Germany may nationalize the energy concern Uniper

On July 5, the German government urgently approved a bill on the nationalization of energy companies and the transfer of costs. On Friday, July 9, the approval of the document by the Bundestag is planned. Uniper, the owner of power plants in Russia and once the largest partner of Gazprom in Europe, may fall under the influence of the new bill.

As the German Handelsblatt reported on July 5 with reference to sources, the German government may receive a share of up to 25% in Uniper upon partial nationalization.

Uniper (78% of the shares in the Finnish energy company Fortum), according to Bloomberg, has entered into negotiations with the German federal government about a rescue package worth 9 billion euros. Berlin, the agency writes, is in a hurry to take measures before July 11, when “Gazprom” stops “Nord Stream” for maintenance, out of fear that the gas pipeline may not resume its work after that.

On June 30, it became known that Uniper is negotiating a possible state aid due to financial problems related to a 40% reduction in Russian gas supplies from June 4 and a drop in the company’s shares. Since June 16, Gazprom has reduced the daily pumping of Nord Stream to 67 million cubic meters. m, and Uniper gas supplies fell by 25%. The reason for the decrease in exports was the non-return of the Siemens turbine from repairs in Canada and the stoppage for preventive maintenance of one of the gas turbine engines of the “Portovaya” compressor station, which injects gas into the “Nord Stream” pipe.

Uniper shares fell by 7% on July 5, and by 28% the day before. On Wednesday, July 6, the fall slowed down and was limited to -2.67% during trading on the Frankfurt Stock Exchange as of 18:33 Moscow time.

Uniper was one of the five European co-investors of Gazprom’s Nord Stream 2 gas pipeline, along with Anglo-Dutch Shell, German Wintershall Dea, French Engie and Austrian OMV. At the moment, all these investors have announced the termination of financing of the facility.

In Russia, Uniper controls 83.7% of the Unipro generating company, which includes five large TPPs with a total capacity of 11.2 GW. These are Surgutskaya GRES-2 (5.6 GW), Berezovskaya (2.4 GW), Shaturskaya (1.5 GW), Smolenskaya (630 MW) and Yaivinskaya GRES (1 GW).

The nationalization of Uniper, if it will be implemented, will take place according to a “soft” scenario, taking into account the interests of the current beneficiaries, according to Pavel Ikkert, managing partner of the law firm “Ikkert and Partners”. He explains that “with an extremely high probability” this will not be a classic nationalization, which involves the forced transfer of property rights and assets in favor of a new owner represented by the state or an organization representing its interests without compensation for the value of the transferred assets.

“With a much higher degree of probability, the process of changing the owner will resemble a market transaction, within the framework of which Fortum will receive compensation corresponding not only to the current value of the asset, but also, possibly, taking into account the profit that the Finns will not receive in the foreseeable future due to the loss of control over Uniper,” explains Ikkert.

According to the lawyer, how the state will deal with the current owner will determine the attractiveness of the energy market of Europe’s largest economy for foreign investors for years and even decades. “For Germany, taking into account the need to implement its own energy strategy without the participation of foreign capital, it will be very difficult to abandon nuclear energy and the use of hydrocarbon raw materials,” he believes.

Uniper will most likely sell its assets in Russia to Russian players, believes Sergey Grishunin, managing director of the NRA rating service. But the nationalization of the company in Germany will significantly slow down the sale process, so it will lead to the requirement of approval at the level of the German government, and then – by the European Commission, the expert notes.

Ickert believes that the change of ownership of Uniper will not have a significant impact on Russian assets. “Most likely, these assets will not be put up for sale right away, because now they can only be sold for nothing,” the lawyer notes. “One of the solutions to future problems can be the acceleration of the German company’s exit from Russia, which can help Russian buyers get a more interesting price for the objects,” Grishunin assured.

But, according to Ickert, there is also a possibility that nationalization will affect only Uniper’s property, that is, highways, warehouses and infrastructure, but will not affect the ownership structure of the joint-stock company (with compensation). Then the realization of the property of the company, which was left without key assets that brought it income, both as part of bankruptcy and at the initiative of shareholders, is more than likely in the foreseeable future, the lawyer believes.

Leave a Reply

Your email address will not be published.