22. Group equity
Share capital
Stedin Holding N.V.’s authorised share capital is € 2 billion, divided into 15 million ordinary shares and 5 million cumulative preference shares with a nominal value of € 100 each, as well as one N1 share and one N2 share with a nominal value of € 100 each. As at 31 December 2023, 5,642,732 ordinary shares, 416,068 cumulative preference shares, one N1 share and one N2 share were issued and fully paid up (2022: 4,970,978 ordinary shares, 416,068 cumulative preference shares, nil N1 and N2 shares).
As at 8 December 2023, 671,754 ordinary shares and one N1 share were issued to the State. In addition, one N2 share was issued to the municipality of Rotterdam. The N1 and N2 shares are non-participating and were introduced to allow the Dutch State (N1 shareholder), on the one hand, and the municipality of Rotterdam (N2 shareholder), on the other, to exercise special control over specific decisions as representatives of the Shareholders’ Committee (see Governance for more information). The € 4 million transaction costs associated with share issue were charged directly to retained earnings in equity.
Share premium reserve
Stedin Holding N.V. raised € 500 million in additional equity in December 2023 to strengthen its equity position through the issue of 671,754 ordinary shares. In addition to the nominal value of € 100 per share, this entails a share premium of € 644.32 per share, with a total share premium amount of € 433 million. Stedin Holding N.V. subsequently contributed the full € 500 million as share premium to subsidiary Stedin Netbeheer B.V.
The share premium reserve at the end of 2023 was € 591 million, of which € 433 million (2022: € - million) related to the ordinary shares and € 158 million to the cumulative preference shares (2022: € 158 million).
Cash flow hedge reserve
The cash flow hedge reserve is not freely at the disposal of the shareholders. More information on the changes and the underlying hedging relationships is provided in 32.4 Derivatives and cash flow hedge reserve.
Other statutory reserves
A statutory reserve is included in group equity for the amount of the capitalised development costs within the intangible assets. In addition, a statutory reserve for associates has been recognised if and to the extent that Stedin Holding is unable to make distributions from the equity of associates without restrictions.
Preference dividend reserve
In 2021, Stedin issued cumulative preference shares on which a fixed percentage dividend is required to be distributed or reserved each year. The rate for the current regulation period is 3%. The distribution of this preference dividend is at the discretion of the Board of Management, subject to the approval of the Supervisory Board. If it is not distributed, the preference dividend is taken to a separate reserve. An amount of € 6 million was distributed in 2023 (2022: € 6 million). As at 31 December 2023, the preference dividend reserve was € - million (2022: € - million).
Perpetual subordinated bond loan
On 23 March 2021, Stedin Holding N.V. issued a perpetual subordinated bond loan (‘Perpetual Fixed Rate Reset Securities’) with a total nominal amount of € 500 million at an annual coupon interest of 1.5% and an issue price of 100%. This resulted in net proceeds of € 500 million. The bonds are listed on Euronext Amsterdam. On 31 December 2023, the fair value was € 447 million. The book value as at year-end 2023 was € 506 million, which is the nominal principal amount including € 6 million in accrued compensation.
The perpetual subordinated bond loan qualifies as an equity instrument and is subordinated to all of Stedin Group’s creditors but has certain preferences over the shareholders in the event of the company being liquidated. Stedin Holding N.V. has no contractual obligation to redeem the loan. Any payment of current or deferred coupon interest is conditional and dependent on distributions to shareholders. Consequently, the bondholders cannot force Stedin Holding N.V. to pay the coupon interest or to redeem all or part of the loan.
