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 148 million) for value added tax, corporate income tax and penalties (including late payment penalties) for the assessment period 2009 to 2014. In addition, Alpiq would have to pay interest for late payments of RON 216 million (CHF 40 million) from 2017 up to 2023. The tax assessment determined by ANAF is being contested both on its merits and with respect to 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 administrative appeal with ANAF´s appeal body against the tax assessment in 2017. In the main matter, ANAF´s appeal body supported the audit team´s view and dismissed the administrative appeal with regard to an amount of RON 589 million, or CHF 110 million, as being without merit, while it repealed the decision from the tax audit with regard to an amount of RON 204 million (CHF 38 million), and ordered a reassessment which has been suspended by ANAF until the court assessment relating to the amount of RON 589 million will become final. Alpiq contested the decision on the administrative appeal made by ANAF by making use of all legal means of appeal at its disposal. Based on motions filed by Alpiq, the Supreme Court in Bucharest ruled 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 meritorious ruling of 19 October 2021, the competent Romanian administrative court agreed with the reasoning of Alpiq Energy SE and revoked the underlying decisions of ANAF on the assessment of the complete amount of RON 793 million as unlawful. After receiving the written substantiation for the court’s decision in May 2022, ANAF contested the ruling by filing an appeal with the Romanian Supreme Court 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 took place in December 2023. A second hearing was requested by the Supreme Court and is scheduled for 15 February 2024. The Supreme Court´s decision is expected in the second quarter of 2024.

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 its 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 about 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. As a next step in the proceeding, Alpiq will file its response to Knight Vinke’s statement of claim in Q1 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 was 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 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 discussions with a contracting party regarding the termination of a long-term energy sales contract, as Alpiq considers this contract to be null and void. The negotiations are at an early stage and a possible settlement amount cannot yet be reliably estimated.

In the previous year Alpiq was in negotiations with a contracting party regarding the termination of a long-term energy sales contract, as Alpiq was of the opinion that the contract was no longer valid. In 2023, a settlement agreement was reached that resulted in the recognition of a provision in the amount of CHF 34 million.

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 2022. 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.