Recapitalization of the NET4GAS

Prague, 25 July 2014 – NET4GAS is about to complete the process of optimizing its capital structure,
which comprises equity financing, bonds and bank loans. By doing so, the NET4GAS group is replacing
virtually the same amount of acquisition debt, which resulted from the change in ownership in 2013 and
which was at that time also presented to the Czech regulator, by a less expensive and more transparent
long-term capital structure.
The company publicly announced the start of this process in early April 2014 in order to comply with its
legal obligations. It also presented its new capital structure to two major rating agencies and secured
BBB investment grade credit ratings from Fitch (positive outlook) and Standard & Poor’s (stable
outlook). The credit ratings reflect NET4GAS’s strong financial position for meeting its future operational
and investment needs. Moreover, the new owners of NET4GAS, the Allianz group and Borealis
Infrastructure, have AA and AAA credit ratings, some of the highest possible. As solid and long-term
investors they have a track record of providing strong backing to the companies they own, including
“The new capital structure is based on conservative and prudent business assumptions and has been
designed in a way to maintain full financial strength for executing our planned investments in the longterm development of the transmission system,” explains Andreas Rau, Chief Executive Officer
The investment program of the company envisages capital investments totalling CZK 10 bn, similar in
size to the recently commissioned Gazelle gas pipeline. The investment program includes, among
others, the construction of the gas pipeline Moravia / Stork II with a large-scale connection to Poland.
The new capital structure of NET4GAS:
Capital provided by shareholders
CZK 14.218 bn
Bonds and bank loans
CZK 27.900 bn
Total capital
CZK 42.118 bn
The capital provided by shareholders of CZK 14.218 bn comprises of the registered capital (CZK 2.750
bn), capital contributions (CZK 0.468 bn) and a long-term loan from the company’s owners (CZK 11.000
bn), which is fully subordinated to bonds and bank loans, and which creates a long-term element in the
capital structure. The 11-billion loan is for the same amount which had been in place at NET4GAS
NET4GAS, s.r.o.
Na Hřebenech II 1718/8
140 21 Prague 4 – Nusle
Czech Republic
Tel.: +420 739 537 461
Email: [email protected]
before the transfer of the RWE’s ownership interest to Allianz and Borealis, but now has long-term
As regards the bond issue and bank credits in the total amount of EUR 1.015 bn (CZK 27.900 bn), last
week NET4GAS offered for subscription 6.5, 7 and 12-year bonds and secured bank loans repayable in
4 years. The 6.5-year bonds were placed in the Czech Republic and attracted high interest by many
Czech investors. In fact, the CZK 7.000 bn placement has been the largest corporate bond issuance
denominated in Czech crowns in the history of the Czech Republic. Such successful placement helps
the liquidity and the recognition of the Czech financial market in Europe.
Banks and bonds financing:
6.5-year bonds
CZK 7.000 bn (EUR 255 m)
7-year bonds
CZK 8.250 bn (EUR 300 m)
12-year bonds
CZK 4.400 bn (EUR 160 m)
Bank credit repayable in 4 years
CZK 8.250 bn (EUR 300 m)
CZK 27.900 bn (EUR 1,015 bn)
5-year revolving credit line
CZK 2.750 bn (EUR 100m)
In addition to the above-mentioned financial instruments, NET4GAS has the option at any time to draw
on a revolving credit line of up to EUR 100 million (CZK 2.750 bn) which can be flexibly used for capital
projects and general corporate purposes.
The resulting gearing of 2/3 of debt capital vs. 1/3 of equity is in line with the capital structure of other
gas and electricity infrastructure operators in Europe including in markets such as Germany and UK.
In configuring its capital structure, NET4GAS has taken advantage of the favourable situation in the
financial market and secured very good terms fixed for the whole duration of the bonds. NET4GAS has
thus managed to largely hedge against the risk of interest rate fluctuations.
The implementation of the new capital structure will not have any negative effect on gas bills for end
consumers in the Czech Republic.
Milan Řepka
Company Spokesman
NET4GAS, s.r.o.
Na Hřebenech II 1718/8
140 21 Prague 4 – Nusle
Czech Republic
Tel.: +420 739 537 461
Email: [email protected]
NET4GAS s.r.o. holds an exclusive licence for operation of gas transit pipelines in the Czech Republic. It is an
independent, reliable and safe operator of the Czech transport system. As an independent carrier, NET4GAS offers its
local and international partners equitable access to gas transmission system infrastructure, guaranteeing them the
necessary carrying capacity. NET4GAS operates over 3,800 km of international and domestic high-pressure gas
pipelines. With its 500 employees, NET4GAS annually transports natural gas in the volume exceeding 45 billion cubic
metres. Since the summer 2013, NET4GAS is owned by the consortium of Allianz Capital Partners and Borealis
NET4GAS, s.r.o.
Na Hřebenech II 1718/8
140 21 Prague 4 – Nusle
Czech Republic
Tel.: +420 739 537 461
Email: [email protected]