The Company is committed to a balanced liquidity management strategy to support and develop its operations. Its primary liquidity sources are cash and liquid financial instruments, as well as guaranteed and non-guaranteed credit facilities.
When defining optimal debt level, the Company targets the Net debt1/ EBITDA2 ratio of 0.5–1.0.
The Company also seeks to minimise the Weighted average cost of capital (WACC)3 through an optimum debt to equity balance.
To minimise the cost of borrowing, the Company seeks to remain active in debt capital markets and meet its target financial and economic metrics required to maintain an investment-grade credit rating (BBB- or above as per S&P rating agency scale), including the Net debt / EBITDA ratio at 1.5 or below.
Key borrowing terms are:
- currency – the Company seeks to find balance between decreasing currency risk and optimizing cost and maturity of debt;
- the target range for weighted average maturity – 3-4 years.
1 Net debt is total debt less cash and cash equivalents, as well as bank deposits.
2 EBITDA stands for the Group’s earnings or loss for the last 12 months adjusted for income tax expenses, financial income and expenses, share of net profit of associates and joint ventures, depreciation and amortisation, impairment and disposals of property, plant and equipment, gain or loss on disposal of joint ventures, revaluation of investments, and one-off items.
3 Weighted average cost of capital (WACC) is the cost of equity and debt used to finance the Company's activities.