Associated Press
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NOS News•today, 18:12
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Uniper, Germany’s largest gas importer, has applied for state aid. The company has run into problems because Russia supplies less gas. In order to meet its supply obligations, the company must purchase gas elsewhere at much higher prices. The company’s chief executive said today that German consumers are expected to see significant price increases.
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CEO Klaus-Dieter Maubach emphasized in a press conference how urgently Uniper needs help. The company sees many millions of euros disappear every day, “a situation that is no longer tenable for us”, according to the CEO. The group is in a “particularly precarious situation”. If nothing happens, the company could face a loss of 10 billion euros by the end of the year.
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The energy company struggles with long-term contracts with municipal utilities and customers in the industrial sector. Uniper is suffering heavy losses because of this because more expensive gas has to be purchased. The situation is precarious but the company is not yet on the brink of bankruptcy, Maubach emphasized.
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He wants the federal government to step in as a shareholder and lend the struggling company a helping hand with state aid, as Lufthansa also received during the corona crisis. That support, in the form of buying more shares, must be substantial, according to the Uniper CEO. “We are not talking about 5 or 10 percent”, he said, it is more about “a relevant equity investment”. According to the German Handelsblatt, Uniper hopes that the government will acquire more than 30 percent of the shares.
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Very, very big price wave
The Bundestag and the Bundesrat have previously passed legislative changes to facilitate the provision of federal aid to ailing energy companies such as Uniper. As a result, the federal government can now make a billion-dollar investment in Uniper.
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In addition, a new energy security law in Germany should help energy companies raise more money. How this will happen is still unclear: either the energy companies are allowed to pass on higher costs to their customers, or there will be a pay-as-you-go system in which everyone contributes. Either way, a “very, very big price wave” awaits German consumers, Maubach said. Uniper customers will be informed as early as next week that significant price increases are expected.
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The main shareholder of Uniper is the Finnish Fortum (with about 78 percent of the shares). That company is also in talks with the German government about the problems. Fortum wants a restructuring of Uniper, which could then continue as a federal government-owned utility.
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Uniper is the largest German gas importer and also operates gas and coal-fired power stations and gas storage facilities. The company has approximately 11,500 employees. In 2016 it was spun off from Eon. Promising industries with the grids, energy services and green energy remained with Eon, while Uniper continued the business with fossil energy.
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