Germany agrees largest bailout in corporate history for Uniper
Germany's government has agreed with Finland's Fortum on a rescue plan for German energy giant Uniper worth €15bn ($15.3bn), marking the largest corporate bailout deal in the country's history, Uniper said on July 22.
Uniper has been hit hard by soaring energy costs in Europe and the loss of Russian gas supply, which has forced it to procure replacement spot volumes at sky-high rates. The deal, which follows weeks of tough negotiations, will see the German government take a 30% stake in Uniper in return for injecting €267mn of capital into the company, reducing Fortum's stake from almost 80% to 56%.
The government will also make available €7.7bn in capital against the issuance of mandatory convertible instruments, and will allow Uniper and other gas importers to pass on 90% of replacement costs for missing Russian gas to their customers beginning in October. German state development bank KfW will meanwhile increase its existing credit line for Uniper from €2bn to €9bn.
"I'm pleased and relieved that today's agreement stabilises Uniper financially as a system-critical energy partner and preserves it as a single entity," Uniper CEO Klaus-Dieter Maubach said in a statement. "This ensures that Uniper can continue to reliably supply its customers, including numerous municipal utilities and industrial companies, with energy."
"Uniper is a company of vital importance for the economic development of our country and for the energy supply of our citizens," German chancellor Olaf Scholz told a press conference. He described the agreed measures as a "substantial contribution to the rescue of the company," which will allow Uniper to "stabilise into the future."
Uniper's share price slumped 35% on July 22 on the news, reaching a weighted average of $7.61/share, while Fortum's stock dropped 8.5% in early trading on the same day, to $2.28/share.
The company will convene an extraordinary general meeting to obtain shareholder approval for the stabilisation measures, but with Fortum already on board, this is set to be a rubber stamp affair. Uniper also said it would be delaying the release of its first-half results, which had been scheduled for August 2, to later in the month.