Germany is going to nationalize the largest gas company

Wednesday, September 21, 2022 | 9:48 a.m.

Germany is going to nationalize the energy giant Uniper, due to its growing problems in coping with skyrocketing gas prices since the start of the Russian invasion of Ukraine, the German government and the Finnish owner of the company, the public group Fortum, announced on Wednesday.

“The government will take over around 99% of Uniper,” the German Economy Ministry said in a statement.

“Uniper is a central pillar of German energy supply,” added the portfolio to justify the intervention of the firm that supplies gas to hundreds of German municipalities.

The deal replaces an initial aid plan unveiled in July, under which Berlin would have taken a 30% stake in the group, Germany’s top gas importer, the AFP news agency reported.

Berlin will buy all the shares of Fortum at a price of 1.70 euros per share, for a total of 500 million euros, according to the document.

Germany will also carry out an 8 billion euro capital increase in the company, the government said.

This “divestment of Uniper is the right step, not only for Uniper but also for Fortum,” the Finnish group said in a statement.

The company was the main client of the Russian giant Gazprom in Germany. To fulfill his contracts, he will now have to source the gas on the spot market, where prices have soared since the start of the war in Ukraine in February.

In total, the losses suffered amount to “8.5 billion euros,” Fortum said on Wednesday.

The situation worsened when Gazprom temporarily closed its Nord Stream 1 pipeline, the main supplier of Russian gas to Germany, in early September.

Berlin has warned in recent months of the “Lehman Brothers effect” that a Uniper bankruptcy would have on energy markets.

Given Uniper’s importance, its collapse would rock the energy market and cause power shortages for its thousands of customers.

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