It’s a race against time – and a desperate rebellion against the gas crisis, which is getting worse and worse. It was only in July that the federal government, together with the Finnish parent company Fortum, decided to help the badly hit gas dealer Uniper with a lavish rescue package, to take a 30 percent stake in the Düsseldorf-based company and to make around 7.7 billion euros available place. Then, on a Friday in July, Uniper boss Klaus-Dieter Maubach went before the press and said: “It’s not easy for any company to apply for state aid, and it wasn’t easy for us either.”
Aid from Berlin, the state as a savior in need – a few weeks ago that sounded like a quick relief operation during the Russian war of aggression against Ukraine.
It is now clear that the aid is far from sufficient, and what could happen now should be even more difficult for the CEO: In a mandatory notification on Wednesday afternoon, the Düsseldorf-based company announced how things should continue. Among other things, a direct capital increase is being examined together with the federal government, which “would lead to a significant majority stake by the federal government in Uniper”.
end of a business model
What sounds complicated is actually quite simple: Berlin could inject further billions into the gas importer and become the main owner of the group in the course of the campaign – Uniper would therefore be de facto nationalized, possibly even completely. A decision on this had not yet been made, it was also said on Wednesday. “As is known, we are in talks with Uniper. We are now holding these talks and are not speculating,” a spokeswoman for the Federal Ministry of Economics quoted the Reuters news agency as saying.
How did it come to this with Germany’s largest gas trader?
The company’s business model seemed perfect, at least from the point of view of its managers and investors. Obtaining large quantities of cheap gas from Russia and then reselling it to hundreds of public utilities, energy suppliers and large companies in Germany. This went well until the Russian energy company Gazprom initially reduced its gas deliveries through the Nord Stream 1 pipeline to 20 percent. And then at some point nothing at all shot through the line.
However, since Uniper has longer-term contracts with its customers, the gas that no longer came from Russia had to be procured elsewhere in order to fulfill these contracts. Buying gas stocks on the market at short notice is expensive, very expensive in fact. And so the once lucrative gas sale turned into a huge loss-making business. It became increasingly clear to those responsible on the executive floors in North Rhine-Westphalia that Russia was not only in the process of shooting up Ukrainian towns and villages. A business model that was long thought to be pretty clever and unassailable was also shot to pieces. But when gas becomes increasingly scarce, when the price for it keeps reaching new record highs, then a trader like Uniper will eventually run out of breath.
The situation has worsened since July
A rescue operation in the summer has now turned into a “worst-case scenario” – a scenario that had to be expected, but which one hoped would never come to pass. In the words of the Uniper managers, it sounds like this: Since the “signing of the stabilization agreement” last July, “the European energy crisis has worsened further, since no Russian gas volumes are currently being delivered through Nord Stream 1 and both the gas and electricity prices very high and volatile”. Then the crucial sentence: “As a result, Uniper’s financial losses have increased significantly since July due to higher gas procurement costs.” Just a few days ago, Maubach declared that the losses resulting from the lack of gas from Russia could add up to seven billion euros this month.
Threatening bankruptcy, possible majority takeover by the state, further losses in the billions: The gas trader’s shares rushed around 20 percent on Wednesday and meanwhile cost 3.87 euros – less than ever. For customers, employees and shareholders, it is now important that the company remains able to act in this situation. On the one hand. On the other hand, a stockbroker was quoted as saying: “If the state gets involved, there will be very little left for the existing shareholders.” A credit line of EUR 9 billion from the state development bank KfW had already been exhausted by the end of August, so Uniper had to apply for a further EUR 4 billion.
Since the Finnish energy group Fortum currently holds three quarters of the Uniper shares, it is also important that Berlin and Helsinki work together on a solution. Fortum said it is still in talks with the federal government to decide on long-term solutions. The Finns took over the German company, which originally belonged to the energy group Eon, in 2018 and then increased their stake to 76 percent.