Uniper calls on the German government for help

Uniper

The German energy group Uniper, in great difficulty after the cuts in gas deliveries to Europe decided by Moscow, announced on Wednesday that it had begun discussions to benefit from a government rescue plan.

“Uniper has initiated discussions with the German government on possible stabilization measures,” the company said in a statement released Wednesday evening. In fact, “business has deteriorated significantly due to (…) the sharp reduction in gas deliveries from Russia,” Klaus-Dieter Maubach, the group’s CEO, justified in a statement sent to AFP on Thursday.

Thus, several options are on the table, such as public “guarantees” on loans, “state equity investments” or direct “credits” from the state-owned bank KfW, the group says. In addition, the group withdrew its profit forecasts for the current year, refusing to “give a new outlook”.

Moreover, after this announcement, the group’s share on the Mdax index of the Frankfurt Stock Exchange collapsed, losing 14.92% to 14.08 euros. Since the beginning of the year, the stock has lost about 66% of its value.

40% of promised volumes

Uniper is the largest importer of gas in Germany and one of the largest in the European market. It is suffering from the recent 60% drop in gas deliveries via Nord Stream to Germany by the Russian group Gazprom, which claims a technical problem.

Uniper currently receives from Gazprom “only 40% of the contractually promised gas volumes”, the company confirmed on Wednesday. In order to “guarantee the security of supply for its customers”, Uniper claims to be “currently procuring substitute (gas) volumes at significantly higher prices” than usual.

However, the group claims that it is “not yet able to pass on these additional costs” and is therefore suffering from “significant financial charges”. Especially since “the duration and scope of the restrictions on Russian gas supplies” has made the company’s financial prospects “uncertain”, requiring state support, Uniper points out.

Berlin launched in April a program of public loans and guarantees of more than 100 billion euros, intended to help companies suffering from the effects of the war in Ukraine. The first company to benefit was Gazprom’s former German subsidiary, Gazprom Germania, which will receive a credit line of 9 to 10 billion euros. This company, threatened with bankruptcy but essential for Germany’s supply, was nationalized by Berlin at the beginning of April and renamed “Securing Energy for Europe”.

At the beginning of June, the country was 35% dependent on Russian gas for its imports, compared to 55% before the war in Ukraine.

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