10. Related Parties
Related entities as defined in IAS 24 (Related Party Disclosures) are those legal entities that are able to exert at least significant influence on Covestro AG and its subsidiaries or over which Covestro AG or its subsidiaries exercise control or have at least a significant influence, or which are controlled by a related person or a close family member of such a person. These include nonconsolidated subsidiaries, joint ventures and associated companies, post-employment benefit plans, and other related parties.
In the course of its operating business, Covestro sources materials, supplies, and services from a large number of business partners worldwide, including companies in which it has a direct or indirect interest. Transactions with these companies are undertaken on an arm’s length basis. The goods and services received from associates result from the ongoing operating business with PO JV, LP, Houston, Texas (United States), and amounted to €403 million in the first half of 2024 (June 30, 2023: €385 million). Covestro benefits from fixed long-term supply quotas/volumes of propylene oxide (PO) from this company’s production.
In addition, receivables from pension plans (excluding interest) with a fair value of €62 million as of June 30, 2024 (December 31, 2023: €63 million) resulted from initial funding loans granted. Covestro AG has agreed to provide Bayer-Pensionskasse VVaG, Leverkusen (Germany), with an interest-bearing initial funding loan of up to €208 million and Rheinische Pensionskasse VVaG, Leverkusen (Germany), with an interest-bearing initial funding loan of up to €11 million, both at their request. The pension funds are entitled to draw down amounts necessary to meet their regulatory solvency requirements at any time up to the amounts disclosed. The outstanding receivables are subject to a five-year interest rate adjustment mechanism. Loan commitments to pension funds did not change as of June 30, 2024 (December 31, 2023: €156 million). The loan commitments to the pension funds are recognized as other financial obligations.
There are no further reportable business relationships with other related parties.