Berlin gives troubled foreign energy company more than 7 billion euros and acquires 30% of its shares

Finnish energy company Fortum said that, together with its German subsidiary Uniper, they have agreed a comprehensive package of measures with the German government to stabilize Uniper’s financial position.

“As part of the package, the German government will acquire a 30% stake in Unibeir by acquiring an additional issue of 157 million ordinary registered shares with a par value of 1.7 euros per share for the amount of 267 million euros,” Fortum said in a statement. press release today, Friday.

In addition, the German government committed to provide the company with additional capital of up to 7.7 billion euros by issuing mandatory convertible instruments as needed to cover possible losses.

German state-owned bank KFW will also expand the company’s credit line from the current €2bn to €9bn, and the government has also signaled its readiness to provide additional support if the company’s operating losses exceed €7bn.

From October 1, 2022, the German government intends to introduce a mechanism by which it will cover 90% of the losses resulting from the increase in gas purchase costs for Uniper.

As a result of the implementation of these measures, the share of Fortum and Uniper, which currently stands at about 80%, will be diluted to 56%.

On July 8, 2022, Uniper requested support from the German government to stabilize its business during the gas crisis, and this coincided with the adoption by the German Bundestag of amendments to the Energy Security Law, providing for the possibility of taking measures to stabilize the balance sheet of the list of critical energy infrastructure companies.

Source: agencies