Germany is nearing a nationalization of gas importer Uniper in the wake of an energy crisis that has left the government of Europe’s top economy with few other options to keep its industry going.
Germany is set to buy Fortum’s 78% stake in Uniper and inject a further €8-billion ($8 billion) into the energy group that is expected to give Berlin a stake of more than 90%.
Uniper, Germany’s largest importer of Russian gas, burned through its cash reserves sourcing gas on the spot market after Russia cut flows to Germany, triggering a rescue package with Berlin which was agreed in July.
Uniper said it was in final discussions with the government and Fortum to amend the July bailout package which has proved insufficient given spiralling gas prices.
“As a result, it is envisaged that the Federal Government will obtain a significant majority stake in Uniper,” the company said, adding a final agreement has not yet been concluded.
The capital injection from the German government will bring the total bailout package used to stabilise Uniper to at least €29-billion.
Europe’s stand-off with key energy supplier Russia over the Ukraine crisis has hit Germany’s energy sector hard. The German government has already had to put Gazprom Germania and a subsidiary of Russian oil company Rosneft under trusteeship – a de facto nationalization.
Uniper’s smaller peer VNG, also an importer of Russian gas, had to request state aid too, to stay afloat.
Fortum said that the Uniper deal will include the “return of the financing Fortum granted to Uniper” which the Finnish group has estimated at €8-billion.
For the Finnish group, the deal will end an ill-fated investment in Uniper that started in 2017 and was resisted by the German group over concerns it could be broken up by its major shareholder.
Finland’s minister in charge of state-owned companies Tytti Tuppurainen said it was too early to comment on the details of the deal before it was finalized.
“We consider it important that Fortum gets back the €8-billion funding it gave to Uniper, and, overall, that Finnish taxpayers won’t be subjected to unreasonable expenses because of this,” she told reporters.
A definitive agreement on the nationalization of Uniper will be unveiled on Wednesday, sources have said.
“We need the state as the main shareholder in order to survive the gas crisis and to master the energy transition in the long term,” Uniper’s works council chief Harald Seegatz told Rheinische Post.