Fortum on Friday was revealed that the nearly 15 billion euro stability package consists of three core parts.
The German state will take a 30 percent stake in the troubled energy company by subscribing to approximately 157 million new shares with a nominal value of 1.7 euros per share. Germany also promised to provide the company with a maximum of 7.7 billion euros of capital against the issuance of mandatory convertible bonds. The German state-owned investment bank KfW committed to provide approximately seven billion euros in liquidity support by increasing its current credit limit from two to nine billion euros.
Fortum remains Uniper’s largest shareholder, but as a result of the package, its holding will drop from 78 percent to 56 percent.
Markus Rauramo, Fortum’s CEO, estimates that the rescue package is a significant step in restoring Uniper and Fortum’s stable footing. However, further actions are needed to create a long-term sustainable foundation for Uniper’s gas business.
Tuppurainen emphasized on Friday that the agreement fulfills the core goals of ensuring that taxpayers’ money is not needed for the rescue package and that Fortum does not need to invest in Uniper. He acknowledged that it remains possible that the troubled company will impose more costs on taxpayers in the future.
“What will happen in the future remains to be seen. We are still in a difficult situation. We are by no means in calm waters. On the contrary, Russia continues the energy war against Europe.
He estimates that the key feature of the agreement is that it limits the risks that German energy policy decisions may cause to Fortum. Uniper has had to sell natural gas at a lower price than its purchase price, because the availability of cheap natural gas from Russia is limited. With the agreement, however, the company can transfer up to 90 percent of the higher purchase prices to its customers starting in October.
The German government promised to cover losses of more than seven billion euros caused by the waiting period. The additional financial support does not reduce the shares of the current owners.
Tuppurainen said that Finland considers it important that German consumers start paying more market-based prices for natural gas, because it affects not only Fortum but also Europe’s green transition.
Uniper’s water and nuclear power assets, he also reminded, make the company still valuable to Fortum and Finns.
Riikka PurraThe chairman of the Basic Finns saw that the agreement is a sign of the partial nationalization of Uniper.
“How could they accept such priority for German loans?” he asked. “It would be reasonable to demand that Uniper’s current owners have the opportunity to get their shares back at the same prices when the acute crisis is over.”
Aleksi Teivainen – HT
Source: The Nordic Page