Status: 12/19/2022 4:05 p.m
Uniper shareholders have voted in favor of the federal rescue plan. Nothing stands in the way of the nationalization of the badly hit gas supplier. Only the conditions are still open.
The financially troubled energy group Uniper SE will be nationalized as expected. At an extraordinary general meeting, the shareholders gave their consent to the project. It was already considered certain that the motions submitted would find a majority. “This situation hurts, but there are no other options,” said Uniper CEO Klaus-Dieter Maubach.
The federal government and Uniper had previously concluded a framework agreement to specify the measures agreed on September 21, 2022 to stabilize the company, as Uniper announced in the morning. The rescue operation of Germany’s largest gas supplier is costing the federal government many billions of euros: Among other things, the package provides for a capital increase of eight billion euros and the acquisition of Uniper’s shares from the previous majority shareholder Fortum. Up to 25 billion euros should also come in through the issue of new shares.
Record loss due to stoppage of Russian gas supplies
99.46 percent of the shareholder votes represented voted for the multi-billion dollar capital increase at the virtual meeting. 99.55 percent of the votes present also gave their go for the authorized capital of up to 25 billion euros. More than 82 percent of the capital was represented at the shareholders’ meeting.
Uniper wants to use the money to balance the red numbers in 2022, 2023 and 2024. In the first nine months of this year, the company made a net loss of 40 billion euros because of the first reduced Russian gas deliveries and then stopped completely at the end of August and became a symbol of the gas price crisis. The shortfall is the highest for a German listed company since the Federal Republic came into existence.
The reason: The group has to continue to supply the municipal utilities and industrial companies and to obtain a replacement for the missing imports from Russia on the expensive spot market. However, Uniper cannot pass on the high costs to its approximately 1,000 customers due to long-term contracts. Every day, this results in additional expenditure in the double-digit million range and even more than 200 million euros. Uniper therefore wants to sue for damages from Gazprom before an international arbitral tribunal.
“Choice between plague and cholera”
Uniper boss Maubach had already asked the shareholders in a previously published speech at the weekend to approve the stabilization measures agreed with the federal government. They are essential for the future of the company. According to Maubach, the “extraordinary financial burden” meant that Uniper lost more than half of its share capital.
The shareholders – including the Finnish majority shareholder Fortum – will receive a unit price of EUR 1.70 per share. “Shareholders have the choice between plague and cholera,” emphasized Klaus Nieding, Vice President of the German Association for the Protection of Securities (DSW) in the morning in the Economy Update ARD finance department. In the event of bankruptcy, they would not have seen any of their money back, but now they would at least get a small part.
Even Uniper itself left no doubt as to what the Düsseldorf utility would face without nationalization. “A possible insolvency would lead to a complete loss for the shareholders from the point of view of the board of directors,” said Maubach.
Confederation receives co-determination and control rights
In the future, the federal government will own around 98.5 percent of the shares in Uniper. The Federal Ministry of Finance will be responsible for participation. The Federal Ministry of Economics announced the implementation “probably this week”. Uniper is a “central pillar of the German energy supply”. As a result of the majority takeover, the federal government has significant co-determination and control rights in the company in order to be able to ensure security of supply in Germany.
The common goal is also “to make the energy supply in Germany sustainable and thus to give the company and its employees future prospects,” said Uniper. What exactly this future will look like after entry into the state is still unclear.
In such cases, the capital market always asks itself several questions, said shareholder protector Nieding. “The first question is when and how the state wants to get out again. The second question is whether it will exert its political influence on the company.” In addition to the gas business, Uniper also earns its money as an operator of coal-fired power plants and also has a stake in a nuclear power plant in Sweden.
Conditions still unclear
“These are the energy sources that this government doesn’t actually support at all,” said the DSW expert. The state must now make it clear where the journey is going. The energy company announced today that it is initially holding on to its nuclear power plant holdings in Sweden. Uniper currently has no intentions to sell the nuclear energy business, the hydroelectric power plants in Sweden or parts thereof.
It is also unclear under what conditions the takeover will take place. The EU Commission approved the nationalization of the group for competition reasons on Friday, but did not disclose the details of state aid. Observers assume that Uniper will have to sell parts of its business.