Scholz commented that the Uniper arrangement stabilizes the situation – Tuppurainen is also satisfied with the agreement

The energy company Fortum and the German government have reached an agreement on the arrangements concerning the German energy giant Uniper.

Germany will capitalize Uniper with 7.7 billion euros as a result of the arrangement. The German state will also acquire a 30 percent stake in Uniper by subscribing new shares at a price of EUR 1.70 per share, Fortum said. in the bulletin (you will switch to another service).

With the arrangement, the German state will become a minority owner of Uniper, and Fortum’s ownership will decrease to 56% from the previous 78%. The Finnish government is the majority owner of Fortum.

Before midday, the Helsinki Stock Exchange announced that trading in Fortum’s shares has been suspended. Fortum’s share price had increased by around eight percent during the early days. Trading opened in the afternoon, and the share price started to drop sharply.

Federal Chancellor Scholz commented on the Uniper arrangement on Friday afternoon at a press conference discussing Germany’s energy policy.

According to Scholz, several options were on the table and negotiations with various parties about the future of Uniper lasted for weeks.

Fortum is known to have proposed splitting Uniper’s business operations into parts, but in the end the proposal pushed by Germany for the federal government to become a minority shareholder won. However, Scholz said that the federal government does not necessarily need to keep a 30% stake in the company permanently.

It was urgent to get clarity on Uniper’s future, because due to the company’s financial problems, the credit rating agency S&P has considered lowering Uniper’s rating.

According to Scholz, the Uniper arrangement now agreed between Germany and Fortum stabilizes the situation and ensures the company’s financing in the future as well.

The Chancellor emphasized that Uniper as a company is an individual case, and does not serve as an example for other companies. However, Scholz said the state would support any business that has suffered due to the sudden increase in energy prices. Uniper has generally been considered too big to fail, as it is responsible for managing energy for German households and businesses.

Scholz assured that German citizens will not be left alone with their drastically increased gas bills.

He admitted that the state has not been able to prevent energy prices from rising, but the state can still support citizens.

– You’ll never walk alone, Scholz swore to believe with his English quote.

Scholz said Germany is capable of solving the energy problems it faces. According to him, the state assists citizens as long as it is needed.

– The rising price of energy affects everyone. Because of this, the state is now evaluating various assistance measures.

Germany is preparing a reform related to housing subsidies from the beginning of 2023 due to, among other things, the increase in household heating costs

Scholz promised that due to increased heating costs, the state plans to reform the housing allowance from the beginning of 2023. He also hinted that the state is considering legal protection for people who have trouble paying their energy bills before the due date.

Scholz said in his speech that Uniper is allowed to pass on the increased costs to consumer prices.

– 90 percent of increased gas prices can be transferred to customers’ prices.

The company Uniper, headquartered in Düsseldorf, Germany, was founded in 2016, when the German energy giant E.ON SE was split into parts. From the beginning, Uniper’s business model has been dependent on gas purchased from the Russian gas and oil company Gazprom.

Uniper has had long-term agreements on the price of energy with consumers, so the company has found itself in a difficult situation when Russia has reduced gas supplies to Europe and the price of energy has become more expensive. Uniper has been losing tens of millions of euros per day lately.

Scholz said in his speech that there are three operational gas pipelines from Russia to Germany and that it is “unique” that Russia has not kept its decades-long commitment to gas transport.

The Chancellor said that Germany would react to the situation by trying to reduce the use of gas and by importing more liquefied natural gas into the country. Scholz promised that liquefied gas imports will increase significantly from the beginning of 2023.

Minister for Europe and Ownership, deputizing for the Prime Minister Titti Tuppurainen (sd.) considers it important that Fortum and its subsidiary Uniper and the German government have reached an agreement on measures to stabilize Uniper’s situation and secure people’s access to energy in Europe.

According to Tuppurainen, the primary goal of the state owner when evaluating solutions to the Uniper crisis has been to help find a solution where the state’s shareholder value in Fortum is preserved and developed best.

– According to our assessment, the final result achieved now, which has been approved by Fortum’s board of directors after careful consideration and analysis, is the best possible compromise under these circumstances and schedule.

– The view of the Finnish government, as Fortum’s largest owner, was that no additional financing from Fortum or the Finnish government should be granted as part of the solution, and that the 4 billion euro shareholder loan granted by Fortum and the 4 billion euro parent company guarantees given on behalf of Uniper would remain in effect. These goals were achieved in the negotiations, Tuppurainen states.

Tuppurainen says that he had a close discussion with his German ministerial colleagues about the situation.

– I consider it important that the end result is acceptable to all parties. In Finland, the government’s economic policy ministerial committee has supported the solution reached now, Tuppurainen says.

You can discuss the topic until 11:32 on 23 July 2022.