Capital structure management
The capital structure management seeks to safeguard the ongoing business operations, to ensure flexible access to capital markets and to secure adequate funding at a competitive rate. Capital structure management at Valmet comprises both equity and interest-bearing debt. As of December 31, 2019, Total equity was EUR 1,046 million (EUR 949 million) and the amount of interest-bearing debt was EUR 207 million (EUR 201 million).
Valmet has not disclosed any long-term financial ratio target for its capital structure. However, the objective of Valmet is to maintain strong capital structure in order to secure customers’, investors’, creditors’ and market confidence. The capital structure is assessed regularly by the Board of Directors and managed operationally by Treasury. Loan facility agreements include customary covenants and Valmet is in clear compliance with the covenants as at December 31, 2019.
Valmet has no credit rating at December 31, 2019.
| EUR million | As at Dec 31, 2019 | As at Dec 31, 2018 |
| Interest-bearing debt | 207 | 201 |
| Cash and cash equivalents | 316 | 376 |
| Interest bearing financial assets | 42 | 44 |
| Interest-bearing net debt | -151 | -219 |
| Total equity | 1,046 | 949 |
| Gearing | -9% | -23% |
The information presented in the above table excludes the impact of lease liabilities.