Berlin announced Monday, November 14, the nationalization of the German subsidiary of the Russian energy giant Gazprom. Objective: to save this gas supplier from bankruptcy, over-indebted and already administered by the German state. This is to guarantee the security of gas supply in Germany, explains the Ministry of the Economy in a press release. Thus, Berlin nationalizes for the second time in a few months a leading energy group, after having already saved the German Uniper, asphyxiated by Russian gas cuts.
Sefe, which previously operated as Gazprom Germania, counts municipal utilities among its customers and has a market share in Germany of around 20%. The group also owns numerous gas transport and storage infrastructures, including the largest reservoir in Europe located in Rehden (North-West). The German state had already taken control of the company in early April, against a backdrop of exacerbation of energy tensions between Russia and Western countries since the invasion of Ukraine.
Sole shareholder of Gazprom Germania, Gazprom announced on 1er April that he had withdrawn his assets from his subsidiary. Berlin had wanted to prevent the company from falling into hostile hands, or even being liquidated, and had entrusted its management to the Federal Network Agency (Bundesnetzagentur) for six months, renaming it Sefe. An accounting statement dating from the end of August specifies that Sefe has 1 billion euros in equity for 3 billion in debt, meaning that it is in a situation of over-indebtedness. “Business partners and banks have suspended business relationships with the company or are reluctant to enter into new ones”reported the Ministry of Economy.
“Avoid paralysis”
To clean up the financial situation and clarify the ownership link, Berlin will carry out an accounting manoeuvre: the capital including reserves will initially be reduced to zero, with the consequence that the former Russian shareholder will lose control, subject to compensation to be determined. Germany will then inject 225 million euros into the company, thus becoming the “new sole shareholder”.
Berlin also plans to increase to 13.8 billion euros a loan from the public bank KfW to the company, in order to increase its equity by swapping debt for shares. These measures will be financed by the support plan of 200 billion euros decided at the beginning of October by Berlin to protect its economy in the face of the energy crisis and which has been criticized by several European countries.
Poland, for its part, placed under guardianship, on Monday, Gazprom’s stake in the company EuRoPol Gaz which manages the Polish section of the Yamal gas pipeline, announced the Polish Ministry of Development. Gazprom controlled 48% of this company, against 52% for the Polish state.
This measure, taken at the request of the National Security Agency (ABW, counterintelligence), is ” necessary (…) in particular to avoid a decision-making paralysis of this company and to ensure the security of the critical infrastructures intended for the transport of gas”Development Minister Waldemar Buda said in a statement.
The Yamal-Europe gas pipeline, opened in 1994, connects the city of Torjok, in central Russia, via Poland to Germany, over more than 2,000 kilometres. Before the Russian aggression against Ukraine in February, it was one of the main vectors of the supply of Russian gas to Europe. At the end of April, Gazprom completely suspended gas deliveries to Poland under the Yamal contract.