Reports related to this article:
Plant(s): View 3 related plants in PECWeb
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany's government has taken a 99% stake in the country's largest gas importer, Uniper SE (Dusseldorf, Germany), to prevent it from going bankrupt due to Russia's gas supply cuts.
The government will take control of the company following a deal with Uniper's Finnish parent company, Fortum Oyj (Espoo, Finland), to acquire Fortum's 56% stake. The adjusted stabilization package, which includes a payment of almost 500 million euro (US$483 million) to Fortum, will amount to 8 billion euro (US$7.7 billion). In August, Industrial Info reported that the government had agreed on a 15 billion-euro (US$15.1 billion) rescue package for Uniper, for which it took a 30% stake. Uniper supplies about 40% of all gas customers in Germany, with most of its gas traditionally bought from Russia. For additional information, see August 2, 2022, article - Germany Forced to Bail Out Uniper in $15 Billion Deal.
For the past six months Uniper has been financially hammered by the cost of buying gas on the open market at record breaking pieces due to Russia's strangling of gas supplies to Germany and Europe following its invasion of Ukraine earlier this year. According to Fortum, Uniper has "accumulated close to 8.5 billion euro (US$8.2 billion) in gas-related losses" to date. The bulk of the rescue package will see Fortum's 4 billion-euro (US$3.86 billion) loan to Uniper repaid, while Fortum will also be released from a 4 billion euro (US$3.86 billion) parent company guarantee.
The government stated: "It creates a clear ownership structure in order to secure Uniper and thus the energy supply for companies, public utilities and consumers. The adjustment of the stabilization package became necessary because Uniper's capital requirements increased significantly due to the complete cessation of the contractually agreed gas deliveries from Russia and the sharp rise in gas prices. The resulting increase in replacement procurement costs has exacerbated the plight of Germany's largest importer of Russian gas."
"Under the current circumstances in the European energy markets and recognising the severity of Uniper's situation, the divestment of Uniper is the right step to take, not only for Uniper but also for Fortum," explained Markus Rauramo, chief executive officer and president of Fortum. "The role of gas in Europe has fundamentally changed since Russia attacked Ukraine, and so has the outlook for a gas-heavy portfolio. As a result, the business case for an integrated group is no longer viable. While divesting Uniper will be a painful step for the company, its employees and investors, Fortum will be able to look to the future and will focus on its core Nordic business of CO2-free electricity and heat as well as sustainable customer solutions."
Uniper chief executive Klaus-Dieter Maubach said: "Today's agreement...allows us to continue our business and to fulfill our role as a system-critical energy supplier. This secures the energy supply for companies, municipal utilities, and consumers. The amendment of the stabilization package announced in July was necessary against the backdrop of the further intensification of the energy crisis. At Uniper, we are aware of our responsibility for Germany and Europe. We are committed to doing our part to overcome this crisis and to restructure the energy supply in this country."
In recent weeks, Germany's government seized control of the subsidiaries of Russian oil major Rosneft to secure its shares in three German oil refineries. In an effort to secure its energy supply, the takeover of Rosneft's two German subsidiaries, the government will control its stake in the PCK refinery in Schwedt, northeast of Berlin, MiRo in Karlsruhe, and Bayernoil in the Bavarian town of Vohburg. Rosneft had controlled around 12% of German oil refining capacity. For additional information, see September 26, 2022, article--Germany Seizes Russia's Rosneft Refineries.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The government will take control of the company following a deal with Uniper's Finnish parent company, Fortum Oyj (Espoo, Finland), to acquire Fortum's 56% stake. The adjusted stabilization package, which includes a payment of almost 500 million euro (US$483 million) to Fortum, will amount to 8 billion euro (US$7.7 billion). In August, Industrial Info reported that the government had agreed on a 15 billion-euro (US$15.1 billion) rescue package for Uniper, for which it took a 30% stake. Uniper supplies about 40% of all gas customers in Germany, with most of its gas traditionally bought from Russia. For additional information, see August 2, 2022, article - Germany Forced to Bail Out Uniper in $15 Billion Deal.
For the past six months Uniper has been financially hammered by the cost of buying gas on the open market at record breaking pieces due to Russia's strangling of gas supplies to Germany and Europe following its invasion of Ukraine earlier this year. According to Fortum, Uniper has "accumulated close to 8.5 billion euro (US$8.2 billion) in gas-related losses" to date. The bulk of the rescue package will see Fortum's 4 billion-euro (US$3.86 billion) loan to Uniper repaid, while Fortum will also be released from a 4 billion euro (US$3.86 billion) parent company guarantee.
The government stated: "It creates a clear ownership structure in order to secure Uniper and thus the energy supply for companies, public utilities and consumers. The adjustment of the stabilization package became necessary because Uniper's capital requirements increased significantly due to the complete cessation of the contractually agreed gas deliveries from Russia and the sharp rise in gas prices. The resulting increase in replacement procurement costs has exacerbated the plight of Germany's largest importer of Russian gas."
"Under the current circumstances in the European energy markets and recognising the severity of Uniper's situation, the divestment of Uniper is the right step to take, not only for Uniper but also for Fortum," explained Markus Rauramo, chief executive officer and president of Fortum. "The role of gas in Europe has fundamentally changed since Russia attacked Ukraine, and so has the outlook for a gas-heavy portfolio. As a result, the business case for an integrated group is no longer viable. While divesting Uniper will be a painful step for the company, its employees and investors, Fortum will be able to look to the future and will focus on its core Nordic business of CO2-free electricity and heat as well as sustainable customer solutions."
Uniper chief executive Klaus-Dieter Maubach said: "Today's agreement...allows us to continue our business and to fulfill our role as a system-critical energy supplier. This secures the energy supply for companies, municipal utilities, and consumers. The amendment of the stabilization package announced in July was necessary against the backdrop of the further intensification of the energy crisis. At Uniper, we are aware of our responsibility for Germany and Europe. We are committed to doing our part to overcome this crisis and to restructure the energy supply in this country."
In recent weeks, Germany's government seized control of the subsidiaries of Russian oil major Rosneft to secure its shares in three German oil refineries. In an effort to secure its energy supply, the takeover of Rosneft's two German subsidiaries, the government will control its stake in the PCK refinery in Schwedt, northeast of Berlin, MiRo in Karlsruhe, and Bayernoil in the Bavarian town of Vohburg. Rosneft had controlled around 12% of German oil refining capacity. For additional information, see September 26, 2022, article--Germany Seizes Russia's Rosneft Refineries.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
