Equinor invests 37 billion in the trading company Danske Commodities – E24
The trading company receives money from the owner Equinor after “extreme” price fluctuations.
Danske Commodities states that it has increased its equity following an injection of 3.5 billion euros from Equinor, which owns the trading company.
This corresponds to around DKK 37 billion at today’s exchange rates.
Danske Commodities writes that high energy prices and “extreme” fluctuations in prices put a great deal of pressure on the finances of European trading companies.
Must provide more security
– High energy prices require financial solidity and by promoting a strong financial position, Danske Commodities is able to provide the necessary liquidity to the volatile energy market, the company writes in a statement.
CFO Jakob Sørensen points out that companies such as Danske Commodities must provide security when dealing with energy, in order to cover potential fluctuations in prices.
When the price rises, the amount of this security will also increase, he points out.
– In other words, considerable financial strength is necessary to secure cross-border trade in Europe, says Sørensen.
A new record year awaits
Communications manager Mads Schmidt Christensen at Danske Commodities says that there is talk of a planned capital exchange to support the company’s future growth.
“Danske Commodities delivered a record year in 2021, and we expect to deliver another record year for 2022”, writes Christensen in an email to E24.
Christensen says the capital increase is taking place with a view to meeting increased guarantees on exchanges as a result of high energy prices and with a view to supporting Danske Commodities’ strategy.
“With Equinor behind us, we have a strategic ambition to be a global energy trading company with activities on five continents, and the capital expansion must help realize this ambition”, says Christensen.
Crisis assistance
Equinor came to the rescue in September to avoid a liquidity crisis in the Danish subsidiary.
The Danish energy trading company has experienced a great deal of pressure on liquidity, as a result of unsettled marked and sharply rising energy prices.
In 2018, Equinor signed up to buy the energy trading company for 400 million euros. Equinor justified the acquisition with the conversion to a broad energy company. The acquisition was completed the following year.