By Giulia Petroni

Uniper SE's shares plunged on Wednesday after the German government agreed to nationalize the troubled gas importer to secure energy supply in the country.

At 0733 GMT, shares trade 19% lower at EUR3.38.

The rescue deal includes a capital increase of 8 billion euros ($8 billion) and the acquisition of parent company Fortum Oyj's shares in the utility by the state. Upon completion, Germany will own approximately 98.5% of Uniper.

In July, the government pledged to take a 30% stake in the utility and extended credit lines as part of a bailout package, but since then Uniper's financial situation has worsened due to higher gas procurement costs and Russia halting gas flows via the Nord Stream pipeline.

"The European energy crisis has escalated further and the severity of the situation has made it apparent that the previously agreed stabilisation measures are insufficient and difficult to implement," Fortum said.

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

(END) Dow Jones Newswires

September 21, 2022 04:04 ET (08:04 GMT)

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