Uniper secures $11 billion of credit to cope with gas volatility

Via Christoph Steitz and Vera Eckert

FRANKFURT -German utility Uniper has secured credit score amenities price up to 10 billion euros ($ELEVEN billion) from parent Fortum and state bank KfW in a move to manage with remarkable volatility in power markets, it stated.

Uniper, by which Finland’s Fortum owns greater than SEVENTY SIX%, said as part of the measures it had additionally drawn 1.8 billion euros of credit facilities from its center banks, which it stated late on Tuesday used to be the full amount.

“the explanation for these further financial tools is the unprecedented price will increase of – in a few cases – a number of hundred % within a couple of months in a highly risky marketplace surroundings,” Uniper finance chief Tiina Tuomela mentioned.

Larger rival RWE, while requested approximately whether or not it too needed to protected additional investment headroom, said it had made arrangements to manage with the placement by means of credit strains and different funding instruments, without offering further detail.

European gas costs have rocketed amid an financial restoration from the pandemic, low storage levels and hypothesis around supplies from Russia, Europe’s biggest provider of natural gas, piling power on power companies and customers alike.

Wholesale and change-based totally commodity markets automatically require downpayments to cover operators’ open liabilities.

Fortum, in a separate remark, said European fuel prices had risen up to 1,000% to extraordinary levels in December.

Shares in Uniper, that’s some of the financial backers of Russia’s Nord Move 2 pipeline, fell as a lot as 3.3% at the refinancing, which buyers said used to be larger than anticipated.

“Additionally, it doesn’t sound as if a Fortum squeeze out bid is impending,” a trader stated, referring to a potential offer for minority shareholders which the Finnish company can now pursue after a self-imposed restrict expired ultimate week.

Fortum stocks had been down as much as 3.4%.

Uniper stated that at the same time as the credit score facility provided through Fortum had been partially used, the KfW mortgage had now not, adding general those steps would provide it financial flexibility in “potentially extreme” marketplace conditions.

While the cost volatility increases the need for security payments, it also increases the price of Uniper’s gas and power assets, the company mentioned, adding its profits prospects were not adversely impacted.

“Economically, Uniper is an excessively wholesome company,” Tuomela said. “However, we consider the agreements introduced these days to be helpful as precautionary measures to extend our liquidity headroom.”

($1 = 0.8859 euros)

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