Germany working on historic takeover of three gas companies – The Irish Times

Germany is in advanced talks to take over Uniper and two other major gas importers in a historic step to avoid a meltdown in its energy market, according to people familiar with the matter.

Public ownership of Uniper, VNG and Securing Energy for Europe, formerly Gazprom Germania, is the main solution being discussed, the people said, declining to be identified because the information is private. Exact details have yet to be agreed, but a conclusion could be reached in the coming days, the people said.

Soaring gas prices and Moscow’s decision to tighten supplies in Europe have already prompted a series of government bailouts and bailout loans. But these measures are increasingly overshadowed by the scale of the crisis and there is a risk that systemic energy providers will collapse without stronger government support. A coordinated attack on the three companies would mark a sharp escalation in Europe’s response to Russia’s economic warfare.

With the main pipeline from Russia to Germany cut, Uniper has to source supplies alternatively and is racking up losses of up to 100 million euros a day, according to its chief executive.

Uniper and SEFE did not immediately respond to requests for comment. Fortum Oyj, Uniper’s largest shareholder with a 78% stake, said it could not comment while negotiations were ongoing. Spokespersons for Germany’s economy ministry and VNG declined to comment.

Asked about the nationalization plans, German Economy Minister Robert Habeck said: “Things are complex, we are working on it very carefully.”

One such complication is Finnish utility Fortum, which still owns the majority of Uniper. He has given loans to his unit in the past but made it clear earlier this year that he did not want to continue giving loans. The government has already agreed to take a 30% stake in Uniper.

VNG, which supplies gas to about 400 municipal utilities and industrial operators, filed for state aid last week. The additional cost to replace Russian streams to fulfill its own contracts is expected to climb to 1 billion euros this year, its parent company EnBW said.

Taking ownership of SEFE is also tricky as there is a risk of funneling funds into Moscow. In July, German officials opened the door to the nationalization of SEFE, passing a law allowing the government to take a stake in companies under its control against the wishes of their owners.

In the case of SEFE, which has been in trusteeship since April, the owner is an unclear Russian entity called Joint Stock Company Palmary, to which Gazprom sold the subsidiary in April. However, the law may oblige the German government to compensate the former owner. —Bloomberg