Agreement struck on Uniper bailout: press
An outline deal for a financial bailout for Finnish-German energy group Uniper has been agreed in principle by its Finnish majority shareholder Fortum and the governments of both Finland and Germany, Reuters reported July 22, citing unnamed sources familiar with the matter.
Uniper will become part-owned by the German government in exchange for additional funding from Berlin, though further details are still to emerge. Fortum's contribution had been the main sticking point in talks. The Finnish company said it had already provided €8bn ($8.1bn) in loans and financial guarantees.
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First quarter losses of €3.2bn ($3.3bn) this year had piled up the financial pressure on Uniper, while net debt surged to €2bn from €324mn in the period. Uniper's predicament was partially driven by the writedown of €1bn in loans to Gazprom's aborted Nord Stream 2 pipeline from Russia to Germany.
Lately, Germany has seen gas imports from Russia evaporate due to reduced Nord Stream 1 gas deliveries. Nord Stream 1 is currently running at around 40% of its overall gas transmission capacity, following a 10-day planned turnaround from July 11 to 21 that saw deliveries cease altogether.
Berlin is pushing energy firms to double down on filling gas storages as Europe's winter demand season draws nearer. Exceeding the EU's mandatory 80% capacity requirement, which will come into force November 1, the German economy and climate minister Robert Habeck said on July 21 that German gas storages would be at 95% capacity by that date, and would reach 85% by the start of October.
Soaring gas prices mean utilities will bear substantial costs in the storage refilling effort, and the problems at Nord Stream 1 forced Uniper to begin emptying its emergency gas reserve. Uniper's global energy trading operation serves 400 TWh of energy annually and the company has roughly 33,000 MW of capacity at power generation plants across Europe and Russia. In energy terms, it is widely seen as too big too fail and its financial predicament has sparked fears that parts of the European energy system may be on the brink of collapse.