39 JOTUN GROUP 15 FUNDING AND BORROWINGS The Jotun Group’s policy is to have sufficient long-term loan and committed credit facilities to cover expected financing needs with an additional strategic reserve of five per cent of consolidated sales. Commercial papers and money markets are used as a source of liquidity when conditions in these markets are competitive compared to drawing on committed long-term credit facilities. As of 31 December 2016, there were no drawings on these credit facilities. Jotun Group’s main sources of financing are loans in the Norwegian Bond market and bilateral loans from the Group’s relationship banks. The term to maturity for new loans and credit facilities is normally 5–10 years. In 2016 the Jotun Group has reduced its bond funding from NOK 1 300 million to NOK 1 000 million. The Group’s bilateral loan with the Nordic Investment Bank (NIB) of USD 120 million is maintained. The table below gives an overview of both total interest-bearing debt and net interest-bearing debt. BOOK VALUE* (NOK THOUSAND) 31.12.2016 31.12.2015 CURRENCY COUPON TERM NON-CURRENT INTEREST-BEARING LIABILITIES Bonds Bond 2014-19 600 000 600 000 NOK NIBOR + 0.9% 2019 Bond 2014-21 400 000 400 000 NOK Fixed rate 3.85% 2021 Bank debt (NIB), unsecured 1 035 624 1 056 744 USD US LIBOR + 1.2% 2024 Bank debt Oman, pledge in tangible assets 217 181 145 433 OMR Oman BLR - 9.5% 2019 Bank debt BNDES Brazil, secured with bank guarantee 96 072 104 839 BRL TJLP + 1.8% 2021 Other bank debt, unsecured 154 346 157 489 Total 2 503 224 2 464 506 of this current liabilities (first year’s repayment) –146 121 –140 994 Total non-current interest-bearing liabilities 2 357 102 2 323 512 CURRENT INTEREST-BEARING LIABILITIES Bond 2013–16 – 300 000 NOK NIBOR + 1.2% 2016 Certificate loans, unsecured 200 000 – NOK 1.62% 2017 Credit line facilities 29 072 14 616 Bank loans, maturity < 1 year 146 121 140 994 Other loans 502 158 498 765 Total current interest-bearing liabilities 877 352 954 374 Total interest-bearing liabilities 3 234 454 3 277 887 Non-current interest-bearing receivables 125 415 165 557 Cash and cash equivalents 1 586 034 1 520 840 Net interest-bearing liabilities 1 523 005 1 591 490 * The fair value of interest-bearing assets and liabilities in the table above is equal to the respective book values. BANK DEBT OMAN, PLEDGE IN TANGIBLE ASSETS The interest rate tied to the bank loan in Oman is based on the Base Lending Rate (BLR) as made public by the local central bank, less 9.5 percentage points. The loan is secured by a first charge over certain of Jotun Paints Co. L.L.C.’s (Oman) land and buildings with a carrying value of NOK 318 million (2015: NOK 154 million). BANK DEBT BNDES BRAZIL, SECURED WITH BANK GUARANTEE The nominal interest rate related to the BNDES loan in Brazil is at a rate defined by the government (TJLP), and is below the local market interest level. NON-CURRENT INTEREST-BEARING RECEIVABLES Non-current interest-bearing receivables consists mainly of other financial assets like prepayment of lease and, as a part of the Decorative strategy, financing of Multicolor machines in selected markets.
Jotun Annual Report 2016
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