(Bloomberg) — The German government is closing in on an agreement to nationalize gas giant Uniper SE, as Berlin moves to stave off a collapse of the country’s energy sector.
A provisional agreement between the government, Uniper and its main shareholder, Finland’s Fortum Oyi, has been reached, according to people familiar with the situation. While contracts haven’t been signed, Berlin is aiming for an announcement later this week.
The government is considering buying Fortum’s controlling stake at a relatively low price and would then inject billions of euros into the company through a capital increase, Bloomberg News reported last week. A Fortum spokeswoman declined to comment while negotiations are ongoing. There was no immediate comment from the Finnish or German governments.
Surging gas prices and Moscow’s move to squeeze supplies to Europe have already prompted a series of government bailouts and rescue loans. But those measures are increasingly dwarfed by the scale of the crisis and there’s a risk that systemic energy providers collapse without more robust government support.
With Russia’s main pipeline to Germany cut off, Uniper is having to source alternative supplies and it’s racking up losses of as much as 100 million euros ($100 million) a day, according to its CEO.
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The German government is also in talks about taking over at least two other companies, in what could be a coordinated swoop.
Talks over Uniper are particularly fraught as they also involve the Finnish government, which is the majority owner of Fortum, which in turn is Uniper’s largest shareholder. Fortum has already extended credit facilities, which were quickly used up, and the Finnish government made clear earlier this year it didn’t want to end up on the hook.
Finland’s government is coming under heavy pressure over its handling of the rescue from opposition parties. It now faces two motions of no-confidence filed on Tuesday, with lawmakers berating the cabinet for failed negotiations with Germany and a waste of taxpayer money.