Europe Energy Crisis: Germany Nationalises Country's Largest Gas Importer Uniper
The German government on Wednesday (Sep 21) announced that it has nationalised gas behemoth Uniper in order to stabilise the company that supplies about 40 percent of the country’s gas supply.
Uniper has suffered crushing losses over the past months due to skyrocketing gas prices resulting from Russia’s war on Ukraine.
Uniper is Germany’s largest importer of natural gas and has been hit hardest by the curtailments of Russian gas imports. The company's gas trading activities are critical for Germany’s energy supply and play an important role for the European energy sector
The government will take over nearly 99 percent of Uniper’s shares and increase the company’s capital stock by about eight billion euros, the country's Ministry for Economic Affairs and Climate Action ministry (BMWK) said in an official statement.
“This will create a clear ownership structure that allows us to save Uniper and thereby also the energy supply for businesses, local utilities and consumers,” the statement added. “
The move to nationalise the gas firm had become inevitable after the stop of gas flows from Russia at the end of August resulted in further increases to already high gas prices spike and worsened the company’s financial situation. Long-term delivery contracts prevented the company it from passing on price increases to its customers.
The Russian gas cut-off came after months of uncertainty regarding gas imports through the key offshore pipeline Nord Stream 1, which the Russian government has been accused of “weaponising” as part of its war effort to subdue Ukraine and undermining European solidarity with its smaller neighbour.
As part of the deal to save its largest gas supplier, Germany will buy shares worth about 500 million euros from Uniper’s current majority owner, Finnish energy company Fortum, for a share price of 1.70 euros. Moreover, the government agreed to take over a shareholder loan owed by Fortum and other debt worth some eight billion euros as well.
Earlier in July, Germany government acquired a 30 percent stake in Uniper in a bid to save it from bankruptcy. As a part of the bailout package, the government announced that it will provide public loans of up to 7.7 billion euros in bonds and expand a credit line for 9 billion euros from state-owned development bank KfW.
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