Dhe energy company Uniper is in a bind: it has to pay more and more for the scarce gas from Russia, but cannot pass the higher prices on to its customers in full. Therefore, the state is now taking a 30 percent stake in the company in order to save it from collapse and to continue to ensure the energy supply for citizens and companies. It also allows Uniper and other energy companies to charge customers 90 percent of the costs for additional purchases.
The extent of the crisis can also be seen from the fact that the share is significantly higher than the state share that the federal government took over in Commerzbank during the financial crisis. At that time, the taxpayer provided a rescue package in the form of silent contributions, among other things, and also subscribed to around 25 percent of the shares in what was once Germany’s second-largest bank. The Commerzbank rescue package was worth a total of more than 18 billion euros. The Reuters news agency estimates the Uniper rescue package at 15 billion euros.
Scholz does not want to leave citizens alone
At a press conference held at short notice in Berlin on Friday, Chancellor Olaf Scholz (SPD) described Uniper as a company of paramount importance that is now being stabilized. He announced that consumers would face higher energy prices as part of the Uniper rescue. Corresponding allocations would come from September 1st or October 1st. There was talk of 200 to 300 euros higher costs per family.
Scholz also promised relief for energy customers. The chancellor held out the prospect of a major reform of the housing allowance and promised the citizens that they would not be left alone. “You will never walk alone,” Scholz quoted the internationally popular anthem of a well-known traditional English football club.
Uniper supplies numerous companies and more than 100 municipal utilities in Germany. The utility belongs to the Finnish energy group Fortum, which was previously the largest shareholder. Uniper shares were suspended from trading on the Helsinki Stock Exchange on Friday.
The rescue package in detail
As Uniper itself announced, the stabilization package provides for a capital increase of around EUR 267 million at an issue price of EUR 1.70 per share, excluding shareholders’ subscription rights. At the time of the press conference, Uniper’s share price was around 10 euros. The capital increase will result in the federal government taking a stake of around 30 percent in Uniper.
Furthermore, a so-called mandatory conversion instrument of up to 7.7 billion euros should be issued to the federal government, it said. Because the federal government received the shares so cheaply, the Uniper share price then fell by around 24 percent at times.
The convertible securities are interest-bearing securities, which must be converted into shares by the end of the term at the latest. They are therefore considered by rating agencies to be similar to equity. The loan granted to Uniper through the state bank KfW is to be increased from 2 billion to 9 billion euros.
The federal government explained to Uniper during the negotiations that from October 1, 2022, a general mechanism for passing on 90 percent of the replacement procurement costs for all importers as a result of Russian gas cuts should be introduced. Uniper only has commercial customers, including municipal utilities. However, you could pass on the higher costs in a next step.