4 months Ago
Massive Loans and City Ownership
In order to stabilize AEB, the city converted a loan of 222.3 million euros into shares and secured a new loan for almost 180 million euros, most of which will be used to pay off debts to banks such as ABN Amro, ING, BNG Bank, and Deutsche Bank.
AEB also secured a loan of 21.5 million euros to cover any cash flow problems without needing to constantly ask for municipal support.
AEB's latest annual report unveiled the extent of the city's full financial exposure. Now Amsterdam is the company's principal lender, and the company is still fragile financially.
For 2021, AEB expects to invest 73 million euros to comply with environmental regulations, after it had a net loss of 28.3 million euros, including a revenue of just short of 198 million euros in 2024. The company's equity is just 5.8 percent of its balance sheet, propped up by a subordinated municipal loan.
Challenges to Long-Term Viability
The city's chance of recouping what it had invested in AEB hinged on a later sale of the utility, but that prospect is now attenuating. Nationwide policy is driving toward fewer but bigger waste processing centers, so AEB is lined up for expensive modernization or potential extinction.
The supervisory board emphasised that this included long-term contracts with the municipality to address these financial challenges.
AEB also plans to invest heavily in a 200-million-euro CO2 capture plant that might need further support from the city. The firm's bio-energy site (in Dutch), vital to Amsterdam's district heating, suffered from an acute shortage of biomass in 2024.
This led the city to back it financially to keep it operating, adding another vacancy risk to the company's continuing business.
Operational Setbacks and Future Plans
Some operating problems have also added to AEB's losses. The waste stream contained explosive laughing gas canisters that led to costly damage and shutdowns.
They receive an average of 600kg of treated residual waste from which metal is recovered for recycling.
nder control since last July, the problem led to millions of euros in emergency and repair spending.
AEB director Wim van Lieshout has already revealed that a full company restructuring will impact all the business's departments and 350 staff. Alderman Alexander Scholtes, meanwhile, has briefed the municipal council in private about its future financial plans, with public information to follow after the summer.
The situation leaves Amsterdam holding full responsibility for a financially troubled company that plays a key role in the city's waste management, while leaving the city with no clear way to recoup their mammoth investment.
