By Dominic Chopping

 

Finnish energy group Fortum Oyj said Tuesday it has secured a 2.35 billion euro ($2.33 billion) bridge financing facility from the Finnish state to ensure access to liquidity amid soaring collateral requirements.

Fortum said it currently has sufficient liquid funds to meet collateral needs and utilisation of the bridge financing will be a last resort.

The Finnish state, Fortum's majority owner, is providing the liquidity facility through state-owned holding company Solidium. The first tranche of at least EUR350 million must be drawn by 30 September, 2022, in order for the arrangement to remain effective thereafter, and the last required tranche might be drawn by 31 March, 2023.

The financing can't be used to cover collateral needs of Fortum's subsidiary Uniper, it said.

If Fortum draws on the facility, it will be required to issue up to 8.97 million new shares to Solidium, increasing the Finnish state's ownership to 51.26% from 50.76%.

"Regulatory changes are urgently needed to curb the unreasonably high margining and collateral requirements," Chief Executive Markus Rauramo said.

At market close yesterday, Fortum's standalone collaterals tied up on Nasdaq amounted to around EUR3.5 billion. At their highest, the collateral requirements amounted to approximately EUR5 billion.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

September 06, 2022 03:54 ET (07:54 GMT)

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