Uniper has received billions in financial support from the German government as a result of rising gas and electricity prices after the Russian war in Ukraine.
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The German government on Wednesday approved the nationalization of utility company Uniper as it aims to keep the industry afloat in the wake of a global energy crisis.
After the state had already agreed in July to bail out the major gas importer with a €15 billion ($14.95 billion) bailout deal, the state is now buying Finland’s 56% stake for 0.5 billion euros. The German state will own approximately 98.5% of Uniper.
“Since the stabilization package for Uniper was agreed in July, Uniper’s situation has deteriorated rapidly and significantly; as such, new measures have been agreed to resolve the situation,” Fortum announced in a statement Wednesday morning.
Uniper is Germany’s largest gas importer and is under pressure from greatly reduced gas flows from Russia, causing prices to rise.
Russian state energy giant Gazprom indefinitely halted gas flows to Europe through the Nord Stream 1 pipeline earlier this month, a move Uniper chief executive Klaus-Dieter Maubach told CNBC would exacerbate the company’s struggles.
Fortum will deconsolidate Uniper from the third quarter of 2022, the company said on Wednesday, while Fortum’s EUR 4 billion loan to Uniper will be repaid and the Finnish company released from a parent company guarantee of EUR 4 billion.
“Under the current conditions in the European energy markets and given the gravity of Uniper’s situation, the divestment of Uniper is the right step, not only for Uniper but also for Fortum,” said Fortum CEO Markus Rauramo.
“The role of gas in Europe has fundamentally changed since Russia attacked Ukraine, and so has the prospects for a gas-rich portfolio. As a result, the business case for an integrated group is no longer viable.”
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