German govt may invest up to $9.4 bn to bail out Uniper
08 Jul 2022
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Germany is preparing for the possibility of taking a stake in Uniper, in order to rescue the country's largest buyer of Russian gas from certain death. Uniper has been done down by the German government’s own denial of gas imports from Russia.
The ban on Russian energy besides driving up energy prices has had a knocking effect on the country’s utilities, forcing Berlin to take stakes in energy firms which run into financial trouble.
Chancellor Olaf Scholz's government has agreed legislation allowing Berlin to take stakes in energy firms which run into financial trouble.
Berlin fears that utilities could collapse due to soaring energy prices have now come true. Last week Uniper became the first German energy company to raise the alarm over scarce gas and soaring prices.
A report in the Handelsblatt newspaper said Berlin is in talks about infusing fresh capital into Uniper by subscribing to a package of new shares of up to 25 per cent in the energy utility.
Reports citing sources familiar with the situation said the talks are centred over a potential bailout package of around 9 billion euros ($9.4 billion).
The government may acquire Uniper shares at a nominal value of 1.70 euros apiece and remain a silent partner, without voting rights.
The volume of the deal could be between 3 billion and 5 billion euros, Handelsblatt added.
The government is looking at various options, including loans, taking an equity stake and also passing part of the surge in costs onto consumers, according to reports.
Uniper, which is a major investor in Russian gas pipeline Nord Stream 2, said it would record a full impairment loss on the Nord Stream 2 financial claim,
Uniper will recognise an impairment loss of its loans towards Nord Stream 2 AG in the amount of €987 million. The book value results from the loans originally provided to Nord Stream 2 (€695 million) plus the current amount of accrued interests (€292 million). This non-operating impairment loss will impact the consolidated IFRS-result in the first quarter of the current financial year, but will not affect the adjusted earnings figures. Going forward, Uniper will stop accruing the related interest income of around €100 million per year.
It would also resume divestment process for its Russian subsidiary Unipro as and when possible.
Uniper is the majority owner of the Russian company PAO Unipro with 83.73 per cent stake. The company is listed on the Moscow Stock Exchange and operates independently within the framework of Russian legislation.
At the end of last year, Uniper started a divestment process of Unipro. Due to the current situation, this process has been halted for the time being and will be restarted as soon as it is feasible.
However, Uniper will not make any new investments in Russia and will not transfer any funds to Unipro until further notice.
