Epiroc’s financial risk management is centralized to benefit economies of scale, to ensure good internal control and to facilitate monitoring of risk.
The central treasury function is responsible for the Group’s borrowing, liquidity management, currency and interest rate risk management, and serves as an internal bank for the Group.
Debt is primarily raised by the parent company Epiroc AB and transferred to subsidiaries as internal loans or capital injections. Financing is also undertaken locally, in countries which there are legal restrictions preventing financing through Group companies.
As per end of September 2019, the long-term financing consists of capital market borrowings of MSEK 2 000 (maturity in 2023), a loan facility from Swedish Export Corporation (SEK) and Svenska Handelsbanken (SHB) of MSEK 2 000 (maturity 2023, with two one year extension options), a loan from the European Investment Bank (EIB) of MEUR 100 (maturity 2022) and a loan facility with Nordic Investment Bank (NIB) of MSEK 1 000 (maturity 2027).
A revolving credit facility (RCF), of MSEK 4 000, is available to be used for general corporate purposes and as a backup facility. The maturity is 2024 with the addition of a one-year extension option, exercisable at the anniversary of the RCF, subject to the consent of the lenders. The facility was entered into by Bank of China, Citibank, Danske Bank, Deutsche Bank, Nordea, Skandinaviska Enskilda Banken, Standard Chartered Bank, and Svenska Handelsbanken. The Group also have a Swedish commercial paper program available, with a framework amount of MSEK 2 000.
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1) Including lease liabilities |