Germany agrees to bail out energy giant Uniper as Russia squeezes gas supplies
Uniper has been in talks with the German government about a possible rescue operation.
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Germany on Friday agreed to rescue Uniper with a 15 billion euro ($15.24 billion) rescue deal, as the beleaguered energy company becomes the first major casualty in Russia̵[ads1]7;s natural gas squeeze.
The rescue package will result in the German state taking 30% of the shares in Uniper.
The energy company was the first in Germany to sound the alarm over skyrocketing energy bills and submitted a rescue application for state aid earlier this month. As Germany’s biggest importer of gas, it has been hit hard by sharply reduced flows via pipelines from Russia, which has sent prices skyrocketing.
In a statement, Finnish majority owner Fortum said Uniper and the German government had agreed on a “comprehensive stabilization package” to provide it with financial relief.
“We are living through an unprecedented energy crisis that requires robust measures. After intensive but constructive negotiations, we found a solution that satisfactorily met the interests of all parties involved,” said Fortum’s president and CEO Markus Rauramo in the statement.
“We were driven by urgency and the need to protect Europe’s security of supply in a time of war.”
Russian gas supplies to Europe have fallen since the unprovoked invasion of Ukraine earlier this year – and the subsequent sanctions imposed on Moscow by the West.
Uniper has received only “a fraction of its contracted gas volumes” from Russian gas giant Gazprom since mid-June, according to Fortum, meaning it has had to buy gas at much higher spot market prices. This has had serious consequences for Uniper’s financial position, added Fortum.
— CNBC’s Sam Meredith contributed to this report.
