Germany confirms nationalization of gas importer Uniper
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The repercussions of the West’s draconian sanctions against Russia land Berlin in hot water as it struggles to secure power for Europe's largest economy.
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The Uniper logo seen at the utility's firm headquarters in Duesseldorf, Germany, July 8, 2022 (Reuters)
Germany confirmed the nationalization of struggling gas importer Uniper on Wednesday, adding another $7.9 billion to its rescue as Berlin struggles to secure power for Europe's largest economy in the aftermath of the West’s draconian sanctions against Russia.
Nationalizing Germany's largest importer of Russian gas is the government's second step in a week to take control of an energy company, and it is part of a broader European response to the winter crisis, which includes France taking over EDF.
Uniper, whose shares fell as much as 39% to 2.55 euros, depleted its cash reserves by purchasing alternative supplies after Moscow cut gas supplies to Germany, triggering a 15 billion euro state rescue package in July.
However, as with other European energy companies that have struggled to cope with soaring gas prices, it quickly became clear that the bailout was insufficient to cover Uniper's growing losses, and Germany will now inject even more cash, partly by buying out Finnish utility Fortum's stake for 1.70 euros per share.
Fortum shares were trading at 13.82 euros, up about 14%.
Germany will own 99% of Uniper after completing a capital increase and the Fortum share purchase, which excludes the Finnish firm's subscription rights, according to the German Economy Ministry.
Under Wednesday's agreement, Fortum will not bear Uniper's third-quarter losses, as it would have done under the July agreement. This will save Fortum 5 billion euros.
Germany’s winter energy crisis
The German government has lately approved a $64.7 billion relief package, which includes continued cheaper public transport and tax breaks for energy-reliant companies, as they have been affected the most by the biggest surge in prices.
According to the Federal Statistical Office, Germany's inflation rose to almost 8% in August after declining slightly in the months of June and July.
The consecutive sanctions against Moscow prompted a race against the clock to diminish Germany's reliance on Russian gas before winter.
13 EU nations have either ceased getting Russian gas entirely or are only receiving a portion of it due to the temporary blockage of the Nord Stream pipeline 1, according to TASS.
This is the third relief package by the German government this year. The two previous ones included a gasoline rebate that expired at the end of August, the €9 transportation ticket, and an energy price flat payment to workers.
