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The German government, energy giant Uniper, and its majority shareholder, Fortum, have reached a preliminary agreement under which Germany will nationalize the country’s largest gas importer, sources with knowledge of the plans told Bloomberg on Tuesday.
The German government looks to make the announcement of the nationalization as early as this week, according to Bloomberg’s sources.
Germany aims to save its energy companies which have been amassing losses with the lack of contracted Russian gas supply and the high price they have had to pay on the spot market to replace lost Russian volumes.
Last week, Uniper said it was in discussions with Germany about transferring an even bigger stake of the troubled utility to the government, which doesn’t rule out a nationalization of the energy giant that had already received a $15 billion bailout package in July. Under the package, the German government bought a 30% stake in Uniper and made available further capital to help the company.
“The parties are looking into alternative solutions, inter alia a straight equity increase that would result in a significant majority participation by the German Government,” Uniper’s statement from last week said.
Since the July bailout of Uniper, losses at the German company have continued to mount as the energy crisis in Germany and Europe has worsened.
Last month, Uniper reported first-half 2022 losses of some $12.5 billion, with losses incurred due to the necessity of buying natural gas on the spot market as Russia cut flows to Germany.
Uniper’s parent firm, Finland-based Fortum, put out a statement last week in which it said that since the July bailout, “the parties’ joint priority has been the implementation of the stabilisation measures and a long-term solution for Uniper. Due to the increased uncertainties in the operating environment, the parties are also looking into alternative solutions.”
The German government is also considering buying majority ownership in two other gas importers, VNG AG and Securing Energy for Europe (SEFE), formerly Gazprom Germania, Bloomberg News reported last week.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.