Change of control
As at 31 December 2015, the Company’s subsidiary, GKN Holdings plc, had agreements with 14 banks for 15 bilateral banking facilities totalling £800 million, and a £64 million loan facility with the European Investment Bank. Each of these agreements provides that, on a change of control of GKN plc, the respective bank can give notice to GKN Holdings plc to repay all outstanding amounts under the relevant facility. The Company has in issue £450 million fixed rate notes paying 5.375% semi-annual interest and maturing on 19 September 2022 under a euro medium-term note programme established by GKN Holdings plc (the Notes). Pursuant to the terms attaching to the Notes, a holder of the Notes has the option to require GKN Holdings plc to redeem or (at GKN Holdings plc’s option) purchase the holder’s Notes at their principal amount if there is a change of control of the Company and either (i) the Notes are unrated or do not carry an investment grade credit rating from at least two ratings agencies; or (ii) if the Notes carry an investment grade credit rating from at least two ratings agencies, the Notes are downgraded to a non-investment grade rating or that rating is withdrawn within 90 days of the change of control and such downgrade or withdrawal is cited by the ratings agencies as being the result of the change of control. Companies in GKN Aerospace are party to long-term supply contracts with customers which are original equipment manufacturers of aircraft and aero engines. Certain of these contracts contain provisions which would entitle the customer to terminate the contract in the event of a change of control of the Company, where such change of control conflicts with the interests of the customer. Companies in GKN Driveline are party to supply contracts with customers which are original equipment manufacturers of motor vehicles. Certain of these contracts contain provisions which would entitle the customer to terminate the contract in the event of a change of control of the Company. All of the Company’s share schemes contain provisions relating to a change of control. Outstanding options and awards normally vest and become exercisable on a change of control subject to the satisfaction of any performance conditions at that time.
Research and development
Group subsidiaries undertake research and development work in support of their principal manufacturing activities. Further details of the Group’s research and development activities can be found throughout the strategic report.
Details of the Group’s use of financial instruments can be found in Note 19 to the financial statements.
As permitted by section 414C of the Companies Act 2006, certain information required to be included in the Directors’ report has been included in the strategic report. Specifically, this relates to information on the likely future developments of the business of the Group, the Company’s business model and strategy, risk management and the disclosure of greenhouse gas emissions for which the Company is responsible.
Disclosures required by Listing Rule 9.8.4R
Information relating to the waiver of dividends can be found on page 95. There are no other disclosures to be made under the above listing rule.
Auditors and disclosure of information