TenneT Holding announced a new funding structure to separate its Dutch and German operations, forming two independent entities financed separately, according to an April 18 statement.
“The new funding structure is part of TenneT’s exploration of structural solutions for the equity needs of its German operations. Currently, TenneT raises all debt financing centrally at the holding level,” the company noted.
TenneT has created TenneT Netherlands, a wholly-owned subsidiary that will act as the holding company for the Dutch transmission system operator (TSO). This reorganization means future senior debt financing for the Dutch TSO will be managed by TenneT Netherlands, while TenneT Germany will handle its own financing.
Additionally, TenneT plans to transition existing senior debt from TenneT Holding to TenneT Netherlands. They will seek consent from noteholders and engage with other financiers to facilitate this debt transfer. This move aims to protect the interests of senior debt holders and avoid structural subordination due to the anticipated debt issuance by both TenneT Netherlands and TenneT Germany.
The Dutch government is expected to provide an irrevocable and unconditional institutional guarantee for TenneT Netherlands, covering current and future debt obligations, as confirmed by TenneT Holding.
The state guarantee is pending approval from the Dutch parliament.
TenneT anticipates implementing the debt transfer in October 2025, contingent on bondholder consent. If consent is insufficient, the debt transfer will not proceed, the company stated.
If the debt transfer doesn’t proceed, TenneT will cease preparations for TenneT Germany’s equity needs through third-party investment and will continue to supply all equity to TenneT Germany, supported by the Dutch state.
The reorganization and planned debt transfer are fully endorsed by the Netherlands, TenneT’s sole shareholder, according to both TenneT and the Dutch government.
“As the sole shareholder of TenneT, we fully endorse the steps to separate the Dutch and German operations. We are confident that the new funding structure, supported by the state guarantee, will provide TenneT Netherlands with a strong financial foundation to continue investing in the Dutch electricity grid, while enabling separate funding for TenneT Germany,” said Eelco Heinen, Dutch Minister of Finance.
TenneT has aimed to sell TenneT Germany since 2023, initially planning for the German state to assume control of the German TSO.
Since January 1, 2025, TenneT operates as two entities, one in the Netherlands and one in Germany, under TenneT Holding, aiming to attract private investment into TenneT Germany.
On January 2, TenneT announced that negotiations with the German state, represented by KfW, were terminated due to Germany’s budgetary challenges.
In March, Reuters reported that TenneT remained open to the German state taking a stake in TenneT Germany or considering a stock exchange listing for the German TSO to raise capital.
Original Story at www.offshorewind.biz