The German government will acquire a stake of about 30% in Uniper SE as part of a €15 billion package of measures to stabilize the country's largest gas importer amid high prices and supply shortages from Russia.

The state will pay €267 million for the shareholding while making a further €7.7 billion available via the issuance of mandatory convertible instruments. Meanwhile, KfW, Germany's state-owned development bank, will increase its existing €2 billion credit line for Uniper to €9 billion.

"During the past few weeks, Uniper's liquidity situation has drastically deteriorated," CEO Klaus-Dieter Maubach told reporters July 22. "The German government has acted quickly and decisively to protect national interests. ... This cannot be taken for granted."

Uniper, majority-owned by Finland's Fortum Oyj, has been hit hard by Europe's energy crisis and moves by Russia to curtail gas supplies. The company has only been receiving about half of its contracted volumes from Russian state-owned PJSC Gazprom via the Nord Stream 1 pipeline, forcing it to buy fuel at higher prices on the spot market.

Nord Stream 1 recently went offline for 10 days due to scheduled maintenance but resumed operations July 21, albeit at reduced capacity. Uniper had to take gas out of its storage reserves when the pipeline was not operating, Maubach said.

Uniper is racking up daily losses in the two-digit million euro range as a result of the gas supply challenges, the CEO said, which could amount to about €4.5 billion by the end of August. Maubach previously said the company's total losses in 2022 could reach €10 billion.

Uniper has shouldered the full burden of the higher gas procurement costs alone, with its customers continuing to receive supplies at the agreed volume and price. However, the government's bailout package includes a commitment to allow all German gas importers to pass on 90% of the replacement costs for missing Russian gas from Oct. 1.

Uniper said that if replacement cost losses exceed €7 billion, and cannot be offset by the company's operating profits, the government "stands ready for further support."

As a result of the government's investment in Uniper, Fortum's approximately 80% stake will be diluted to 56%. Fortum already provided Uniper with €4 billion in shareholder loans and €4 billion of parent company guarantees and will now have the option to convert its existing loan against a portion of the government's mandatory convertible instruments.

"New geopolitical realities have shaken the European energy system to the core, and this determines a new framework for European energy companies," Fortum CEO Markus Rauramo said in a news release. "Whilst we have now achieved immediate stabilization of Uniper, further efforts will be required to create a long-term sustainable basis for the gas business."

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