The European Commission on Tuesday (20 December) conditionally approved the nationalisation of troubled German gas giant Uniper after it was pushed to the brink of collapse following Russia’s invasion of Ukraine.
The Commission also gave the green light to the nationalisation of the German subsidiary of Russian gas giant Gazprom in order to save the gas supplier from bankruptcy.
Starved of Russian deliveries, Uniper was left facing bankruptcy following a 40-billion-euro ($42.5 billion) net loss for the first nine months of the year, one of the biggest losses in German corporate history.
That prompted the German government to announce it would nationalise the firm over fears its failure could send shockwaves through Europe’s top economy.
Shareholders on Monday backed the deal “by a large majority” in a vote at an extraordinary general meeting, Uniper said in a statement.
The Commission said in agreeing to the recapitalisation of Uniper it was recognising the “serious disturbance” caused to the European energy market by the war in Ukraine which had threatened Uniper’s viability.
The aid package “aims at restoring the financial position and liquidity of Uniper in the exceptional situation caused by Russia’s war of aggression against Ukraine and the subsequent disruption of gas deliveries, while maintaining the necessary safeguards to limit competition distortions,” the Commission stated.
“The Commission found that the aid amount does not exceed the minimum needed to ensure the viability of Uniper, and it will not go beyond restoring its capital position compared to before the energy crisis.”
Credible exit strategy
Conditions attached to the deal include Uniper divesting parts of its business, notably the Datteln IV power plant in Germany and the Gonyu power plant in Hungary. It will also have to make parts of its gas storage and pipeline capacity bookings available to competitors.
Furthermore, the Commission said Germany has committed to producing a “credible exit strategy by the end of 2023, with the aim to reducing its shareholding in Uniper to not more than 25% plus one share by end 2028 at the latest.”
Ahead of Monday’s vote, company CEO Klaus-Dieter Maubach said that “by stabilising the company, the federal government recognises the central role that Uniper plays for the security of supply in Germany and Europe”.
The vote was seen as a formality after the majority shareholder, Finnish state-owned energy company Fortum, had agreed to the measures in September.
Earlier Monday, the German government and Uniper, which employs some 7,000 people, had concluded a framework agreement related to the rescue package.
Berlin initially agreed to an eight-billion-euro ($8.5 billion) cash injection for Uniper, but the debt-laden company said last month the government would need to spend an additional 25 billion euros.
Berlin is proposing to finance the rescue out of a 200-billion-euro fund designed to cushion the impact of the energy crisis on households and businesses.
The firm is seeking damages at an international tribunal from Gazprom over what it claims is the Russian energy giant’s failure to deliver contractually agreed gas supplies.
Gazprom says it does not recognise the legitimacy of the claims.
