German Uniper Agrees €5bn Finance

German energy wholesaler and producer Uniper is to borrow €5bn from a group of three banks to cover expenses after its spin-off from E.ON. Separated since the start of the year, on June 8, the parent company's AGM will vote on the sale of a majority stake, whereby 53% could be sold by year-end.

JP Morgan, Deutsche Bank and UniCredit Bank have clubbed together to offer two tranches: a term loan of €2.5bn with a maturity of three years, and a revolving credit facility of the same amount with an initial maturity of three years, but extendable to four if the banks agree. Uniper will syndicate the credit facilities to its core relationship banking group in the coming weeks.

Uniper CFO Christopher Delbruck said June 3 that the finance “firmly secured the stand-alone financing of the Uniper Group for the long term. We are pleased to have reached this milestone with a team of renowned banks.”

Uniper CFO Christopher Delbruck (photo: Uniper)

The agreement with the banks was made a few weeks after the rating agency Standard & Poor’s assigned Uniper an investment-grade rating of BBB- with a stable outlook. Like many mid-stream companies in Europe, Uniper has been hit by a crash in gas demand, and in commodity prices. It is challenging Tennet in the courts to recover the costs its Franken CCGT has incurred through redispatching. On the positive side Uniper has made progress with major seller Gazprom on the terms of its formerly oil indexed contracts, linking the price to hubs and being compensated for past over-payments.

It said in a statement that it aims to have a comfortable investment-grade rating in the medium term. To achieve this objective, Uniper intends to reduce its current debt factor (ratio of economic net debt to EBITDA) to well below 2.0, and its net financial debt to earnings ratio to below 1. To that end, Uniper has announced asset sales totaling at least €2bn, as well as cost reductions.

William Powell