Page 8 - FSUOGM Week 30 2022

FSUOGM COMMENTARY FSUOGM

Germany saves Uniper in biggest

corporate bailout in history

Berlin wants to avoid a likely full system failure if Uniper were allowed to collapse.

GERMANY GERMANY has clinched a deal worth €15bn mandatory convertible instruments.
($15.3bn) to rescue energy giant Uniper from Uniper and other gas importers have also
WHAT: collapse that will involve the company’s partial been given the all-clear to pass on 90% of
Germany's government nationalisation, representing the biggest corpo- replacement costs for missing Russian gas to
has agreed with Fortum rate bailout in the country’s history. their customers, starting in October. German
on a €15bn ($15.3bn) The agreement, reached with Uniper’s state bank development bank KfW has mean-
rescue plan for Uniper. majority Finnish shareholder Fortum following while agreed to raise its existing credit limit for
weeks of tough negotiations, is viewed as nec- Uniper from €2bn to €9bn.
WHY: essary to avoid a wave of other bankruptcies in “I’m pleased and relieved that today’s agree-
The energy utility is on the German energy sector should Uniper go ment stabilises Uniper financially as a sys-
the brink of bankruptcy under. Like other European utilities, Uniper is tem-critical energy partner and preserves it
as a result of soaring struggling with soaring procurement costs for as a single entity,” Uniper CEO Klaus-Dieter
energy procurement energy supplies, and has also been hit hard by Maubach commented in a statement on July 22.
costs, largely due to a steep drop in Russian gas deliveries. This has “This ensures that Uniper can continue to reli-
Russia cutting off gas forced the company to source replacement gas ably supply its customers, including numerous
supply. volumes from the spot market, where prices have municipal utilities and industrial companies,
increased eightfold since a year ago. with energy.”
WHAT NEXT: Uniper estimates it will accumulate $6.3bn in In a press conference, German Chancellor
Germany has promised losses owing to reduced Russian gas deliveries. Olaf Scholz described Uniper as a company “of
to shield consumers Under the bailout deal, the German govern- vital importance for the economic development
from the bump in ment will take a 30% interest in Uniper, lower- of our country and for the energy supply of our
energy prices, and has ing Fortum’s interest from nearly 80% to 56%. citizens.” The measures that have been agreed
suggested it is open to In return, the government will inject €267mn will make a “substantial contribution to the res-
leaving its nuclear power of capital in the company, and also make avail- cue of the company,” allowing it to “stabilise into
plants online for longer. able €7.7bn in capital against the issuance of the future,” he said.

P8 www. NEWSBASE .com Week 30 28•July•2022