Dusseldorf, Frankfurt The EU Commission has approved German billions in aid for the ailing gas importer Uniper. The federal government can support the company with up to 34.5 billion euros, as the competition watchdog announced on Tuesday evening. However, the conditions are sometimes tougher than expected by some observers.
The company has a number of businesses to sell by 2026. This includes the state-of-the-art hard coal-fired power plant Datteln 4 in the northern Ruhr area, which only went into operation in 2020. The group also has to part with the gas power plant in Gönyu, Hungary, and with it the entire Hungarian business.
The head of the works council and deputy head of the supervisory board, Harald Seegatz, spoke of “hard cuts” for Uniper on Wednesday morning. “In particular, the information about the sale of Datteln 4 and Uniper Wärme is particularly painful for the affected colleagues in Germany a few days before Christmas.” However, it is important for the company that the stabilization can be carried out now. It must agree on a forward-looking strategy.
Forced sale should depress the price of dates 4
It was clear that Uniper would have to part with business areas. The specific conditions come as a surprise, however. Some time ago, a former company insider told the Handelsblatt that if Uniper had to sell Datteln 4, it would be “a political decision” and “not necessarily understandable from a strategic point of view”.
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He estimated that Uniper could possibly generate between 700 million and one billion euros from the sale of the hard coal-fired power plant. If Uniper is forced to sell the power plant, this will have a negative impact on the sale price because buyers know that Uniper has to sell. As the last coal-fired power plant to go into operation in Germany, Datteln 4 was repeatedly the target of protests by climate protection groups.
According to information from the Handelsblatt, it was originally also up for debate that Uniper would have to sell its power plants in the Netherlands. An insider with information on the negotiations said on Wednesday it was a success of the negotiations that the federal government and Uniper managed to dissuade the commission from forcing the company to sell the Dutch business. A complete withdrawal from the country would have been a heavy blow.
The insider said about the conditions now agreed: The power plant in Hungary is probably good and can be sold quickly. This does not apply to Datteln IV. The power plant mainly produces electricity for Deutsche Bahn. It is unclear who should buy it.
Federal government buys 99 percent of all Uniper shares
With the decision from Brussels, the way has now finally been cleared for the state to rescue Uniper. Stabilization measures would now be implemented immediately, the group announced on Tuesday evening. This means that the federal government is now buying 99 percent of all Uniper shares. 70 percent come from the previous majority owner, the Finnish state-owned company Fortum. The rest comes from smaller shareholders. Those who do not want to give their Uniper shares to the state will only hold a tiny stake in the company in the future.
The state, as the new Uniper owner, brings eight billion euros in equity for the group. With this, Uniper is initially paying out Fortum. The Finns had granted Uniper a total of eight billion euros in loans. But soon the federal government wants to inject further money through a capital increase. Overall, the Uniper rescue could cost up to 34.5 billion euros.
The EU cleared the final hurdle to nationalization.
(Photo: dpa)
Uniper needs government aid worth billions because the gas importer got into trouble as a result of the war in Ukraine. Russia no longer supplies natural gas to Germany via pipelines. However, a large part of Uniper’s business model was based on these deliveries: Uniper received cheap gas from Russia and sold it at a higher price to more than 1,000 municipal utilities and industrial companies in Germany.
Now Uniper has to supply its own customers without getting cheap supplies from Russia. Instead, the company buys the necessary gas at high prices on the world market – a permanent loss-making business.
In the past few months, Uniper had kept its head above water with billions in loans from the state development bank KfW. The company now wants to repay these loans. The previous Uniper shareholders had already approved the measure on Monday.
State wants to reduce Uniper shares to 25 percent by 2028
The federal government has already provided a bit of a strategy: until the end of 2026, Uniper may only make purchases that ensure the company’s survival or contribute to its decarbonization. In addition, between 2022 and 2024, Uniper must make a personal contribution of 30 percent per year from its income. By 2028 at the latest, the federal government wants to reduce its stake in Uniper to just over 25 percent.
The state aid requirements that the EU Commission has imposed on Uniper also include the sale of the district heating business in Germany, the electricity business in North America without liquefied natural gas (LNG) and hydrogen, and the business with marine fuels of Uniper Energy DMCC in the Middle East.
In addition, the group must sell various pipeline holdings and the 84 percent stake in the Russian Unipro, as well as its international helium business.
>> Read also: EU Commission gives the green light for the Uniper takeover for the time being – CFO is leaving
State aid is subject to European rules. The EU Commission, as the guardian of fair competition, checks whether it is discriminating against the market. For example, if Germany were to subsidize a company so heavily that it could force a competitor from another country out of the market, this would not be compatible with EU law. This is also to ensure that no monopolies arise that could arbitrarily increase prices.
More: Uniper shareholders pave the way for nationalization.