The European Commission said on Tuesday it had approved Germany’s 34.5 billion euro ($36.60 billion) plan to recapitalise German natural gas trader Uniper, subject to future state divestment, management pay and acquisitions.
The plan complies with EU State aid rules on the necessity, appropriateness and size of the intervention, the Commission said in a statement.
“The measure aims at restoring the financial position and liquidity of Uniper in the exceptional situation caused by Russia’s war of aggression against Ukraine and the subsequent disruption of gas deliveries, while maintaining the necessary safeguards to limit competition distortions,” it said.
The recapitalisation involves an immediate cash capital increase of 8 billion euros, which will be subscribed at a price of 1.70 euros per share, it added.
It also approved authorised capital of up to 26.5 billion euros, which Germany intends to pay in stages through to 2024. The share price is linked to the difference between Uniper’s costs to purchase gas at higher market prices, and its price under previous long-term contracts with Russian suppliers.
Uniper’s chief executive said last week he had expected Brussels to clear the state aid with conditions.
The Commission said Germany had committed to work out a credible exit strategy by end 2023, aiming to reduce its Uniper shareholding to not more than 25% plus one share by end 2028 at the latest.
Until this exit strategy is completed, Uniper board members’ remuneration will be subject to strict limitations, including a ban on bonus payments.
Until the end of 2026, Uniper may not buy stakes in other companies unless essential to ensure its long-term viability.
To preserve competition, Uniper will have to divest parts of its business, including the Datteln IV power plant in Germany, and the Gonyu power plant in Hungary, and will release parts of its gas storage and pipeline capacity bookings to competitors.
Berlin’s Uniper rescue, which has so far cost more than 50 billion euros and will essentially lead to full nationalisation, won clearance from EU competition regulators on Friday but still requires state aid approval from the EU executive.
Uniper, majority-owned by Finland’s Fortum Oy, is Germany’s largest gas provider and one of Europe’s main gas traders, the Commission said.
It provides electricity or gas to over 420 local municipal utilities in Germany, out of a total of around 900. It is also Europe’s fourth-largest gas storage company, accounting for about 25% of Germany’s total.
(Reuters, December 21, 2022)
