Borrowings

12 Months Ended

Dec. 31, 2022

Disclosure of Borrowings [Abstract]

Borrowings

17. Borrowings

As of December 31, this caption includes:

	Total				Current				Non-current
In thousands of soles	2021		2022		2021		2022		2021		2022
Bank loans		320,689		651,825		199,471		548,372		121,218		103,453
Other financial entities		188,868		168,148		22,210		12,176		166,658		155,972
Lease liability for right-of-use asset		60,507		59,085		14,541		12,879		45,966		46,206
Finance leases		9,836		835		5,118		835		4,718		-
		579,900		879,893		241,340		574,262		338,560		305,631

A. Bank Loans

As of December 31, 2021 and 2022, this item comprises bank loans in local and foreign currencies for working capital purposes. These obligations accrue fixed interest rates ranging from 0.5% to 13.5% in 2022 (from 0.9% to 11% in 2021).

	Interest	Date of
In thousands of soles	rate	maturity		2021		2022
AENZA S.A.A. (i)	Term SOFR 3M + de 6.26% a 8.51%		2023		-		463,773
Unna Energia S.A.(ii)	6.04% / 7.68%		2027		143,986		126,064
Viva Negocio Inmobiliario S.A.C. (iii)	7.00% / 11.35%		2024		65,262		51,314
Morelco S.A.S. (iv)	9.95% / 10.93%		2023		-		10,674
Cumbra Peru S.A. (v - vi)	8.00%		2023		111,441		-
					320,689		651,825

i. Bridge loan – AENZA S.A.A.

On March 17, 2022, the Company entered into a bridge loan agreement for up to US$ 120 million, with a group of financial institutions comprised by Banco BTG Pactual S.A. - Cayman Branch, Banco Santander Peru S.A., HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo Financiero HSBC, and Natixis, New York Branch. The financing will be repaid over a period of 18 months, in quarterly interest installments and is secured, subject to the fulfillment of certain precedent conditions, by a flow trust (first lien), a pledge over the shares in Unna Energia S.A. (first lien), and a trust on the shares of Viva Negocio Inmobiliario S.A.C. (second lien). On April 5, 2022, the Company received a bridge loan for up to US$120 million. The loan bears interest at the following interest rates: (i) for the first and second installments, Term SOFR + 6.26%; (ii) for the third and fourth installments, Term SOFR + 6.76%; (iii) for the fifth installment, Term SOFR + 7.51%; and (iv) for the sixth installment, Term SOFR + 7.51%. As of December 31, 2022, the total amount payable is US$ 120 million, equivalent to S/463.8 million, which includes principal of S/ 458.4 million, plus interest and net deferred charges of S/ 5.4 million. The Corporation is currently evaluating financing alternatives that allow it to cover its short-term obligations.

As of December 31, 2022, the Company has complied with the covenants established in the loan agreement.

ii. Unna Energia S.A. Loan

Terminales del Peru (hereinafter “TP”), a joint operation of the subsidiary Unna Energia S.A., has a medium-term loan agreement with Banco de Credito del Peru S.A. (hereinafter BCP) to finance investments arising from the operation agreement of North and Center terminals for 2015 to 2019 period, available up to December 31, 2022 with a maximum exposure limit of US$ 80 million. This funding is repaid within eight (8) years. In 2022 additional disbursements amounting to US$ 8.5 million (equivalent to S/ 32.7 million) were requested for additional investments.

In addition, in November 2019, TP signed a loan agreement to finance the additional investments from 2019 to 2023 for a credit line of US$ 46 million with BCP. This agreement includes an assignee as interest holder, so BD Capital (BDC) acquired 50% of the BCP contractual position through the signature of an accession agreement.

As of December 31, 2022, the amount recorded for loans equivalent to 50% of interest owned by the subsidiary Unna Energia S.A. amounts to S/126.1 million, principal net of interest and deferred charges (S/ 143.9 million, principal net of interest and deferred charges as of December 31, 2021).

As of December 31, 2021 and 2022, TP is in compliance with the covenants established in the loan agreement.

iii. Viva Negocio Inmobiliario S.A.C. Loan

The balance comprises the following:

	Interest	Date of
In thousands of soles	rate	maturity		2021		2022
Banco de Credito del Peru S.A.	7.00% / 7.94%		2023		35,679		36,562
Banco Interamericano de Finanzas S.A.	11.35%		2024		18,456		12,636
Banco BBVA Peru S.A.	7.94%		2024		9,742		2,116
Others	11.00%		2022		1,385		-
					65,262		51,314

As of December 31, 2022 and 2021, the Corporation has no guarantees or covenants for these loans.

iv. Morelco S.A.S. Bank Loans

The balance comprises the following:

	Interest	Date of
In thousands of soles	rate	maturity		2022
Bancolombia S.A.	9.95% / 10.93%		2023		6,344
Banco de Bogota	10.39%		2023		4,330
					10,674

As of December 31, 2021 and 2022, the Corporation has no guarantees or covenants for these loans.

v. Financial Stability Framework Agreement

In July 2017, the Company and its subsidiaries (Cumbra Peru S.A., Construyendo Pais S.A., Vial y Vives – DSD S.A., and Concesionaria Via Expresa Sur S.A.) signed a Financial Stability Framework Agreement with the following financial entities: Scotiabank Peru S.A.A., Banco Internacional del Peru S.A.A., Banco BBVA Peru S.A., Banco de Credito del Peru S.A., Citibank del Peru S.A., and Citibank N.A. The objectives of the Financial Stability Framework Agreement were to guarantee Cumbra Peru S.A. a syndicated revolving line for working capital, a non-revolving line of credit to finance repayment commitments subject to performance bonds; guarantee lines of credit for the issuance of the performance bond, and undertake to maintain the existing letters of credit issued at the request of Cumbra Peru S.A.

As of December 31, 2021, the Company complied with the obligations and covenants set forth in the Financial Stability Framework Agreement.

On March 29, 2022, S/ 28.2 million and US$ 0.3 million corresponding to the total balance of the Financial Stability Framework Agreement were settled (US$ 7.4 million equivalent to S/ 29.5 million as of December 31, 2021).

vi. Banco Santander Loan

On December 28, 2020, Tecnicas Reunidas enforced two letters of credit for a total amount of US$ 23.7 million, which had been issued by Banco Santander Peru S.A. on behalf of our subsidiary Cumbra Peru S.A. as guarantee pursuant to a construction agreement. As a result, Cumbra Peru S.A. was granted a short-term loan by Banco Santander for principal amount of US$ 23.7 million, equivalent to S/ 85.9 million. The loan accrued interest at an annual rate of Libor + 8%. As of December 31, 2021, the debt balance was US$ 20.2 million, equivalent to S/ 80.8 million. Cumbra Peru complied with the respective covenant subject to the Loan Agreement with Banco Santander S.A.

In April 2022, Cumbra Peru S.A. settled the entire debt amounting to US$ 20.2 million (equivalent to S/70.1 million).

B. Other financial entities

On May 29, 2018, the Company and Inversiones Concesiones Vial S.A.C. (“BCI Peru”) came into an investment agreement with the intervention of Fondo de Inversiones BCI NV (“BCI Fund”) and BCI Management Administradora General de Fondos S.A. (“BCI” Asset Management”) to monetize future dividends from Red Vial 5 S.A. to the Company. Upon the signature of this agreement, the Company had to indirectly transfer its economic rights over 48.8% of the share capital of Red Vial 5 S.A. by transferring its B class shares (equivalent to 48.8% of the capital of Red Vial S.A.) to a vehicle specially incorporated for such purposes called Inversiones en Autopistas S.A. The amount of the transaction was US$ 42.3 million (equivalent to S/ 138 million) and was completed on June 11, 2018.

In addition, it has been agreed that the Company would have purchase options on 48.8% of Red Vial 5’s economic rights that BCI Peru will maintain through its interest in Inversiones en Autopistas S.A. These options would be subject to certain conditions such as the expiration of different terms, recovery of the investment made with the proceeds of BCI Fund (according to different economic calculations) and/or to control changes.

As of December 31, 2022, the balance of loan payable amounted to US$ 42.6 million, equivalent to S/ 162.8 million which accrued interest at an annual rate of 9.97% (as of December 31, 2021, the balance was US$ 41.5 million, equivalent to S/ 165.8 million which accrued interest at an annual rate of 8.39%). It includes the effect of the present value for S/ 16.6 million (as of December 31, 2021, S/ 12.4 millions) (Note 26.B.ii). The accrued interest amount to S/ 9.3 million (in 2021 S/ 10 million).

C. Right-of-use-liabilities

	Interest	Date of		Total
In thousands of soles	rate	maturity		2021		2022
AENZA S.A.A.	9.08%		2027		51,187		41,456
Unna Energia S.A.	7.10% / 19.6%		2026		3,889		11,640
Unna Transporte S.A.C.	6.25% / 11.72%		2025		4,503		4,960
Morelco S.A.S.	14.97% / 17.64%		2026		423		804
Cumbra Ingenieria S.A.	7.40%		2023		427		64
Tren Urbano de Lima S.A.	10.00%		2023		60		17
Other minors	4.50%		2037		18		144
					60,507		59,085

The minimum payments to be made according to their maturity and current value of obligations for right-of-use liabilities are the following:

In thousands of soles	2021			2022
Up to 1 year		18,817			19,075
From 1 to 5 years		46,288			55,092
Over 5 years		8,086			112
		73,191			74,279
Future financial charges		(12,684	)		(15,194	)
Current value of right-of-use liabilities		60,507			59,085

The current value of obligations for right-of-use liabilities is detailed as follows:

In thousands of soles	2021		2022
Up to 1 year		14,541		12,879
From 1 year to 5 years		38,136		46,094
Over 5 years		7,830		112
		60,507		59,085

D. Finance leases

	Interest	Date of
In thousands of soles	rate	maturity		2021		2022
Viva Negocio Inmobiliario S.A.C.	9.04%		2023		6,678		76
Cumbra Peru S.A.	5.32% / 7.67%		2023		3,112		759
Unna Energia S.A.	6.28%		2022		46		-
					9,836		835

The minimum payments to be made according to their maturity and current value of obligations for finance lease agreements are the following:

In thousands of soles	2021			2022
Up to 1 year		5,624			873
From 1 to 5 years		4,909			-
		10,533			873
Future financial charges		(697	)		(38	)
Current value of the obligations for finance lease agreements		9,836			835

The current value of obligations for finance lease agreements is detailed as follows:

In thousands of soles	2021		2022
Up to 1 year		5,118		835
From 1 to 5 years		4,718		-
		9,836		835

E. Fair value

As of December 31, the carrying amount and fair value of indebtedness are as follows:

	Carrying amount				Fair value
In thousands of soles	2021		2022		2021		2022
Bank loans		320,689		651,825		349,280		638,620
Other financial entities		188,868		168,148		188,868		168,148
Lease liability for right-of-use asset		60,507		59,085		66,943		58,719
Finance leases		9,836		835		9,097		776
		579,900		879,893		614,188		866,263

As of December 31, 2022, fair values are based on discounted cash flows using borrowing rates between 4.7% and 17.6% (between 3.9% and 10% as of December 31, 2021) and are within Level 2 of the fair value accounting hierarchy.

F. Debt movement

The movement in debt for the years ended December 31, 2021 and 2022 are as follows:

	2021
In thousands of soles	Bank loans			Other financial entities			Lease liability for right-of- use asset			Finance leases
Balance at January, 1		528,564			244,639			72,726			52,391
Additions		281,079			-			7,988			104
Amortization		(473,693	)		(42,605	)		(26,520	)		(5,542	)
Accrued interest		47,246			11,439			4,549			3,260
Interest paid		(48,034	)		(9,732	)		(4,335	)		(3,224	)
Subsidiary deconsolidation		(22,919	)		(59,190	)		(6,881	)		(36,757	)
Fair value		-			12,402			-			-
Others		8,446			31,915			12,980			(396	)
Balance at December, 31		320,689			188,868			60,507			9,836

	2022
In thousands of soles	Bank loans			Other financial entities			Lease liability for right-of- use asset			Finance leases
Balance at January, 1		320,689			188,868			60,507			9,836
Additions		492,961			-			21,567			70
Amortization		(171,239	)		(28,758	)		(16,198	)		(8,536	)
Accrued interest		49,099			9,273			4,845			474
Interest paid		(39,748	)		(10,525	)		(4,732	)		(514	)
Fair value		-			16,629			-			-
Others		63			(7,339	)		(6,904	)		(495	)
Balance at December, 31		651,825			168,148			59,085			835