Scholz interrupts vacation
Uniper rescue plan is available
07/22/2022 11:06 am
Two weeks ago, the energy company Uniper applied for state aid – the company got into financial difficulties due to the energy crisis. A rescue package should now be available. The federal government is to take over 30 percent of the company shares, and the state credit line is to be quadrupled.
According to a “Handelsblatt” report, the main features of the state rescue package for the energy company Uniper are practically certain. According to the newspaper, the federal government is to take over 30 percent of the company’s shares, so the agreement could be presented to the public today. The report relies on information from unspecified government and financial circles. According to the German Press Agency, Chancellor Olaf Scholz is interrupting his vacation to present the rescue package for Uniper.
In addition to the entry of the federal government, so-called hybrid capital of seven to eight billion euros is to be made available. The details of this will only be negotiated in the coming weeks. The “Handelsblatt” reported that the possibility of the federal government subscribing to the corresponding volume of mandatory convertible bonds is under discussion. These are fixed-income securities that are automatically converted into shares in the company at the end of their term.
According to the newspaper, an at least temporary increase in the credit line agreed between Uniper and the state credit bank KfW from two to eight billion euros is also planned. However, some of these loans are to be reduced immediately as soon as the hybrid capital is available.
Uniper got into financial difficulties
There had already been media reports in the past few days about a possible entry by the federal government with 30 percent, which the government had not commented on. Uniper is an international energy group that sells electricity and gas to wholesale customers such as municipal utilities. It is heavily involved in gas trading with Russia and was in financial difficulties as a result of the current gas crisis. Uniper therefore applied for state aid two weeks ago.
Since then, negotiations have been ongoing between Uniper, the federal government and the Finnish Uniper parent company Fortum. According to earlier media reports, a spin-off and nationalization of Uniper’s German business was also under discussion as an alternative to an equity investment by the federal government.
Uniper itself only announced on Monday that it had fully utilized its general credit line of two billion euros agreed with KfW due to the current business situation. At the same time, the Düsseldorf-based company announced that it had applied for an increase in the line in parallel with the ongoing talks about entering the state.
The company also intends to continue reducing the level in its gas storage facilities until its financial situation has stabilized. “Uniper is currently withdrawing certain amounts of natural gas from its storage facilities in order to meet its obligations to its customers,” said a group spokesman for the Düsseldorf “Rheinische Post”. “As soon as our liquidity situation stabilizes again, we would end the withdrawals.”