Germany: 15 billion euro package to save Uniper

LAST UPDATE: 13:15

Uniper today received €15 billion in guarantees and shares as part of a bailout by the German government. As reported by Reuters, as part of the agreement, the German government will acquire a 30% stake in Uniper.

Uniper’s Finnish parent Fortum will eventually own 56% of the German company, up from around 80% today.

“We are going through an unprecedented energy crisis that requires strong measures,” said Fortum CEO Markus Rauramo, adding that the deal reflected the interests of all parties. “We were driven by urgency and the need to protect Europe’s security of supply in wartime.”

Uniper, Fortum and the German government will work on a long-term stable solution to reform the architecture of the company’s wholesale gas contracts, which has exposed the group to billions in losses in the wake of falling Russian gas supplies.

Uniper became the first major casualty of Europe’s ongoing gas crisis when it sought a government bailout earlier this month.

Germany’s biggest buyer of natural gas from Russia has been pushed to the brink as President Putin slashed supply in retaliation for European sanctions over the invasion of Ukraine.

The German company, created in 2016 from E.ON’s former fossil fuel assets, emerged as the weakest link in the energy system that powers Europe’s largest economy.

Extended contracts with state-owned Gazprom have left the German energy company vulnerable to supply cuts and forced it to cover shortfalls at high prices on the spot market.

Uniper, running out of cash, had already received a 2 billion euro credit line from KfW and started discussions for additional funds after receiving 8 billion euro financing earlier this month from major shareholder Fortum Oyj.

Germany could not afford to let Uniper collapse, as its downfall would deal a heavy blow to the company, hitting industrial businesses and local utilities served by the network.