Billerud has access to long-term financing for its operations, and the rights issue completed in 2009 strengthened the company’s financial position. Even with the strengthening of the Group’s financial position by the rights issue, it cannot be ruled out that, some time in the future, Billerud may need to seek additional financing, for example by raising loans or issuing new shares. Financial risk is the risk that a major borrowing requirement may arise in a tight credit market situation. Access to further financing will be affected by a number of factors, including market conditions, the general availability of credit and Billerud’s creditworthiness and credit capacity. In addition, access to further financing will be affected by any negative perceptions that customers, suppliers and lenders may acquire about Billerud’s long- and medium-term financial prospects. Disruptions and uncertainty in the capital and credit markets may also limit availability to the capital needed to operate the business. The conditions in the capital and credit markets may also limit
Billerud’s ability to pay debts when they fall due.
To ensure that the Group always has access to external financing, the finance department must ensure that short- and long-term credit commitments are available. Maximum costefficiency within established limits shall be the goal.
The lender base shall also be reasonably diversified to avoid excessive dependency on individual sources of financing. The repayment structure for loans shall be arranged such that the loan maturity in any particular year does not exceed 25% of total borrowings. Financial investments may only be made in certain types of low-risk instrument, and fixed-interest terms must not exceed six months.
According to Billerud’s financial targets, the net debt/equity ratio shall be between 0.60 and 0.90. The net debt/equity ratio at the end of 2009 was 0.29.