Germany and Finland’s cross-border wrangling over Uniper is nearing its end. Berlin on Wednesday effectively nationalised the stricken energy company by injecting 8 billion euros in fresh equity, and paying 78% Finnish state-held shareholder Fortum token compensation in return. The initial impression that Germany has the best of it depends on what happens next.
token compensation in return. The initial impression that Germany has the best of it depends on what happens next.
Fortum boss Markus Rauramo has good cause to concede that his company should feel “humble” about the current. In recent years Fortum had fought tooth and nail to build up its stake in Uniper, a jumble of Swedish low-carbon and German gas supply assets, and spent 7 billion euros doing so. At the lowly 1.70-euro-a-share price at which Berlin is injecting equity and buying out the Finnish group, Rauramo will only get 500 million euros for his stake.
That said, Fortum also gains from extricating itself from the Uniper mess. The German company last month recorded a 12 billion euro half-year net loss from soaring collateral demands on loss-making derivative trades, and the need to pay exorbitant prices for gas that it no longer gets from Russia but still needs to supply to customers. Deconsolidating Uniper’s losses from its accounts means Fortum’s balance sheet equity will therefore be 5 billion euros higher than it would have been.
Even so, Germany is now squarely on the hook for future Uniper hits. If wholesale gas prices stay sky-high and angry German consumers make it hard for the government to pass on high gas import prices, Habeck could always lumber Uniper with more losses. While the distribution of pain is now more rational, it’s not yet clear whether officials in Berlin or Helsinki will ultimately wind up more glum.
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