OSLO (Reuters) - Finnish energy firm Fortum (FORTUM.HE) will pay approximately 20 million euros ($23 million) to help replenish a Nasdaq Commodities contingency fund after the default of a private Norwegian trader, the company said on Friday.
Electricity derivatives trader Einar Aas earlier this week racked up losses he could not cover, leaving commodities companies who are part of the Nasdaq clearing house, and the exchange itself, to plug a 114 million euro hole.
Nasdaq said on Thursday it had covered 7 million euros of the losses, and told members of its commodity clearing operation - which include Fortum - to pay the remaining 107 million within two business days or risk being declared in default themselves.
The trader’s default was triggered by strong fluctuations in regional power market spreads, as heavy rain pushed down prices in the hydroelectric-dependant Nordic region, while a spike in the cost of carbon drove up German prices, Nasdaq said.
Fortum said its original participation in the contingency fund was approximately 30 million euros, of which two thirds was lost when Aas’ portfolio was liquidated.
“Consequently, Fortum will book approximately 20 million euros in its third quarter results as a financing cost,” it added.
“Fortum expects Nasdaq to have adequate collateral and security arrangements at all times and we will monitor the situation carefully,” the company said.
Reporting by Terje Solsvik; Editing by Mark Potter