Uniper Burns Through Credit Line, Upping Urgency for Bailout

By Bloomberg

Jul 18, 2022

image is BloomburgMedia_RF7IFMDWLU6801_18-07-2022_11-00-07_637936992000000000.jpg

Employees and members during a tour of the Uniper SE Bierwang Natural Gas Storage Facility in Muhldorf, Germany, on Friday, June 10, 2022. Uniper is playing a key role in helping the government set up infrastructure to import liquified natural gas to offset Russian deliveries via pipelines. Photographer: Krisztian Bocsi/Bloomberg

(Bloomberg) -- Gas giant Uniper SE said it has used up all the 2 billion-euro ($2 billion) credit line from German state-owned lender KfW Group, increasing the urgency for a government bailout.

Uniper is running out of options as it has started drawing gas out of storage to sell to customers to avoid buying more expensive fuel in the spot market. The utility has asked the government for a bailout, including an equity stake and additional debt funding through an increase in a state-backed credit facility.

For now, the credit facility is utilized “in full,” the company said Monday in a statement. “This step has been taken in reaction to continuing supply disruptions of Russian gas and the associated developments on the energy markets and exchanges.”

Germany is under pressure to hammer out a deal soon. The inventory drawdowns, which started last Monday, are sapping supplies that are supposed to be saved for winter. Uniper first disclosed bailout talks with the German government at the end of June. Since then, discussions on how to finance a 9-billion euro bailout have been tense.

Parent Fortum Oyj -- part-owned by the Finnish government -- has already supported Uniper with an 8-billion-euro credit facility and has shown little appetite to put down more cash. It proposed a reorganization to ring-fence the system-critical German businesses under the ownership of the German government.

Talks are expected to reach a crucial moment on Thursday, when it will become clear if Russia intends to resume flows via its biggest pipeline to Europe that’s currently shut for annual maintenance, a person familiar with discussions told Bloomberg last week.

Uniper’s gas inventories in Germany have slipped 4 percentage points in the past week, according to data from Gas Infrastructure Europe. Storage facilities were 56.2% full as of Saturday, down from as much as 60.1% on July 10.

(Updates with detail on credit facility)

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By Christoph Rauwald , Rachel Morison