Despite the energy crisis, Luca Baroni, the CFO of the Alpiq energy group, has no money worries. Unlike the Axpo Group, for example, his company seems to have done a few things right.
As energy prices skyrocketed last week, net liquidity actually improved at energy group Alpiq. This is what the company’s chief financial officer Luca Baroni told the “Tages-Anzeiger” on Friday.
Unlike, for example, the Axpo Group, which had to knock on the federal government’s door for bailout loans, the situation was different. “We have worked hard in recent months to balance our portfolio in such a way that major price changes in the electricity market do not lead to hundreds of millions in liquidity outflows,” the manager explained.
At Alpiq, the measures therefore meant that inflows and outflows were more or less in balance, the statement added.
Less liquidity tied up
Indeed, a market participant who cannot deposit increasing collateral when prices are rising will be excluded from this exchange. “It doesn’t help if the business model is perfectly set up and you generate an operating profit,” Baroni continued.
Furthermore, Alpiq has also initiated other measures to ensure that it is not dependent on state funds in crisis situations. “We not only trade on the stock exchange, but also directly with OTC counterparties,” he said regarding direct transactions between trading partners. In doing so, he said, Alpiq has reduced collateral flows, tying up less liquidity.
Other issues important
However, there is a risk that the counterparty may default. Nevertheless, not all money would be lost, because collateral would be provided. “But the question is: Is the collateral sufficient? How quickly can the electricity be procured elsewhere?” he stressed.
And Alpiq has another advantage over Axpo that gives the CFO greater peace of mind about the future: his company has no state institutions as owners, but a financial investor and other market participants in the energy sector as shareholders.
Quick money from shareholders
“So the political element is less pronounced,” Baroni said. That’s where it’s generally easier to find solutions, he said.
And Alpiq shareholders also gave the assurance that they could access a 300 million Swiss francs loan at any time, which also lets the CFO sleep more soundly. “We are also holding further talks with the banks,” the manager added.
09.09.2022/kut./ena.