Financing Overview

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Funding sources

The Group uses several sources of long-term loan capital, whereof banks and bond markets are the most important. External borrowing is centralised at the parent company level, and capital needs in subsidiaries are mainly covered by internal loans, or equity. The capital structure in subsidiaries is adapted to commercial, as well as legal and tax considerations. The short-term liquidity of Group companies is managed at Group level through cash pools.

Orkla’s main funding sources are bilateral loans from Orkla’s relationship banks and loans in the Norwegian bond market. The Group Treasury also continuously evaluates other funding sources. The term to maturity for new loans and credit facilities is normally 5–10 years.

An overview of the Group’s funding as of 31.12.19 is shown below.

Skjermbilde

Covenants

Orkla has no loan agreements with financial covenants for the Group or for Orkla ASA. The loan agreements include some limitations on disposals of businesses, creation of security interest on assets, borrowing at subsidiary level, and cross default clauses. As of 31.12.19, debt secured by pledges amounted to NOK 101 million, whereas the book value of pledged assets was NOK 194 million. The Group’s total guarantee commitments amounted to NOK 70 million. Bonds issued in the Norwegian bond market are listed on the Oslo Stock Exchange.

Credit rating

Orkla has no official credit rating, but actively monitors quantitative and qualitative measures which affect the creditworthiness of the Group.

Bonds

Bond Agreements and Prospectuses regarding outstanding bonds