By Giulia Petroni

 

Uniper SE trades lower on Friday after details of a bailout deal with the German government were disclosed, erasing earlier gains in the day.

At 1126GMT, shares are down 23% at EUR8.09.

Germany agreed to acquire an approximately 30% stake in the utility via a capital increase of about 267 million euros ($272.4 million), rescuing the struggling utility severely hit by curtailed Russian gas supplies and high prices. Following the capital increase, shareholder Fortum Oyj will hold a 56% stake in the company, down from about 80% previously.

Uniper will also have access to additional financing from state-owned bank KfW, which will increase the existing credit line to EUR9 billion. The company has already drawn out a EUR2-billion credit line from KfW and got EUR8 billion in financing from Fortum earlier this year.

To limit continuing financial losses from supply cuts and price spikes, the government also plans to let gas importers pass through 90% of the costs to replace Russian gas onto customers as of Oct. 1.

The standoff between Europe and Russia has caused energy prices to spike and raised fears of insufficient storage levels ahead of winter as supply remains reduced. The Nord Stream pipeline linking Russia's Siberian gas fields with Germany though the Baltic Sea restarted on Thursday after a 10-day maintenance period, but flows are still at about 40% of capacity.

Uniper, Germany's biggest buyer of Russian gas, has only received 40% of contracted volumes from Russia's state-owned exporter Gazprom PJSC since mid June and has had to cover shortfalls at significantly higher prices on the spot market.

The company will now convene an extraordinary general meeting to get shareholder approval for the stabilization measures.

 

Write to Giulia Petroni at giulia.petroni@wsj.com

 

(END) Dow Jones Newswires

July 22, 2022 07:49 ET (11:49 GMT)

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