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Shareholders of gas group Uniper approve German bailout

Published 12/18/2022, 12:33 PM
Updated 12/19/2022, 12:01 PM
© Reuters. FILE PHOTO: Klaus-Dieter Maubach, CEO of German utility Uniper, addresses the media after Germany has agreed to nationalize Uniper by buying Fortum's stake in the gas importer to secure operations and keep its business going, in Duesseldorf, Germany, Sept

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) -Shareholders in Uniper on Monday approved a state bailout that has so far cost the German government more than 50 billion euros ($53 billion), paving the way for a de facto nationalisation of the struggling gas giant.

Uniper Chief Executive Officer Klaus-Dieter Maubach earlier on Monday told a virtual extraordinary meeting that the disarray caused by the loss of gas supplies from Russia could leave shareholders with nothing if they did not accept the German proposal.

Russia's Gazprom (MCX:GAZP) was once Uniper's biggest supplier of gas, but a big drop in deliveries after Moscow's invasion of Ukraine forced the German gas importer to buy gas elsewhere at much higher prices to honour its contracts.

That, Maubach said, was the sole reason for the bailout.

Uniper's investors voted in favour of the two main measures at Monday's meeting, an 8 billion euro capital injection by the German state and allowing a further injection of up to 25 billion euros by Berlin.

"(The measures) are indispensable for this company's future," Maubach said. "If approval is not granted, we would have to review very critically the so-called going concern forecast for our company," he added.

"In the Management Board's view, a possible insolvency could lead to a complete loss for shareholders."

German Economy Minister Robert Habeck told reporters he expected a response from the European Commission on the state aid before Christmas.

Still, Habeck said he expected the German state will hold stakes in Uniper for longer than the two odd years it held shares in Lufthansa, in which it bought a 20% stake in mid-2020 to keep the company afloat amid the coronavirus pandemic.

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"It will certainly take longer than, for example, it did with Lufthansa for the company to become attractive enough to be sold," Habeck said.

Maubach said Uniper currently had access to around 2.5 billion euros of funds.

As part of the bailout, the German government will end up owning just below 99% of Uniper, Germany's largest gas trader, following two share issues. Germany's Finance Ministry will be responsible for the stake, Uniper said on Monday.

Current majority shareholder, Finland's Fortum, will exit as a result, although it will retain the right to make an initial offer for Uniper's Swedish nuclear and hydro assets by the end of 2026, should the company decide to sell those.

Uniper said it currently has no plans to do so.

The loss of Russian gas, Moscow's retaliation for Western sanctions over its invasion of Ukraine, triggered a 40 billion euro net loss for the importer, which provides around a third of Germany's gas, the largest loss in German corporate history.

($1 = 0.9450 euros)

Latest comments

Corporate welfare at taxpayer expense is apparently not unique to the United States of America.
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