Germany nationalises Uniper with $8 billion deal in dash to secure gas By Reuters
Stock Markets 48 minutes ago (Sep 21, 2022 11:51)
© Reuters. FILE PHOTO: The Uniper logo is seen at the utility’s firm headquarters in Duesseldorf, Germany, July 8, 2022. REUTERS/Wolfgang Rattay/File Photo
By Kirsti Knolle and Anne Kauranen
BERLIN/HELSINKI (Reuters) -Germany confirmed struggling gas importer Uniper’s nationalisation on Wednesday, adding another 8 billion euros ($7.9 billion) to its rescue as Berlin scrambles to secure power for Europe’s largest economy after Russian supply cuts.
Nationalising Germany’s largest importer of Russian gas is the second move in a week by the government to take control of an energy business and is part of a wider European response to the winter crisis, including France taking over EDF (EPA:EDF).
Germany last week also took control of a Russian-owned oil refinery, which supplies 90% of the capital’s fuel, putting a Rosneft unit under the trusteeship of the industry regulator and taking over the Schwedt plant.
Uniper, whose shares fell as much as 39% to 2.55 euros, burned through its cash buying alternative supplies after Moscow cut gas flows to Germany, triggering a 15 billion euro state rescue package in July.
But as with other European energy companies that have failed to cope with soaring gas prices, it soon became clear that the bailout was not enough to cover Uniper’s deepening losses and Germany will now inject yet more cash, partly by buying out Finnish utility Fortum’s holding for 1.70 euros per share.
Fortum shares were up around 14% at 13.82 euros.
After completing a capital increase and the Fortum share buy, which excludes the Finnish firm’s subscription rights, Germany will hold 99% of Uniper, its economy ministry said.
“The state will – that’s what we’re showing now – do everything possible to always keep the companies stable on the market,” German economy minister Robert Habeck told reporters.
Habeck also said Berlin will impose a gas levy on consumers as planned from the start of October to help importers with the additional costs of replacing Russian gas.
However, there will be an analysis of whether that levy is in accordance with German law after the nationalisation of Uniper, which could take about three months, he said.
German gas importers face losses because they cannot directly pass the higher gas prices on to their customers.
While German consumers have been largely protected from the price hikes so far, other Europeans are paying very high prices for their energy. Fortum has taken on sizeable Uniper losses, which has caused discontent in Finland.
Fortum said that under the deal it will be paid back a 4 billion euro parent company loan and released from a 4 billion euro parent guarantee it had given Uniper earlier this year.
“We are investing in Uniper with 8 billion in equity and are effectively buying Fortum out,” Habeck said, while Finland’s government, which has a 50.76% holding in the Finnish utility, said it would have to live with the deal.
Fortum said in March 2020 it had made investments worth 6.5 billion euros to give it a 69.6% stake in Uniper. It later raised its stake to 80%, which it held until the July dilution.
For years, Fortum has been a significant contributor to the Finnish state budget through dividends, but in the second quarter of this year alone, it reported a loss of 9.1 billion euros due to Uniper’s losses in gas trading.
Under Wednesday’s agreement, Fortum will not take on Uniper’s losses for the third quarter, as it would have under the July deal. This will free up 5 billion euros to Fortum.
($1 = 1.0096 euros)
Germany nationalises Uniper with $8 billion deal in dash to secure gas
By Senad Karaahmetovic
A Citi strategist took note of a moderate addition of bearish positioning after another red-hot US CPI print.
New “painful” longs have been added, which…
BERLIN (Reuters) – The German government will take control of some assets in Russia as a result of the nationalisation of gas importer Uniper, a German government spokesperson…
(Reuters) – Amazon.com Inc (NASDAQ:AMZN) said on Wednesday it would add 2.7 gigawatts of clean energy capacity through several new projects as it seeks to use 100% renewable…
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.