Sunday, August 7

Uniper may pass on some costs to consumers under rescue deal -sources


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FRANKFURT — Uniper could be allowed to pass on some of its higher gas costs to consumers under the terms of a rescue package being discussed with the German government, sources told Reuters on Wednesday.

Germany is scrambling to rescue the utility, which has become a high-profile casualty of an economic standoff between the West and Russia that has sent gas prices soaring and raised fears of severe energy shortages this winter.

It was not immediately clear by how much Uniper might be allowed to pass on costs under the rescue deal, or what measures the German government could take to shield vulnerable households from a steep price increase.

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Uniper shares were up more than 6% at the top of Germany’s midcap index.

Details of the bailout are still being discussed and could be addressed at a meeting with German Chancellor Olaf Scholz on Friday, people familiar with the negotiations said.

No final deal has been agreed and details of a package could still change, sources said.

A rescue package for Uniper must be agreed by July 25, when the German utility could face more serious funding issues as a result of reduced gas supplies from Russia, two people familiar with the matter told Reuters on Tuesday.

Uniper, Germany’s largest importer of Russian gas, is losing cash on a daily basis as it is forced to buy supplies at much higher prices from alternative sources because Gazprom has reduced deliveries.

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Berlin is leaning towards taking an equity stake of 15% to 30% in Uniper as the preferred option for a bail out of the stricken group, the sources told Reuters, adding this package would be worth a mid single-digit billion euro amount.

There are also plans to raise Uniper’s credit line facility from Germany’s state-owned KfW bank to 8 billion euros ($8.2 billion) from 2 billion, German daily Handelsblatt reported, citing an economy ministry document.

Germany triggered the “alarm stage” of its emergency gas plan last month but at the time had stopped short of allowing utilities to pass on soaring energy costs.

Governments across Europe are closely watching whether Russian gas flows through the Nord Stream 1 pipeline will restart on time on Thursday after a scheduled maintenance period.

(Reporting by Christoph Steitz and Andreas Rinke; writing by Kirsti Knolle and Matthias Williams; Editing by Michael Shields and David Evans)

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