Germany nationalizes the electricity company Uniper for 8,500 million

The Government of Germany has finally decided to nationalize the electricity company Uniper as part of the new rescue program, taking control of just over 99% of the share capital, as reported in a statement.

Russia cuts gas supplies to Europe until sanctions are lifted for its invasion of Ukraine

Russia cuts gas supplies to Europe until sanctions are lifted for its invasion of Ukraine

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The program starts from the one agreed in July. Thus, the German State will participate in a capital increase of the company worth 8,000 million euros.

The increase will be made at a price of 1.70 euros, which represents a discount of 59.3% compared to the price of 4.18 euros at which Uniper shares closed on Tuesday on the Frankfurt Stock Exchange. As part of this process, Germany will also buy Fortum’s stake for €466 million at the same price.

Before the war began, Fortum’s stake in the German electricity company was valued at around 11,000 million euros.

The German public bank KfW will provide financing to Uniper according to its liquidity needs. However, Uniper has warned that the necessary liquidity will depend on the payments that are necessary to cover the associated costs and margin calls in the financial markets.

“Today’s deal […] ensures the supply of energy for companies, municipalities and consumers. The amendment to the July stabilization package was necessary in view of the intensification of the energy crisis”, stressed the CEO of Uniper, Klaus-Dieter Maubach.

The parties have also agreed that Uniper will have a purchase preference in the event that the firm decides to divest some or all of its nuclear and hydroelectric generation assets in Sweden until the end of 2026.

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As part of this process, Fortum will deconsolidate Uniper from its accounts. This will have a positive effect, because it will no longer have to record provisions and accounting adjustments in respect of Uniper’s losses.

Uniper recorded losses of 12,418 million euros in the first six months of 2022, in contrast to the negative result of 20 million in the same period of the previous year, as a result of the impact of the substantial reduction in gas supply from Russia.

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