Financing and covenants
Nordzucker AG signed a five-year syndicated loan agreement with its main banks in 2011, which secured the financing of the Group. This loan was renegotiated in the last quarter of the 2013/2014 financial year. In March 2014, Nordzucker then signed a new contract with the banks. This loan gives the company much greater latitude for entrepreneurial activities than the previous arrangement. It initially runs for a period of five years.
Both the previous loan and the new agreement include financial covenants. These consist of obligations to maintain certain financial ratios over the entire term of the loan.
The covenants are an essential component of the loan agreement. Banks use them as a tool to identify and avoid risks at an early stage by drawing conclusions from the figures about the company’s financial position. They have been defined for the Group as a whole.
Compliance with the covenants of the syndicated loan agreement is monitored internally on a regular basis and reported to the banks at defined intervals during the reporting year. In the reporting year, all the financial criteria were met on all test dates. On the basis of the planning currently available for the Group, the Executive Board of Nordzucker AG assumes that the agreed limits will also be adhered to in future.