Frankfurt: Uniper AG obtained €5 billion (Dh20.5 billion, $5.6 billion) of loans in its first outside borrowing since its spin-off from German utility EON SE was announced.
The facilities include a €2.5 billion loan and a revolving credit of the same size, each with three-year terms, the Dusseldorf-based company said in a statement Thursday. JPMorgan Chase & Co., Deutsche Bank AG and UniCredit SpA arranged the financing, which will be syndicated to a wider group of lenders. Terms of the transaction weren’t disclosed.
Uniper was created in January to take over EON’s fossil-fuel plants and trading business as Germany’s largest utility focuses on renewables, networks and retail customers.
The move is one of the most radical responses to the country’s shift toward wind and solar generation, a policy that’s undermining power prices and hurting profitability at traditional utilities. Uniper is ranked BBB- by S&P Global Ratings, the lowest investment-grade level and two steps below EON.
“We’re seeking a comfortable investment grade rating,” Christopher Delbrueck, the chief financial officer of Uniper, said by phone. “That means at least a notch better than today.”
Uniper aims to improve its rating by reducing its net debt-to-equity ratio to below 1 by selling at least €2 billion of assets, according to the statement. The credit facility can be extended two times by a year with the consent of the banks.
Uniper will use the financing to pay off an existing loan provided by EON, Delbrueck said by phone. Half of the revolving credit will serve to finance working capital and the other half will act as backup facility, he said.