German giant Uniper power seeks government funding due to energy hikes

Berlin, Germany: German Chancellor Olaf Scholz has pledged assistance to Uniper, the German energy giant, which has asked the government for a financial bailout to counter surging prices for natural gas caused by Russia’s invasion of Ukraine.

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,” Uniper said in a statement.

“This is a company that is of great importance to large parts of the economy and to many consumers. Everyone can be sure we will play our part to save Uniper,” Scholz said this weekend.

The company added that 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.”

Meanwhile, Economy Minister Robert Habeck said the next steps were still being discussed, but the German government could take a big stake in the company to keep it afloat or let it pass on higher purchasing costs to consumers.

“We will not let a systemically relevant company become insolvent and cause turbulences on the global energy markets. We will act,” he said.

Citing a major reduction in recent gas deliveries by Russia’s Gazprom, which forced the German company to buy substitute supplies at significantly higher prices, this week, company officials downgraded its financial outlook for 2022.

“Since Uniper cannot yet pass on these additional costs, this results in significant financial burdens,” the company stated.

Last month, Germany activated the second phase of its three-stage emergency plan for gas supplies, while the third stage would enable the government to ration energy by allowing it to determine which sectors and companies gas suppliers need to prioritize.

Disclaimer: This report is automatically generated from worldwide news services. NTN is not responsible for its content and does not moderate it.

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