Alderman Victor Everhardt (Finance, Participations) and Marieke van Doorninck (Sustainability) made that decision. Of the 73 million euros in tax money that will appear in AEB’s account, AEB will then immediately pay 35 million euros to a consortium of banks. AEB has built up considerable debt with those banks, partly due to major problems that arose in the summer of 2019. Years of overdue maintenance meant that many waste incinerators had to be shut down because safety for staff and environment could not be guaranteed. There was even a national waste crisis.
The municipality is now taking over 50 percent of the shares that AEB currently has in Westpoort Warmte at the market rate of 73 million euros. “With the amount paid, AEB repays part of the bank loan amounting to € 35 million, as well as the aid of € 35 million provided by the municipality and the interest accrued on it in installments. The spread over time of the repayments ensures AEB of sufficient liquidity for the coming period. In addition, the financing banks of AEB are suspending part of the repayments that AEB should make in 2020 and 2021 and are adjusting the covenants and the repayment schedule. Furthermore, the municipality will agree to add the interest on the subordinated loan from the municipality to the principal amount of the loan until the end of 2022. This financing proposal ensures that AEB can once again meet the requirements of the banks. This will create financial peace and space for AEB for the coming period ”, the aldermen write in a letter to the municipal council.
Natural gas free
According to the Amsterdam city council, the decision to take over the shares in the heating networks from AEB is important to get Amsterdam off natural gas as early as 2040. “In the light of the energy transition and ambitions of the municipality of Amsterdam, it is desirable to maintain the interest in WPW through direct shareholdership in WPW, at least for now. A grip on the pace and the correct interpretation and use of the heat network can largely determine the success of the Amsterdam ambitions. ”
With the step to buy shares, the municipality prevents the European Commission (EC) from putting a stop to further state aid. Shortly after the summer, the EC already informed the municipality that in its view the submitted AEB restructuring plan still needed to be adjusted with a more certain contribution from the company and its financiers to compensate for the aid granted. The EC has requested that the plan be adjusted accordingly.
But because more flexible rules have come into effect in the Netherlands for repayment of the tax debt due to corona, the tax debt that AEB has also accrued may be repaid over a period of three years from June next year. “This means that AEB no longer has an acute liquidity need.” That debt, too, must eventually be paid. “The measure does provide the necessary breathing space for AEB.” The amount involved is not stated. The current decision to sell the shares of WPW has also been submitted to the European Commission.
Consequences of corona crisis
The city council will also be informed next Friday about the consequences of the corona crisis on the waste processing company, the condition of the technical installations, new insurance, the commissioning of the biomass plant and pending millions of claims that have still been submitted to AEB. According to the city council decides to sell AEB or not. According to the commission, a due diligence investigation shows that AEB “is back in control and the maintenance of the waste processing installations has improved.” The municipality states that from the “perspective of the company there are no legal, technical, financial or other issues in the way of a sales process.”
“This revised plan confirms the upward trend we are in,” says AEB CEO Paul Dirix. “We are in much better shape than in the summer of 2019. We are ready to sell.”