Germany poised to agree on bailout terms for Uniper ‘soon’

Germany is ready to make a decision on a bailout for Uniper SE “soon” but ongoing talks with the company are “difficult.”

Uniper — which is heavily dependent on Russian gas — asked the German government for a bailout on Friday, the first major corporate casualty of Moscow’s squeeze on European energy flows. The government is prepared to help the company no matter what, said a spokeswoman for government. 

Germany and Uniper have been locked in talks for weeks over a potential rescue package. The company may need about 9 billion euros ($9.1 billion), more than twice its market value, as it bleeds cash trying to replace Russian gas supply with higher-priced alternatives. 

Last week the company appeared to be cranking up the pressure on the government warning that it would soon have no choice but to pull gas from storage, raise prices to customers, and even reduce supply. Economy Minister Robert Habeck has warned of the possibility of Lehman Brothers-like contagion as the spiraling cost of gas tips suppliers over the brink, taking the wider economy with it. 

Flows of Russian gas on the Nord Stream pipeline are due to halt today while maintenance is carried out. A turbine that was caught up in sanctions is set to be released from Canada soon, a move the German government is hoping move could restore gas flows to Europe.   

“It is clear that Russia has justified the shutdown of gas flow through Nord Stream 1 by the fact that this turbine did not come back repaired from Canada,” a spokeswoman for the economy ministry said. “We have eliminated this reason by agreeing with Canada to deliver this turbine.”

Siemens Energy said in a statement Monday that it aims to “transport the turbine to its place of operation as quickly as possible.” The Canadian government’s decision was a necessary first step for the delivery of the turbine, Siemens said. 

Now, the company is working on formal approvals such as export and import control procedures and logistics. Siemens Energy did not provide any estimate for the time time needed to complete these tasks.

© 2022 Bloomberg L.P.

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.