German utility Uniper’s admission that it had been forced to seek €10bn in new credit lines was a stark reminder that the threat posed by Europe’s energy crisis is not limited to consumers.
The dash for cash last week by one of Europe’s largest energy companies comes as unprecedented rises in natural gas and power prices prompt a sudden swelling of it liabilities on futures contracts.
With state-backed lender KfW providing €2bn of the mammoth financing alongside €8bn from Uniper’s Finnish owner Fortum, bankers now fear a scramble for credit among the region’s smaller companies as private-sector banks back away.
“The moves have been so extreme that even the normal, most cautious day-to-day business of locking in the spread requires you to raise so much money just to hold the position to delivery,” said Lueder Schumacher, analyst at Société Générale.
“I’d be surprised if everybody in the market who needs access to credit lines will actually get it.”
European gas prices have surged more than 400 per cent over the past year, as demand rebounded from the pandemic and Asian customers snapped up additional cargoes of liquefied natural gas.