German energy giant Uniper SE is seeking to extend a government credit line to €13bn ($13bn) in the latest sign of how Europe’s energy crisis is getting worse.
The utility has requested an additional €4bn from Germany’s state-owned lender KfW after fully using its existing €9bn credit line, Uniper said in a statement yesterday.
The additional funding request is about double the Dusseldorf-based company’s current market value.  
Uniper’s liquidity position has deteriorated further because of surging prices and a massive shortfall in deliveries from Russia. The request came just as its parent company Fortum Oyj said the collateral it needs to provide to trade power rose by €1bn in a week.
Uniper is the biggest corporate casualty of an unprecedented squeeze in energy. Its survival hinges on handouts from the state, as the cost of replacing missing supplies from Russia is leading to losses of more than €100mn a day.
Austria also stepped in to support its energy sector, promising billions of euros in financial support to Vienna’s municipal utility. Wien Energie GmbH may need as much as €6bn to continue providing services for its 2mn clients, the Austrian Finance Ministry said yesterday.
A bailout of Uniper, which was announced in July, would increase Germany’s exposure to the utility’s struggles.
The plan, which includes convertible securities of €7.7bn, would give Germany a 30% stake in Uniper. The deal has yet to be concluded and talks are “currently being further advanced,” the company said.
“We are working at full speed with the German government on a permanent solution to this emergency,” chief executive officer Klaus-Dieter Maubach said in the statement. “Otherwise Uniper will no longer be able to fulfil its system-critical function for Germany and Europe.”
A spokesperson for the German Economy Ministry declined to comment on Uniper’s funding request.
Surging costs of gas and electricity have driven inflation and threatened to drag Germany into recession after Russia slashed supplies in evident retaliation for sanctions over its invasion of Ukraine. The next disruption will start tomorrow when the key Nord Stream pipeline closes for three-day maintenance, stoking fears of a longer shutdown.
Chancellor Olaf Scholz’s administration has struggled to keep a lid on prices, which increase Uniper’s costs and force the company to put up hefty security deposits. European gas futures have spiked to record highs last week and are still trading more than five times their level a year ago.
Since June 14, Uniper - Germany’s biggest buyer of Russian gas - has received only part of the contractually agreed supplies from Gazprom PJSC. The shortfall in deliveries now amount to 80%, the firm said on Monday. Germany has warned that Uniper’s collapse could lead to spill over on the local utilities and companies that rely on the firm for gas and power.
Germany is putting in place measures to pass on costs to consumers. Starting in October, the government will impose a temporary levy on gas to encourage energy savings and distribute the burden of paying higher wholesale gas prices. Until then, Uniper and other gas importers have to bear with losses.
The ruling coalition is preparing for a two-day retreat starting today where officials will grapple with efforts to contain the energy crisis. The planned gas levy has run into trouble because it’s open to abuse from unaffected companies. Economy Minister Robert Habeck has vowed to close loop holes, while discussions on a windfall tax on energy profits have gained steam.
The government stands ready to further support Uniper, if replacement cost losses that can’t be offset by profits from other businesses exceed €7bn, the company said earlier this month. Its loss of more than €12bn in the first half was one of the biggest in German corporate history.