On Wednesday, Germany confirmed the nationalization of struggling gas importer Uniper at a cost of 8 billion euros ($7.9 billion), as it scrambled to secure power for Europe’s largest economy after Russia cut supplies.

Nationalizing Germany’s largest importer of Russian gas is the Berlin government’s second move in a week to seize control of an energy company as it faces a winter crisis.

Uniper, whose shares were down 18.97 per cent at 3.38 euros at 0710 GMT, spent its cash on alternative supplies after Moscow cut gas supplies to Germany, prompting a 15 billion euro state rescue package in July.

However, it quickly became clear that the bailout was insufficient to cover Uniper’s spiraling losses, and Germany will now inject another 8 billion euros, partly by buying out Finnish utility Fortum’s stake for 1.70 euros per share.

Fortum shares were up around 12 per cent at 13.50 euros.

Germany will own 99 per cent of Uniper after completing a capital increase and the Fortum share purchase, which excludes the Finnish firm’s subscription rights, according to the economy ministry.

“The state will – that’s what we’re showing now – do everything possible to always keep the companies stable on the market,” German economy minister Robert Habeck told reporters.

On Friday, Germany took control of a Russian-owned oil refinery that supplies 90 per cent of the capital’s fuel, putting a Rosneft unit under industry regulator trusteeship and taking over the Schwedt plant.

According to Fortum’s agreement with Uniper, the Finnish utility will be paid back a 4 billion euro parent company loan and released from its 4 billion euro parent guarantee given to Uniper earlier this year.

“We are investing in Uniper with 8 billion in equity and are effectively buying Fortum out. Let me say this once again: Fortum is losing its entire equity investment as a result,” Habeck said.

Finland’s government, which owns 50.76 per cent of Fortum, said it would have to accept the deal.

Fortum announced in March 2020 that it had invested 6.5 billion euros in Uniper, giving it a 69.6 per cent stake. It later increased its stake to 80 per cent, which it held until the dilution in July.

Fortum has been a significant contributor to the Finnish state budget through dividends for many years, and the soaring losses it has incurred through its German subsidiary have put the government under intense public scrutiny.

Fortum lost 9.1 billion euros in the second quarter alone due to Uniper’s losses in gas trading.

(Adapted from abcnews.go.com)

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