Note 12 Equity
The company’s authorised capital is divided into 350 million shares of €5 nominal value. As at year-end 2018, 136,794,964 shares were in issue (2017: 136,794,964).
Subordinated perpetual bond loan
On 29 January 2018, Alliander announced the intention to issue a new subordinated perpetual bond loan. At the same time, an offer was made for all the outstanding bonds of the €500 million perpetual bond loan bearing the coupon interest rate of 3.25% issued on 27 November 2013, conditional upon the successful issue of the new loan. Subsequently, on 30 January, €500 million in new subordinated perpetual bonds was successfully issued at a coupon rate of 1.625% and an issue price of 99.144%. By the offer closing date of 5 February, applications were found to have been received from investors for repurchase by Alliander of bonds totalling approximately €413 million from the 2013 issue. The remaining portion of the loan issued in 2013 was redeemed on 27 November 2018. The carrying amount of the hybrid instrument as at 31 December 2017 was €496 million. As a result of this transaction, including paid surplus and expenses, equity has decreased by €1 million.
This subordinated perpetual bond loan is treated as equity. Alliander does not have any contractual obligation to repay the loan. Any periodical payments on the loan are conditional and depend on payments to shareholders. As and when resolutions are passed making distributions to shareholders, the Management Board will also pay any arrears of the contractual coupon interest to the holders of the subordinated perpetual bond loan out of other reserves. The annual amount of the interest payable is €8 million.
The revaluation reserve is connected with the bond investments. Following the implementation of IFRS 9, the revaluation reserve ceased to be applicable with effect from 1 January 2018.
The other reserve includes an amount of €1 million after tax relating to a defined-benefit pension plan for employees of our activities in Germany. The revaluation reserve and the subordinated perpetual bond loan are not freely distributable.
On 10 July 2012, Alliander acquired a 95% interest in Indigo B.V. This company is a partnership between Alliander and the City of Nijmegen (which has an interest of 5%) to construct a heat transport pipeline from the regional waste-to-energy plant Afvalverwerking Regio Nijmegen (ARN) to the district heating network of Nuon Energy. As at the end of the reporting period, the shareholders’ equity of Indigo BV amounted to €3.8 million. In accordance with the basis of Alliander’s consolidation, Indigo BV has been consolidated in full with separate disclosure of a non-controlling interest in the consolidated equity. In 2016, Alliander acquired a 95% interest in Warmtenet Hengelo B.V., a company which is developing a district heating system, the first phase of which was commissioned in 2017. The shareholders’ equity of this company as at year-end 2018 amounted to €0.3 million negative. In 2017, Alliander acquired a 75% interest in Warmte-Infrastructuur Limburg Geothermie B.V. As at the end 2018, the shareholders’ equity of this company amounted to €2.3 million. However, the amount of these non-controlling interests, means that they are not visibly accounted for on the face of the balance sheet as at year-end 2018