Berlin, Dusseldorf, Espoo The federal government nationalizes Germany’s largest gas importer Uniper. The company, its Finnish parent company Fortum and the Federal Ministry of Economics published corresponding statements on Wednesday morning.
The federal government is granting the ailing company a capital injection of eight billion euros, which increases the federal stake to 93 percent. The federal government is buying the remaining share of the Finnish state-owned company Fortum of around six percent for 480 million euros.
Investors were startled by the news: Uniper shares have meanwhile fallen by up to 39 percent. The papers of the previous majority owner Fortum, on the other hand, are up almost 18 percent on the Helsinki stock exchange.
Federal Minister of Economics Robert Habeck (Greens) said at a press conference on Wednesday morning that the situation had “deteriorated significantly for Uniper” since the first rescue operation. The country is in a dynamic situation, is constantly being confronted with new challenges and has to continuously sharpen the measures.
With the first rescue package in July, the federal government had already approved a capital increase that was supposed to give it a 30 percent stake. In view of the Russian gas supply freeze via the Nord Stream 1 pipeline, Uniper received less gas than expected at the time, and prices continued to rise.
On Wednesday morning, the European gas price peaked at 211 euros per megawatt hour. Before the Russian war of aggression, the gas price usually fluctuated between ten and twenty euros. At these high prices, Uniper has to buy gas on the world market in order to meet its own delivery obligations. It was therefore necessary to adjust the rescue package.
KfW grants further loans to Uniper
As a further pillar of the support campaign, the state-owned KfW bank is granting Uniper four billion euros each in loans and guarantees. Part of this is to be used to replace a line of credit from Fortum. According to Habeck, the federal government will offset a total of EUR 7.5 billion in credit lines from Fortum to Uniper.
If necessary, KfW will provide Uniper with additional liquidity to bridge the gap until the completion of this capital increase, according to a Fortum stock exchange release. Nationalization allows the federal government to take further rescue steps if these become necessary. At an extraordinary general meeting in the fourth quarter, the rescue plan is to be presented to shareholders for a vote.
Uniper boss Klaus-Dieter Maubach welcomed the entry of the federal government. “This makes it possible to stabilize Uniper in the long term,” he said. His company finds itself in a tense debt situation. “Our losses are increasing by 100 million euros every day,” said Maubach. In total, the aggregate losses amounted to 8.5 billion euros. The head of the company spoke of a “dynamic negative development”.
The service union Verdi welcomed the nationalization of Uniper. “The takeover by the federal government is necessary to ensure security of supply, and it is in the interests of the employees,” explained federal board member Christoph Schmitz.
According to him, insolvency would be an incalculable risk for the gas market in Germany and for the entire energy and heat supply. “Germany needs Uniper, and Uniper needs Germany,” emphasized Uniper Group Works Council Chairman Harald Seegatz.
State takes control of energy company Uniper
The takeover is the right step to stabilize the company. With around 5,000 employees in Germany alone, Uniper is systemically important for the energy supply and needs permanent support. “The federal government must see its stake in Uniper as a long-term commitment,” said Seegatz.
Robert Habeck: Gas surcharge is coming
Habeck emphasized that the gas surcharge will come despite the nationalization of Uniper. At the same time, he announced changes to the levy: “Today we are initiating the departmental vote,” said the minister. He found a legally secure way to shake off free riders.
In principle, the gas allocation is a done deal. However, Habeck had to take heavy criticism for technical errors. According to the current regulation, it is possible for companies that have recently made high so-called excess profits to benefit from the gas surcharge. Habeck wants to correct that. The group of eligible companies should be “limited to market-relevant and needy utilities,” the ministry said.
The Economics Minister wants to introduce the gas surcharge, but is also waiting for a financial constitutional review of this.
(Photo: dpa)
The minister emphasized that the question of whether the levying of the surcharge for a state-owned company, such as Uniper will be in the future, is constitutional is justified and must be answered. “The financial constitutional tests are running in the relevant departments,” said Habeck.
The Ministry later added that “the Federal Ministry of Economics has not yet received a complete legal examination by the Federal Ministry of Finance, which clears up the doubts related to the financial constitution”.
This representation was contradicted by circles in the Federal Ministry of Finance. Last Friday, in the presence of Chancellor Olaf Scholz (SPD), a decision was made on the gas levy that would also apply in the event of Uniper being nationalized.
The Chancellery, the Ministry of Justice and the Ministry of Finance had no legal doubts about the gas levy planned by Habeck. A corresponding assessment is available from the Federal Ministry of Economics. A further test was neither discussed nor planned.
Nationalization of other gas importers?
Habeck said the gas surcharge will be levied on all gas consumers from October 1st. The proceeds go to gas companies, whose procurement costs have risen because Russia has stopped supplying gas. The levy is intended to offset 90 percent of the increased procurement costs. The levy is a bridge to ensure Uniper’s financial solidity, said Habeck.
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Could the other two major gas importers – VNG and Sefe (formerly Gazprom Germania), which is under federal trust – also be nationalised? Habeck said the state “will do everything necessary to keep the company stable on the market”. One way to achieve this goal is the gas surcharge.
The surcharge for all gas users is currently set at around 2.4 cents per kilowatt hour. According to the current status, the first advance payments should be due at the end of October.
Habeck received support from the coalition to stick to the gas levy. The legal concerns about the levy are outdated, said Michael Kruse, energy policy spokesman for the FDP parliamentary group. “Even if Uniper is nationalized, the Ministry of Economics should introduce the gas surcharge as planned,” said Kruse.
On the other hand, Bernd Westphal, economic policy spokesman for the SPD parliamentary group, said that he considered the gas levy “still wrong”. There should be no additional burden for private households and companies. The money must come from the federal budget.
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First publication: 09/21/2022, 09:52 a.m. (last updated on 09/21/2022, 02:59 p.m.).