Finland’s Fortum seeks ‘a few billion’ euros from government, chairman says

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HELSINKI — Troubled Finnish utility Fortum is asking its government for a loan worth “a few billion” euros, its chairman told a newspaper, after a surge in European power prices pushed up the cost of collateral it is obliged to hold.

Fortum said on Monday it was in talks with the Finnish state, its main owner, on how to secure the company’s liquidity needs until hedged power contracts go to delivery and collaterals are released.

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The company prefers a loan over guarantees from the Finnish government to be able to pay for the skyhigh collaterals that have rapidly risen due to exceptionally high electricity prices.

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“We are applying for a loan,” Chairman Veli-Matti Reinikkala told Finland’s largest daily Helsingin Sanomat in an interview, adding “a few billion” euros would suffice.

He assured there was “no risk” that the company would not pay the loan back.

“We don’t have any profitability issues. This is solely a liquidity problem, and hopefully a short-term one,” he said.

The jump in power prices driven by a drop in gas flows from Russia since its invasion of Ukraine has put heavy strain on utilities including Fortum’s German unit Uniper, which has sought a multi-billion euro government bailout.

Finland’s government has yet to decide on the funding for Fortum, but Prime Minister Sanna Marin said the matter would be discussed during the government’s two-day budget talks which began on Wednesday.

“Generally speaking, the government is on top of the situation and dealing with it. Unfortunately this is not about Fortum only but also other energy companies,” Marin told reporters.

European Commission chief Ursula von der Leyen said on Monday that Brussels was preparing energy market reforms to address the problems.

(Reporting by Anne Kauranen)

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