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Germany's Uniper asks for a bailout amid gas crunch

July 8, 2022

As Russia cuts down gas deliveries to Europe, Germany's energy supplier Uniper reported "significant financial burdens" and asked the German government to help stabilize it.

Workers in Uniper uniforms work at a gas facility in Germany
The goverment pledged not to allow Uniper to go bankruptImage: Uniper SE

German gas importer Uniper asked the German government for a bailout on Friday, proposing "stabilization measures" which would involve a €2 billion ($2.03 billion) loan.

The company is also suggesting selling shares to the state and passing the cost of rising energy prices to its buyers.

"We hope to obtain the necessary assistance shortly based on our application," said Uniper's CEO Klaus-Dieter Maubach.

The move is due to "significant financial burdens" as the company struggles to ensure supply due to reduced gas deliveries from Russia.

In response, Economy Minister Robert Habeck said the government will negotiate and decide on concrete measures.

"Politically, one thing is clear: we will not allow a systemically important company to go bankrupt and cause turbulence on the global energy market as a result," Habeck said in a statement.

Uniper's majority stakeholder Fortum, which owns around 78% of the company, is also in contact with the government. The Finnish company proposes restructuring Uniper to create a "security-of-supply company" owned by the German government.

Moscow closing the valve

Uniper is believed to be the biggest foreign buyer of Russian gas. It also plays a key role in Germany's energy network and delivers energy to multiple cities. In recent weeks, Russia's Gazprom cut down its European deliveries via the Nord Stream 1 pipeline by 60%.

Germany triggers phase 2 of emergency gas plan

The latest crunch comes after the Nord Stream 2 pipeline project, set to provide even more Russian gas, was halted due to the war in Ukraine. 

Separately, Ukraine said on Friday that Russian gas flows through pipelines on Ukraine's territory reached a "historic low" in June, and Norway was hit by a strike of gas and oil workers.

German officials have slammed Russia's decision to cut down gas deliveries as a political pressure tool. But Russia has insisted that the reasons for the crunch via Nord Stream 1 were technical.

On Friday, Kremlin spokesman Dmitry Peskov said gas deliveries will ramp up again when a gas turbine is returned from repairs in Canada.

Government expected to take a massive ownership stake

Financial daily Handelsblatt reported that the state could take a stake in Uniper of over 30%.

Earlier this week, Germany's government passed an emergency plan to quickly help struggling energy companies. Uniper was seen as one of the most likely candidates for government aid.

In June, Germany bailed out a former Gazprom subsidiary by approving ten billion euros worth of loans. Gazprom Germania had been placed under state trusteeship after separating from the Russian company in April.

dj/jcg (AFP, dpa, AP, Reuters)