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KUWAIT ENERGY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2017
49
31.
FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity risk management (continued)
The following tables detail the Group’s remaining contractual maturity for its financial liabilities (including interest).
The tables have been drawn up based on the undiscounted cash flows of financial liabilities.
Financial liabilities
Less than
1 year
Between
1 and 3
years
Between
3 and 5
years
More
than 5
years
Total
Effective
interest
rate
US$ 000’s US$ 000’s
US$ 000’s
US$ 000’s US$ 000’s
%
At 31 December 2017
Borrowings
23,750
273,750
-
-
297,500
10.6%
Obligations under
finance lease
1,192
2,086
-
3,278
5.0%
Convertible loans*
68,947
-
-
68,947
15.3%
Trade and other payables
124,058
-
-
-
124,058
-
217,947
275,836
-
-
493,783
At 31 December 2016
Borrowings
23,750
297,500
-
-
321,250
10.6%
Obligations under
finance lease
1,192
2,384
893
-
4,469
5.0%
Convertible loans*
27,250
90,574
-
117,824
15.3%
Trade and other payables
144,368
-
-
-
144,368
-
196,560
390,458
893
-
587,911
* Convertible loans cash outflow will decrease if the lender opts for converting loan into ordinary shares of the Company (see note 23).
The Group’s financial facilities are described in notes 22 and 23. The Group expects to meet its obligations from
operating cash flows (also see going concern section of note 3).
Capital risk management
The Group defines capital as the total equity and net debt of the group. Net debt is total debt less cash and cash
equivalents. The total equity comprises issued share capital (note 20), share premium, other reserves (note 21) and
retained deficit. The primary objective of the Group’s capital management policy is to safeguard the Group’s ability to
continue as a going concern while maximising the return to the shareholders through the optimisation of debt and
equity. Kuwait Energy is not subject to any externally imposed capital requirements. The Group manages its capital
structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital
structure the Group may put in place new debt facilities, issue new shares for cash, repay debt, engage in active
portfolio management or undertake other such restructuring activities as appropriate. No changes to the Group’s
capital management objectives, policies or processes were made during the year ended 31 December 2017.
The net debt to equity gearing ratio at year end was as follows:
2017
2016
US$ 000’s
US$ 000’s
Total debt (i)
407,844
385,239
Less: Cash and cash equivalents
(65,594)
(58,311)
Net debt
342,250
326,928
Equity attributable to owners of the Company
182,662
234,632
Net debt to equity ratio (%)
187.4
139.3
(i) Debt is defined as borrowings excluding accrued interest, as detailed in note 22, convertible loans as detailed in
note 23 and obligations under finance leases as detailed in note 24.