EU authorizes rescue of German gas company Uniper

The European Commission, the executive body of the European Union (EU), has approved Germany’s 34.5 billion-euro plan to recapitalize German natural gas trader Uniper, subject to future divestments, executive pay and acquisitions.

The plan complies with EU state aid rules regarding the necessity, appropriateness and magnitude of the intervention, the Commission said in a statement.

“The measure is intended to restore Uniper’s financial situation and liquidity in the exceptional situation caused by the war in Ukraine and the subsequent interruption of gas supplies by Russia, while maintaining the necessary safeguards to limit the distortions of competition,” he said.

The recapitalization implies an immediate capital increase in cash of 8,000 million euros, which will be subscribed at a price of 1.70 euros per share, he added.

It also approved a capital of 26.5 billion euros, which Germany intends to disburse in stages until 2024, with a first tranche of 5.54 billion announced yesterday. The share price is linked to the difference between Uniper’s costs to buy gas at higher market prices and its price under previous long-term contracts with Russian suppliers.

The Commission stated that Germany committed to drawing up an exit strategy by the end of 2023, with the aim of reducing its stake in Uniper to no more than 25% plus one share by the end of 2028 at the latest.