German to Inject $39bn to Rescue Energy Giant, Uniper
The German government may be on the way to staking up to $39 billion (40 billion euros) in the attempt to save Uniper, the country’s largest natural gas importer.
The money would be an addition to what is regarded as a multi-billion euro rescue package and nationalization move by German government since the organisation headed for bankruptcy following a stagnation cause by the Russian hostilities in Ukraine.
Last month, the German government, Uniper, and the company’s majority shareholder, Finland-based firm Fortum, agreed on a plan to nationalize the energy giant, aimed at preventing a collapse of the German energy and gas suppliers.
Under the arrangement, Germany will own 99% of Uniper after the nationalization, which involves a capital increase of $7.9 billion (8 billion euros), is completed.
Germany is looking forward to saving its energy companies, which have been amassing losses with the lack of contracted Russian gas supply and the high price they have had to pay on the spot market to replace lost Russian volumes.
Germany’s business daily, Handelsblatt reported last weekend, quoting financial and government sources, that since the July $15 billion bailout of Uniper, losses at the German company have continued to mount as the energy crisis in Germany and Europe has worsened.
The report said Uniper now may need another liquidity injection after the government scrapped an idea to introduce a gas levy to all consumers, which would have gone to energy companies.
Observers say, the rescuing of the biggest gas importer in Germany is becoming increasingly expensive for the government, which may have to splash a small to mid-double-digit sum in euros.
In total, the new rescue package could cost the government another $9.8 billion (10 billion euros) to $39 billion (40 billion euros), a source familiar with the discussions told Handelsblatt.
The business daily said after the scrapping of the idea of a gas levy, Uniper will now need additional liquidity assistance, the newspaper reported. The German government could come up as soon as next week with a new concept on how to further help the company.