Gas crisis: Germany devotes 15 billion euros to the rescue of Uniper
The German government has announced that it will pay 15 billion euros to Uniper, one of the largest gas importers in the world, which has been put in difficulty by the Russian gas supplier Gazprom.
Uniper, the spin-off company from E.ON, depended on Gazprom for an undisclosed but significant share of its gas imports, which it then sold to local utilities and industrial customers. As Russian flows have fallen considerably, the German government has taken measures to avoid a “Lehman Brothers” type effect on the gas markets.
“Everything that matters, we will do, today and as long as it takes”said Chancellor Olaf Scholz, who postponed his summer vacation to announce the measure.
The government will therefore almost quadruple the state bank’s loan to Uniper, which will increase from 2 to 9 billion euros, while allocating 8 billion euros to the purchase of Uniper shares. This will allow the State to hold 30% of the company.
Another €7.7 billion will be made available on an optional basis in the form of a convertible bond (which will also convert into shares).
Most of Uniper was owned by the Finnish state-owned company Fortum, which owned 78% of the shares. The Finnish government had said it would not inject additional funds into the struggling company.
Fortum, on the other hand, has been prohibited from taking over the 4 billion euros in loans granted to Uniper, with the possibility of transforming the loan into shares, and it is required to offer another line of credit of up to 4 billion euros. euros.
Systemically important company
For Germany, Uniper is considered to be of systemic importance as it is a crucial intermediary between gas markets, local utilities and industrial consumers.
“Uniper is a company of central importance; many municipal utilities and industrial companies depend on Uniper gas supplies”said Finance Minister Christian Lindner.
Moreover, Uniper probably has valuable long-term contracts with the Russian company Gazprom, which allow it to buy gas at low prices.
“We will not let a systemically important company like Uniper fall and thus endanger the security of supply in Germany”explained Robert Habeck, Minister of Economy and Climate.
For Uniper, which is losing tens of millions of euros a day as it is forced to buy gas at a high price in spot markets to replace the missing quantities it is contractually bound to receive from Russia, adding extra cash is only a temporary solution.
The company will, however, get additional support thanks to a recent amendment to the Energy Security Act dating back to the 1970s, which allows gas companies to pool their additional costs among all gas customers.
“In order to ensure security of energy supply, we therefore want to use the reallocation mechanism provided for in the Energy Security Act and we will talk about this in Parliament”added Mr. Habeck.
Observers recognize the need to bail out the struggling gas giant. “Saving Uniper is the next necessary evil”said energy-saving expert Claudia Kemfert on Twitter.
However, like the rescue of the banks during the financial crisis of 2008, rescuing energy companies from the disaster they have embarked on seems to leave a bitter taste.
“Once again, taxpayers must pay for companies’ misguided energy decisions”she added.
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