In 2020, the KGHM Polska Miedź S.A. Group was fully capable of meeting its obligations associated with contracted liabilities. The cash and cash equivalents held by the Group along with the secured external financing ensure that liquidity will be maintained and enable the implementation of its investment plans.
As at 31 December 2020, the Group held PLN 2,501 million of free cash and cash equivalents and had open credit lines for total available financing of PLN 13,145 million, out of which PLN 6,679 million had been drawn.
In 2020, the Group continued activities aimed at ensuring long-term financial stability by basing the financing structure on diversified, long-term sources of financing.
In December 2020 the Parent Entity took advantage of the option to extend by 1 year the term of the unsecured revolving syndicate facility agreement in the amount of USD 1,500 million (PLN 5,638 million) concluded in 2019. As a result of the decision of Syndicate Participants, the available limit of funds under the granted financing during the extension period will amount to USD 1,438 million (PLN 5,405 million).
In addition, in 2020 efforts were continued to optimize the financial liquidity management process through focusing on efficient working capital management. The Group uses factoring and reverse factoring resulting in shortening the days receivable cycle and extending the days payable cycle. As at 31 December 2020, the balance of trade receivables transferred to reverse factoring amounted to PLN 1,264 million.
Under the unsecured syndicated credit facility, the two bilateral bank loans and the investment loans from the European Investment Bank, the Group is obliged to maintain the financial covenant at specified level. At the balance sheet date, during the financial year and following the balance sheet date, as at the date of this report, the level of the reportable financial covenant as at 30 June 2020 and 31 December 2020 complied with the provisions of the agreements.