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The German government will soon own 99% of energy giant Uniper under a deal with Germany’s top gas importer and its majority shareholder, Finland-based firm Fortum, aimed at preventing a collapse of the German energy and gas suppliers.
The German government, Uniper, and Fortum agreed on Wednesday to amend the bailout package from July with a new deal, which will see Germany holding 99% of Uniper and a state-owned bank providing credit lines to Uniper according to its needs, the German energy giant said in a statement. The agreement involves a capital increase of eight billion euros.
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.
Since the July $15 billion bailout of Uniper, losses at the German company have continued to mount as the energy crisis in Germany and Europe has worsened.
Last week, Uniper said it was in discussions with Germany about transferring an even bigger stake of the troubled utility to the government—now at 30%—which doesn’t rule out nationalization.
That nationalization is now a fact, as the German government will acquire the Uniper shares currently held by Fortum for $1.69 (1.70 euro) per share, resulting in a government stake of approximately 99% in Uniper.
Additionally, state-owned bank KfW will provide financing to Uniper according to its liquidity needs. The credit line provided by Fortum, consisting of a $3.97 billion (4 billion euros) shareholder loan and a 4 billion euros guarantee line, will be replaced by the federal government following the acquisition of the Fortum stake.
“Under the current circumstances in the European energy markets and recognising the severity of Uniper’s situation, the divestment of Uniper is the right step to take, not only for Uniper but also for Fortum,” said Markus Rauramo, CEO and President of Fortum.
“The role of gas in Europe has fundamentally changed since Russia attacked Ukraine, and so has the outlook for a gas-heavy portfolio. As a result, the business case for an integrated group is no longer viable,” Rauramo added.
Uniper CEO Klaus-Dieter Maubach said, commenting on the deal:
“This secures the energy supply for companies, municipal utilities, and consumers.”
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.