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21 Sep, 2022 07:00

Berlin to nationalize gas giant – Reuters

Uniper has been asking for a state bailout as it incurs daily losses of €100 million
Berlin to nationalize gas giant – Reuters

The German government is closing in on a provisional agreement with Uniper and Fortum, its Finnish parent company, to nationalize the utility which is bleeding cash due to the energy crisis that has been raging across the EU over the last few months, Reuters reported on Tuesday, citing people familiar with the talks.

Berlin is expected to announce the consummation of the deal later this week, although contracts have not yet been signed, Bloomberg reported.

Earlier this month, Uniper, Germany’s largest gas importer, asked for extra government aid, as losses stemming from the company's attempts to substitute missing volumes of Russian gas have been mounting day by day.

The company has been forced to buy gas on the spot market at much higher prices to make up for the shortfall in Russian supplies.

Last week, Uniper said that the government could take a controlling stake in the company as it seeks further state support, paving the way for what could result in a full nationalization of the firm.

The takeover deal is valued at more than €30 billion ($30 billion). Berlin is expected to purchase Fortum’s controlling stake, and then inject billions of euros into the company through a capital increase.

Earlier this month, Handelsblatt reported that the German authorities were planning to allocate €67 billion ($67 billion) to provide financial aid to domestic energy corporations suffering from supply shortages stemming from the sharp decrease in gas imports from Russia.

For more stories on economy & finance visit RT's business section

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