Fortum’s Subsidiary Uniper Takes Precautionary Financing Measures

During the early winter season, the very volatile commodity markets with unprecedentedly high prices have resulted in significantly higher margining requirements for European market participants. Fortum’ said Tuesday its subsidiary Uniper is hedging its asset positions with forward commodity sales, which are often subject to margining payments.

When commodity prices increase, the mark-to-market value of those deals decline, which triggers additional margining payments for Uniper. When the underlying gas and power positions go into delivery or commodity prices decline, the margining payments are returned to Uniper.

To manage any further market volatility and significant price increases, Uniper has taken precautionary measures to secure additional liquidity and financial flexibility primarily for the winter season:

• Fortum has provided Uniper with intra-group financing in the format of a credit facility agreement of up to EUR 8 billion on arm’s length terms. This credit facility comprises two tranches: shareholder loan and parent company guarantee. To date, Uniper has used part of the facility.
• Uniper has drawn the company’s existing EUR 1.8 billion revolving credit facility in full.
• Uniper has agreed with the German state-owned KfW-Bank on a short term revolving credit facility of up to EUR 2 billion. The facility has not been used so far.

During 2021, the European gas prices have risen up to 1,000% and have, together with power prices, been at unprecedented levels in December. Under these market conditions, Uniper’s focus remains on securing reliable deliveries to its customers and honouring its commitments.