By Dominic Chopping

 

Finnish energy group Fortum Oyj said Friday that its Uniper SE subsidiary has filed for government support under newly adopted German energy legislation.

Uniper is Germany's biggest importer of gas and has been hit hardest by the Russian gas curtailment, resulting in extreme financial pressure, Fortum said.

Since mid-June, Uniper has received only 40% of the contracted gas volumes from Russia and has had to source the replacement volumes in the market at significantly higher prices.

New energy legislation adopted in Germany on Friday allows energy-sector firms to obtain liquidity assistance in the form of guarantees, loans or recapitalisation by the German state, while also providing powers to allow high additional costs to be passed on to customers.

Fortum said it has already supported Uniper with an 8 billion-euro ($8.13 billion) credit facility, which is almost fully drawn by Uniper.

"Fortum is in constructive talks with the German government on how to stabilise Uniper both regarding its business risks and financial position," it said.

One such proposal involves a reorganisation of Uniper's business portfolio to ringfence the system-critical German businesses under the ownership of the German government, but no decisions have yet been made, it added.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

July 08, 2022 08:31 ET (12:31 GMT)

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