Vizja Press&IT www.ce.vizja.pl 99In Poland, more than 90% of electricity production is based on coal fuel. Meanwhile, the financial situation of the mining industry is quite challenging. Companies in this sector are in debt, generating losses caused by a sharp drop in coal prices and a simultaneous increase in extraction costs that result from descending into lower levels of coal deposits. At the same time, banks are reluctant to loan money because of the risk of a borrowing entity's default. Increasingly, companies are turning to bond issue to maintain their liquidity and finance development projects. However, bondholders impose conditions in the form of covenants that are often difficult to satisfy, and the strictest relate to the level of a company's indebtedness and ability-to-repay-debt financial ratios.This article discusses bond issue costs. The authors analyze the bond issue programs of three of the four mining companies operating in Poland. The fourth company did not issue any bonds. Bond issue costs are composed of interest payable to investors, issue preparation and support costs, collateralization costs, and the cost of recording and organizing the sale. The main cost involved in bond issuance is the coupon cost, which depends on the company's financial health and its level of indebtedness, the purpose of the issue, its volume, and the type and quality of the safeguards against the risk of loss of funds invested by bondholders. Bonds issued by coal mining companies are assumed mainly by banks, which demand high interest due to the poor financial condition of the issuers. In addition to interest, companies also pay a capital commitment fee, an arrangement fee and a fee for early redemption. Altogether, in relation to the costs of capital raised through a bank loan, the bond issue results in significantly higher costs of raising capital. Introduction
The ability to manage liquidity is important in any economic conditions. It assumes unique importance during a downturn and depends on management having reliable information on the company’s liquidity level. Static liquidity ratios do not provide such reliableinformation. Their high values result from high inventory levels of extracted raw materials and is not tantamount to excess liquidity.Additional information is offered by the cash cycle and its constituents – Days Inventory Outstanding, Accounts Receivable Days andAccounts Payable Days. Long cash cycles signal a shorter deferral of settlement of suppliers’ bills and a lower liquidity level. To maintain liquidity, companies must maintain higher cash balances in their accounts. Short cycles, on the other hand, may result from latepayment of invoices, which is reflected in long Accounts Payable Days. Some coal companies have very long Accounts Payable Daysand negative cash conversion cycles. This means that some of their non-current assets are financed out of current liabilities.
Rodzaje kowenantów zawartych w programach emisji obligacji w spókach węglowych WprowadzenieWyniki ekonomiczne branży górniczej w dużym stopniu uzależnione są od cyklu koniunkturalnego, a przede wszystkim od wahań cen stali, węgla i koksu. Ta cykliczność w kształtowaniu się cen surowców ma bezpośredni wpływ na potencjał realizowanych przepływów pieniężnych. Dobór odpowiednich źródeł finansowania pozyskanych we wła-ściwym czasie z optymalnymi kowenantami pozwala ograniczyć ryzyko związane z cyklicznością i jego wpływ na wyniki finansowe przedsiębiorstw.W ostatnich latach przedsiębiorstwa górnicze wybierały różne strategie finansowe, które miały niwelować skutki wahań cen surowców oraz kursów walut powodujących powstawanie deficytu środków pieniężnych. Presja spółek na obronę przed ryzykiem związa-nym z tymi wahaniami przybierała różne kierunki: od kumulowania środków pieniężnych w okresie koniunktury (strategia konserwatywna) do handlu instrumentami pochodnymi na rynkach finansowych (strategia agresywna). Ta druga praktyka nie przyjęła się szerzej w branży górniczej ze względu na to, że może ograniczać potencjalne tendencje rozwojowe, chociaż jest powszechnie stosowna w innych gałęziach przemysłu. Strategia finansowa w przedsiębiorstwach górniczych w ostatnim czasie jest związana z emisją obligacji o wysokiej rentowności na międzynarodowych rynkach długu. Instrument ten ma stanowić przeciwwagę do tradycyjnych kredytów bankowych. Powszechnie uważa się ponadto,
The issue discussed in the paper is highly relevant and topical in economic practice because of changes in the recognition of certain assets and their depreciation. The author’s research established that depreciation write-off in financial terms constitute capital comprising two components: depreciation and the tax shield effect. The non-tax shield is more important relative to other tax shields because the vast majority of entities in the raw materials industry own assets which are depreciated for the purposes of balance sheet accounting and tax accounting. As a cost depreciation, on the one hand, reduces the financial result and on the other, generates additional operating cash flows. Depreciable assets account for a large portion of coal companies’ assets. In addition, due to the implementation of IFRS 16 on leasing their share increased as did the amount of depreciation. Hence, its share in operating cash flows in Polish coal companies is slightly higher than in global companies. An overwhelming part of the additional depreciation arising from the inclusion in the assets reported in the balance sheet of assets used based on contracts of lease, lending or rental does not reduce the tax basis and does not constitute a tax shield. Consequently, it creates a disparity between the gross profit/loss and taxable income, thereby increasing the effective tax rate. An increase in the depreciation level in coal companies facilitates maintenance of liquidity and provides financing for investment projects and improves debt servicing, especially in times of declining financial result when coal prices are low.
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