European energy companies are facing many challenges, amid continuing to bleed losses and debts, and searching for ways to finance their businesses, whose costs have increased in light of the rise in oil and gas prices.
And energy prices in Europe this year (2022) reached record levels, in the wake of the Russian invasion of Ukraine, and the efforts of the countries of the old continent to find alternatives to Russian fuel.
European energy company debt rose this year to more than 1.7 trillion euros ($1.72 trillion); to jump by about 50% from its pre-2020 levels.
Record gas prices prompted a number of small companies, especially in Britain, to declare bankruptcy at the beginning of this year, and major companies in many European countries are struggling to get out of the impasse to cover the cost of high oil and gas prices, according to Bloomberg Agency.
German Uniper Debt
Germany’s Uniper is at the forefront of European energy companies, which are facing many crises, as they need financing worth 9 billion euros ($9.12 billion).
On Monday, the company revealed that it had applied for the extension of a credit facility from Germany’s state-owned bank KFW, after it withdrew a fully existing two billion euro ($2.03 billion) government loan in response to a short supply of Russian gas.
Uniper is running out of options, as it has begun to pull gas from storage to sell to customers to avoid buying more expensive fuel on the spot market.
The utility company has also asked the government for a bailout, including an equity stake and additional debt financing, through an increase in a state-backed credit facility.
Financing The Energy Crisis
Czech energy company CEZCB is seeking a loan of up to 3 billion euros ($3.04 billion) to overcome the energy crisis.
This comes at a time when European countries are struggling to provide 24 billion euros ($24.33 billion) in financing to support the energy sector to face challenges, foremost of which is the shift away from Russian fuel, and to secure the needs of the countries of the continent.
European energy companies raised about 45 billion euros ($45.61 billion) in bonds and 72 billion euros ($72.98 billion) in loans in the first six months of the year.