Germany Plans Large Share Sale of Nationalized Energy Major Uniper

Germany has started exploring options to sell a large stake in energy giant Uniper, which the government nationalized in 2022, with a possible share offering at the end of this year or next year, sources with knowledge of the plan told Bloomberg on Wednesday.

The German government has launched initial talks with potential advisers, according to Bloomberg’s unnamed sources.  

Germany had to nationalize Uniper in 2022 to avoid its collapse amid soaring gas prices and a lack of Russian supply in the wake of the Ukraine invasion and the EU sanction barrage. Uniper and other German energy firms had been amassing losses with the lack of contracted Russian gas supply and the high price they had to pay on the spot market to replace lost Russian volumes.  

The total bill for Uniper’s nationalization came in at $53 billion.

Contacted by Bloomberg about the possible share sale, a representative for Uniper declined to comment on any details, but noted that the European Commission approved the nationalization on the condition that Germany work out an exit strategy to reduce its stake to not more than 25% plus one share by end 2028 at the latest.

After the nationalization, Germany owns more than 99% in Uniper, whose shares are still listed in Frankfurt, but trade is thin.

Considering that trading in Uniper shares is very low volume and frequency, a share sale would be a kind of a new initial public offering or a “re-IPO”, according to market participants cited by Bloomberg.  

Uniper’s current market capitalization is around $25.8 billion (23.8 billion euros).

In any stock offering by the German government, Uniper’s shares would likely be priced at some discount compared to the current market price, some of Bloomberg’s sources said.

A share sale would give Germany a needed cash infusion as its budget has been strained by a recent ruling of the Federal Constitutional. The top court ruled in November that the government’s plans to transfer $65 billion (60 billion euros) from unused emergency COVID funding to Germany’s new Energy and Climate Fund is unconstitutional and the climate fund should be reduced by that amount.

By Charles Kennedy for Oilprice.com

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