Failed energy suppliers can demand a state guarantee to avoid bankruptcy | energy prices

De Tejd learned that if the banks no longer wanted to give her new loans, she would be able to turn to the federal government for state guarantee. This government guarantee should allow them to find enough bank financing to weather a difficult winter.

No guarantee has been formally requested by any supplier yet, but the sector has recently received cues from players who are struggling to get loans. With the skyrocketing energy prices, the amounts they had to finance up front exploded, which also doubled their need for working capital and cash. In addition, suppliers see an increase in defaults and repayment plans of their customers and have to pay a large portion of the government’s energy bills, such as grid rates, value-added tax and part of the social rate, money that they can sometimes only recover after months.

Profitable businesses can also face problems if they do not get enough credit from banks to cover their purchases in the coming winter.

The collateral system must provide sufficient security so that the banks still allow the necessary lines of credit. Suppliers and intermediaries, such as electricity and gas dealers, can obtain a guarantee from the state of 70 percent of the amount to be borrowed. Thus, the risk for the bank is limited to 30 per cent.