Germany's Uniper, wrecked by Russian gas cuts, applies for government support

Fentino

German gas giant Uniper (OTC:UNPPY) (OTC:UNPRF), Europe's largest importer of Russian gas, asked the government for a bailout, parent company Fortum (OTCPK:FOJCF) (OTCPK:FOJCY) Friday.

New energy legislation just passed in Germany allows energy companies to obtain liquidity assistance in the form of guarantees, loans or recapitalization by the German government, while also providing powers to allow high additional costs to be passed on to customers.

Fortum (OTCPK:FOJCF) said several alternatives were being discussed but none had been decided.

Uniper (OTC:UNPPY) has been forced to buy big volumes of gas in the more expensive spot market, since Russia cut flows through the Nord Stream pipeline last month to only 40% of contracted gas volumes.

Comments

[ransim7222]

"The cost of replacing Germany's nuclear power generation with renewable energy has been officially estimated by the German Ministry of Economics at about €0.01/kWh (about €55 billion for the next decade), on top of the €13 billion per year already devoted to subsidizing renewables."

[Veritas1010]

@maillot jaune,

I agree unfortunately.

C'est en effet très regrettable pour toutes les personnes concernées.

I was never a big fan of the Fortum Ojy taking over Uniper assets. But prior to this debacle Fortum was doing a reasonable job in the transition and decommissioning process of old coal plants etc.

Just glad I sold well in advance.

Residing in the US I was always concerned with Fortum’s business ties with Russia for example with their wind turbines installations. They had difficulties getting the Russians to pay promptly etc., the usual kleptocracy one deals with in third world or autocratic societies.

But, to have foreseen Finland and Sweden feeling threatened enough to actually want to joint NATO. Never, really.

Winter is going to be very interesting in Europe in Germany, Italy and several locations.
The West accused Putin of not “thinking it through” in hindsight it reminds me of a well seasoned trap on a chessboard, a gambit, a sacrifice and then once taken unseen destruction to other party. Unfortunately the real winner here is China, the juggernaut that bears close watching.

[qwerty11]

Good deal for shareholders - they can keep their shares and the Government provides deep capital pool

[maillot jaune]

Only the beginning.