Swiss trading giant and shipowner Gunvor Group has hit back at claims of losses and staff changes in its LNG division.
The company issued a statement to "refute misinformation and erroneous speculation" posted online against a background of soaring gas prices.
The group said its co-head of LNG in Singapore — whom they did not name, but who also sits on the group's executive committee — remains in position, despite speculation to the contrary.
"No LNG management has left the company, nor has the team changed," the company added.
Gunvor's trading across all desks remains ongoing and has not ceased, the trader said.
The Financial Times has reported that the group's reduced trading positions after the gas-price spike triggered margin calls from brokers and exchanges.
Costly surge?
The Geneva-based company cut exposure as wholesale gas prices surged over the past couple of months because of concerns about tight supplies ahead of the winter, according to sources cited by the newspaper.
The report put the amount of margin calls at about $1bn.
A margin call is an indicator that one or more securities held in a margin account has decreased in value.
This must be rectified either by paying more money into the account or selling some of the assets.
The group has more than $3bn of excess liquidity to cover its remaining exposure, the sources added.
Having a guess
But Gunvor said: "Descriptions of Gunvor's LNG trading and hedging practices are clearly guessed at and false.
"Figures claimed about Gunvor’s previous and possible exposure to future margin calls are wildly exaggerated and wrong," the company added.
The group explained that managing risk and liquidity is what Gunvor and other physical traders do.
"While there have been margin calls associated with the recent natural gas price rally, Gunvor has the processes and instruments in place to effectively manage this volatility. Every margin call associated with natural gas and LNG made during the last several months has been paid," the company said.
Gunvor also said that steps taken by any trading house to cut positions and seek additional financing support are appropriate, responsible measures taken to respond to market conditions.
"The notion that these activities directly indicate losses is wrong," the trader added.
Always talking to banks
Gunvor reiterated it remains in constant dialogue with global financing partners to adjust available funding facilities to the needs of its business.
"As a result, Gunvor and its natural gas and LNG businesses are substantially profitable, and [have] remained so during the last months and years. Gunvor further remains well capitalised," the company said.
In the first half of 2020, Gunvor traded 6m tonnes of LNG. This compares with 5.3m tonnes a year ago.
Revenue from LNG trading was up more than 100% at $2.5bn in the period.
Earlier this month, Gunvor placed a $300m bond through the Irish Stock Exchange.
The company said the issue had attracted interest due to its ongoing work to refocus its business towards the energy transition.
