Germany confirmed on Wednesday to nationalize struggling gas importer Uniper for 8 billion euros ($7.9 billion) as it scrambles to secure electricity for Europe’s largest economy after Russia cut supplies.
The nationalization of Germany’s top importer of Russian gas is the second move by the Berlin government in a week to rein in an energy company facing a winter crisis.
Shares in Uniper were down around 18.97% at 3.38 euros by 0710 GMT, cashing in on alternative supplies after Moscow cut gas supplies to Germany and triggering a 15 billion euro state bailout in July .
But it soon became clear that the bailout would not be enough to make up for Uniper’s soaring losses, and Germany will now inject another 8 billion euros, in part by buying a stake in Finnish utility Fortum for 1.70 euros a share.
Fortum shares rose about 12 percent to 13.50 euros.
Germany will hold a 99 percent stake in Uniper following the completion of the capital increase and the purchase of Fortum shares (excluding the Finnish company’s subscription rights), the economy ministry said.
“The state will – and this is what we are showing now – do everything possible to keep the company stable in the market at all times,” German Economy Minister Robert Habeck told reporters.
On Friday, Germany took control of a Russian-owned refinery that supplies 90% of the capital’s fuel, placing a unit of Rosneft under the trusteeship of the industry regulator and taking over the Schwert plant.
Under the agreement with Fortum on Uniper, the Finnish utility will receive a 4 billion euro loan from the parent company and release the 4 billion euro parent company guarantee it provided to Uniper earlier this year, Fortum said.
“We’re investing in Uniper with 8 billion equity, effectively acquiring Fortum. Let me say it again: Fortum lost all of its equity investment as a result,” Habeck said.
The Finnish government, which holds a 50.76 percent stake in Fortum, said it would have to accept the deal.
Fortum said in March 2020 that it had made an investment worth 6.5 billion euros for a 69.6 percent stake in Uniper. It later raised its stake to 80%, holding it until it was diluted in July.
Fortum has made an important contribution to the Finnish state budget through dividends for years, while the huge losses of its German subsidiary have put the government under intense public pressure.
In the second quarter alone, Fortum lost 9.1 billion euros due to Uniper’s losses on natural gas trading.
(1 USD = 1.0096 EUR)