Austria’s largest energy supplier becomes insolvent

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Austria’s largest energy supplier, Wien Energie faces financial turmoil due to massive inflation in the country. The company is due to repay between EUR 1.7 and 1.8 billion and needs collateral.

Austrian media outlet ‘Heute’ reported that it came as somewhat of a surprise to the Austrian public when a crisis summit on energy prices was suddenly announced on Sunday morning. The meeting was to take place in the Chancellor's Office on the same day.

‘Heute’ stated that Wien Energie’s financial situation has become tumultuous due to the immense inflation on the electricity market. Between EUR 1.7 and 1.8 billion had to be deposited by the City of Vienna subsidiary at the beginning of the week - and it could no longer cope on its own.

Since the electricity prices in the wholesale sector (where Vienna has to buy energy) have soared, the securities are no longer sufficient. Now the federal government has to help out, ‘Heute’ reported. Around two million customers are under contract with Wien Energie - so Finance Minister Magnus Brunner will probably have to set up a rescue parachute scheme.

Wien Energie: “Not bankrupt”
Wien Energie stated on Sunday evening that it was “not insolvent/bankrupt”, but due to the explosion in electricity prices across Europe, the “necessary security payments had risen [to an] unforeseen [amount]. Wien Energie & Wiener Stadtwerke are solid, economically sound companies with top credit ratings.”

Wien Energie announced several weeks ago that there would be massive increases in electricity and gas prices for customers from 1 September. For a household customer with an electricity consumption of 2,000 kWh per year, the price adjustment means additional monthly costs of about 36 euros. For gas, about twice that amount will be due.