SHARE
COPY LINK

ENERGY

German government to take 30 percent stake in gas company Uniper

The German government will take a 30-percent stake in energy giant Uniper as part of a rescue plan to shield it from the energy crisis caused by the war in Ukraine, the company said Friday.

The Uniper headquarters in Düsseldorf.
The Uniper headquarters in Düsseldorf. Photo: picture alliance/dpa | Oliver Berg

The plan “comprises a capital increase of approximately €267 million ($271 million) for an issue price of €1.70 per share”, which will lead to “a shareholding of the (state) in Uniper of approximately 30 percent”, Uniper said in a statement.

The group will benefit from a public loan of “up to €7.7 billion” in mandatory convertible bonds that will eventually become shares.

An increase is also planned in the credit line available to the firm via the public lender KfW from two to nine billion euros, Uniper said.

“Uniper is a company of vital importance for the economic development of our country and for the energy supply of our citizens,” Chancellor Olaf Scholz told reporters after the announcement.

READ ALSO: Uniper asks Germany for bailout as gas crisis causes heavy losses

Uniper also said the German government was planning to introduce a general mechanism for all gas importers to pass through the replacement costs for missing Russian gas to consumers as of October 1st.

This measure, long requested by the energy giant, could cause the country’s gas bills to explode – a development Scholz pledged to cushion with government measures.

READ ALSO: ‘You’ll never walk alone’: Germany’s Scholz pledges more energy relief measures

Moves by Moscow to curtail supplies to Germany since mid-June have forced Uniper to turn to the more expensive spot market for gas to supply its customers, leaving the energy group saddled with the extra cost.One of the biggest importers of Russian gas, Uniper is a key part of Germany’s energy infrastructure and its biggest gas storage operator.

Chancellor Olaf Scholz speaks about the energy situation in Germany.

Chancellor Olaf Scholz speaks about the energy situation in Germany. Photo: picture alliance/dpa | Britta Pedersen

While the German government has mandated stores to be filled ahead of the winter, the short supply has also forced Uniper to withdraw gas from its own booked storage capacities.

The group made a request for a bailout from the German government on July 8th.

Since then, negotiations have been ongoing between Uniper, the German government and the Finnish Uniper parent company Fortum.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

POLITICS

EU ministers urge unity after Germany’s energy ‘bazooka’

EU finance ministers on Monday pleaded for unity after Germany announced a €200 billion plan to help German households and businesses pay for high energy prices, amid accusations that the EU's biggest economy was acting alone.

EU ministers urge unity after Germany's energy 'bazooka'

Europe is struggling with historically high energy prices as it faces an early autumn cold snap and a coming winter almost certainly to be endured without crucial Russian gas supplies because of the war in Ukraine.

Many EU countries have announced national programmes to shield consumers from the high prices. But Germany went the furthest on Friday when it announced its mammoth plan, which will see help pouring to Germans for two years.

Arriving to talk with his eurozone counterparts, German Finance Minister Christian Lindner insisted the spending was “proportionate” to the size of Germany’s economy and said his goal was to use as little of the money as possible.

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

But Germany’s largesse rankled several EU capitals, some of which feared their industries could take severe blows while Germany’s sits protected, deforming the EU’s single market.

Outgoing Italian prime minister Mario Draghi has slammed Berlin for its lack of solidarity and coordination with EU partners.

French Finance Minister Bruno Le Maire, without directly criticizing Berlin, called on partners to agree a common strategy against the price shock and for countries to refrain from going it alone.

“The more this strategy is coordinated, united, the better it is for all of us,” he said.

Risk to ‘European unity’

Others pointed to the unprecedented solidarity shown in the Covid-19 crisis in which the 27 EU nations, against all expectations, approved a jointly financed €750 billion recovery plan.

“Solidarity is not only on the German shoulders, I think this is something that we have to deliver at European level,” said EU economics affairs commissioner Paolo Gentiloni.

“We have very good examples from the previous crisis on how solidarity can react to a crisis and also reassure financial markets. I think that this is our goal,” he said.

While a Covid-style recovery plan is not in the cards for now, Le Maire said €200 billion in loans and €20 billion in aid should be devoted to REPowerEU, a programme to help countries break their dependence on Russian gas.

READ ALSO: Will Germany set a gas price cap – and how would it work?

Bruegel, a highly influential think tank in Brussels, called the German plan a spending “bazooka” that many EU countries were unable to match, creating a potential source of animosity.

“If the German gas price brake gives German business a much better chance to survive the crisis than, say, Italian business, economic divergences in the EU could be deepened, and European unity on Russia undermined,” it said in a blog.

SHOW COMMENTS