German energy giant Uniper asks for bailout amid Ukraine war
Jul 7, 2022, 5:17 PM | Updated: Jul 8, 2022, 9:13 am
File--- File picture shows exterior view of the 'Bierwang' gas storage facility of the 'Uniper' energy company in Unterreit near Munich, Germany, Wednesday, July 6, 2022. (AP Photo/Matthias Schrader, file)
(AP Photo/Matthias Schrader, file)
BERLIN (AP) — German Chancellor Olaf Scholz pledged Friday to help troubled energy giant Uniper after it asked the government for a bailout to cope with surging prices for natural gas due to the war in Ukraine.
In a statement, Uniper said the “stabilization measures” it is seeking were “aimed at ceasing the current accumulation of substantial losses, covering Uniper’s liquidity needs and protecting Uniper’s investment-grade credit rating.”
Scholz assured the company — Germany’s biggest importer of Russian gas — of the government’s support.
“This is a company that is of great important to large parts of the economy and to many consumers,” he said during a visit to a trade fair in Munich. “Everyone can be sure: we will play our part to save Uniper.”
The company said its major shareholder, Finland-based Fortum, was also in talks with the German government to “address the negative impact of the current gas supply restrictions on Uniper.”
“Fortum’s proposal includes a restructuring of Uniper aiming at establishing a security of supply company under the ownership of the German government,” it said.
While the government could take a big stake in Uniper to keep the company afloat or let it pass on higher purchasing costs to consumers, Economy Minister Robert Habeck said Friday that the next steps were still being discussed.
“We won’t let a systemically relevant company become insolvent and cause turbulences on the global energy markets,” he said. “We will act.”
Uniper downgraded its financial outlook for this year last week, pointing to a sharp reduction in gas deliveries by Russia’s Gazprom in recent weeks that has forced it to buy substitute supplies at significantly higher prices.
“Since Uniper cannot yet pass on these additional costs, this results in significant financial burdens,” it said at the time.
Germany activated the second phase of its three-stage emergency plan for gas supplies last month. Triggering the third stage would allow the government to determine which sectors and companies gas suppliers need to prioritize, effectively amounting to state energy rationing.
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