020.

In February 2023, Alpiq Holding Ltd. and Merion Capital reached an out-of-court settlement and Merion Capital withdrew their appraisal claim in the proceedings started at the Chambre patrimoniale cantonale of Canton of Vaud, Switzerland and waived any right to claim any additional payment from Alpiq in relation to Merion’s shares acquired as part of the squeeze-out merger.

The proceeding initiated by Knight Vinke is continuing, whereby Knight Vinke is seeking a compensation based on a value per share amounting to at least CHF 140. This would correspond to additional aggregate compensation of around CHF 73 million to be paid by Alpiq Holding Ltd. to all relevant minority shareholders (excluding Merion Capital). The proceeding is currently pending in the competent court of Canton of Vaud. A first instance ruling is not expected before 2024.

In the context of the voluntary public purchase offer by SKBAG, PricewaterhouseCoopers (PwC) was engaged as an independent expert to prepare and submit a fairness opinion on the appropriateness of the offer price from a financial perspective. At the time, PwC concluded that the offer price is fair and appropriate from a financial perspective. In connection with the squeeze-out merger, Alantra Ltd. was engaged to compile an independent valuation report for the members of the Board of Directors of Alpiq Holding Ltd. (Former Alpiq) and Alpha 2020 Ltd. (current Alpiq Holding Ltd.). The valuation report of Alantra determined a value range of CHF 63.30 to CHF 72.50 per share in Former Alpiq and therefore confirmed that the agreed compensation of CHF 70 per share is appropriate.

Other matters

Alpiq is currently in negotiations with a contracting party regarding the termination of a long-term energy sales contract, as Alpiq is of the opinion that this contract is no longer valid given the current market conditions. If a settlement agreement can be agreed on by both parties, this would result in recognition of a liability in the amount of CHF 20 to 25 million. If no agreement can be reached, it cannot be ruled out that the other party will take legal action.

There were no significant contingent liabilities from pledges, guarantees and other commitments to third parties in favour of third parties at the reporting date, as was also the case at 31 December 2021. For additional obligations in connection with partner power plants, please see note 4.3. Contingent liabilities in connection with the sale of the Engineering Services business can be found in note 5.1.