MILAN (Reuters) - Italian utility Enel is ready to support its Spanish unit Endesa with a credit line and guarantees worth in aggregate up to 5 billion euros ($5.2 billion) to help it cope with highly volatile energy markets, documents showed.
Documents published by the Spanish group for a shareholder meeting on Thursday that will vote on the issue showed that Enel was set to provide up to 3 billion euros via a 12-month credit line and up to 2 billion euros in guarantees.
Endesa will pay an interest of 87 basis points over the Euribor rate for the credit line.
The facility aims to cover Endesa's short-term liquidity needs "to face the increase in the volume of guarantees required on the organised futures markets, mainly natural gas", Endesa said in the documents published on its website.
The Spanish utility is 70%-owned by Enel.
Enel itself is in talks with a group of banks to secure a credit line worth up to 12 billion euros guaranteed by the state through credit export agency SACE, several sources have told Reuters.
The Italian government is working on a state guarantee scheme that would be accessible to all Italian utilities, the sources said.
High volatility on energy markets has forced utilities, which use derivatives to lock in the price for gas and electricity they sell to their clients, to deposit increasing amount of funds as guarantee for the derivatives trades.
The need to adjust these deposits - known as margin calls - in line with fluctuations of energy prices, have put extreme pressure on several energy companies, prompting some of them, including Finland's Fortum and Swiss Axpo, to ask for financial guarantees or loans from their governments.
($1 = 0.9624 euros)
(Reporting by Francesca Landini; editing by Valentina Za)