German government to take 30% stake in Uniper hit by Russian gas cut

By Aysu Bicer

ANKARA (AA) - The German government will take a 30% stake in the country's largest Russian gas buyer Uniper as it has been hit hardest by the Russian gas curtailment amid the ongoing Russia-Ukraine war.

In recent weeks, Finnish majority owner Fortum has been in talks with the German government on how to stabilize Uniper both regarding its business risks and financial position.

"Fortum, its subsidiary Uniper and the German government have agreed on a comprehensive stabilization package to provide financial relief to Uniper," according to a statement by the company.

The German government has also committed to making available further capital of up to €7.7 billion ($7.8 billion) against the issuance of mandatory convertible instruments.

The state-owned KfW bank will provide Uniper with an additional €7 billion in liquidity support through an increase of its existing credit facility from the current €2 billion to €9 billion.

"We are living through an unprecedented energy crisis that requires robust measures. We were driven by urgency and the need to protect Europe’s security of supply in a time of war," said Fortum’s President and CEO Markus Rauramo.

"For us it is also important that the solution now reached doesn’t require additional capital from Fortum beyond the already provided 8 billion euros of financial support," he noted.

The German parliament adopted several legislative changes enabling the government with a range of regulatory measures to ensure the security of supply in the current energy crisis, allowing failing companies in the energy industry to obtain liquidity assistance in the form of guarantees, loans, or recapitalization by the German state.