Energy crisis: Germany nationalizes gas giant Uniper

Energy crisis: Germany nationalizes gas giant Uniper

The German state will nationalize gas giant Uniper, which has been choked by Russian gas cuts, Berlin and the company’s Finnish owner, listed group Fortum, announced on Wednesday. “The government will take over around 99 percent of Uniper,” the Federal Ministry of Economics announced on Wednesday.

“Uniper is a central pillar of Germany’s energy supply,” says Berlin, explaining this radical intervention. The energy company supplies hundreds of German municipalities with gas. This agreement replaces an initial bailout plan presented last July that envisaged Berlin taking a 30 percent stake in Germany’s largest gas importer. In detail, according to the document, Germany is buying all shares of Fortum for a total of 500 million euros at a price of 1.70 euros per share.

“The Right Step”

The government has also indicated that Berlin will also carry out a capital increase of 8 billion euros. Finally, the agreement provides for the repayment by Germany of an 8 billion euro loan that Fortum had granted to its subsidiary.

This “disposal of Uniper is the right move, not only for Uniper but also for Fortum,” Fortum said in a statement. Uniper, the leading gas importer and storage facility in Germany, has been hit hard by the drastic reduction in Russian gas supplies since the war in Ukraine.

8.5 billion euros damage

The company was the main customer of the Russian concern Gazprom in Germany. It now has to source gas on the spot market to honor its contracts, where prices have skyrocketed. Overall, the damage incurred amounted to “8.5 billion euros,” said Fortum on Wednesday.

The situation worsened when Russian giant Gazprom temporarily shut down its Nord Stream 1 pipeline, the main supplier of Russian gas to Germany, in early September. In recent months, Berlin has repeatedly warned of the “Lehman Brothers effect” that a Uniper bankruptcy would have on the energy markets. Given Uniper’s importance, a collapse would shake up the energy market and cause energy shortages for thousands of customers.

Reference: www.europe1.fr

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