Solz signals ‘Lufthansa model’ rescue for Uniper

German Chancellor Olaf Scholz said his government was continuing talks on bailing out Uniper SE, and signaled that bailout tools developed during the pandemic to rescue major companies such as Lufthansa were back on the table. according to what the Bloomberg agency reports.

“During the last crisis, we developed very precise tools – and I promoted this as finance minister – in order to support companies that were pressured by circumstances for which they were not responsible,” Scholz said in an interview with public broadcaster ARD.

Uniper, Germany’s biggest buyer of Russian gas, said on Wednesday it was discussing a possible increase in state-guaranteed loans or even taking equity investments to ensure liquidity.

Germany’s economy ministry has confirmed that talks are ongoing, after a sharp rise in natural gas prices and moves by Russia to cut supplies put the Dusseldorf-based company in a difficult position.

Uniper is “a big company and we said we will work with the company to see what can be done,” Soltz said.

Streams dropped by 60%

The Social Democrat chancellor said the government’s aim was to shield both suppliers and consumers from the spike in gas prices that followed the cut of around 60% in gas flows through a key pipeline from Russia.

“It’s important to be active in both areas. We’re already doing that, by the way, the many loans we have available to the companies that are active as suppliers in this area help to ensure that prices don’t rise,” said Soltz.

Regarding Uniper, Scholz added that the government is “discussing very closely with the company what is the best way to ensure that the gas supply does not experience problems just because a very important company is no longer able to continue its activities”.

Analysts estimate that the interruption of Russian natural gas costs Uniper 30 million euros per day. If the government put in enough money to bail out Uniper for a year, that would translate into a cost of around €11bn.