Uniper to be nationalised

GERMAN GOVT STEPS IN: ENERGY SECTOR IN CRISIS AMID UKRAINE WAR

Gas giant has close to R150.2 billion in gas-related losses.

Germany has reached a deal to nationalise troubled gas giant Uniper, the government said yesterday, as the energy sector reels from the fallout of Russia’s war in Ukraine.

The deal will leave Germany with a 99% stake in the debt-laden gas company, the economy ministry said. “Uniper is a central pillar of German energy supplies,” the ministry said.

Under the agreement, Berlin will inject €8 billion (about R141.3 billion) in cash into Uniper and buy €500 million of shares from its majority shareholder, the Finnish state-owned energy company Fortum.

Fortum will also be repaid for an €8 billion loan it gave Uniper.

“The situation has become much more dramatic” for Uniper since the shutdown in late August of the Nord Stream 1 gas pipeline from Russia to Germany, Economy Minister Robert Habeck said.

One of the biggest importers of Russian gas, Uniper has been squeezed as Moscow has reduced supplies to the continent in the wake of its invasion of Ukraine in February.

Missing deliveries have had to be replaced with expensive supplies from the open market, where prices for gas have skyrocketed.

The German state had already agreed in July to take a 30% stake in Uniper as part of an initial bailout agreement.

But Uniper announced earlier this month that the two sides were exploring a possible nationalisation as the energy crisis showed no signs of abating.

Fortum provided an €8 billion loan to Uniper in January as the price of gas had already begun to climb amid tensions with Moscow before the invasion of Ukraine.

The Finnish company held a near-80% stake in Uniper, which would have been cut to 56% under the July bailout plan.

Fortum said Uniper has accumulated close to €8.5 billion in gas-related losses “and cannot continue to fulfil its role as a critical provider of security of supply as a privately-owned company”.

Fortum chief executive Markus Rauramo said at a press conference: “The role of gas in Europe has fundamentally changed since Russia attacked Ukraine, and so has the outlook for a gas-heavy portfolio.

As a result, the business case for an integrated group is no longer viable.”