The German government is set to become the majority shareholder in Uniper, Germany's largest gas importer, in an effort to prop up the company in the wake of Russia's decision to end all gas deliveries to Europe's biggest economy.
Following the completion of a capital increase and the acquisition of Uniper shares from Finnish state-owned energy company Fortum, the German government will own around 99 per cent of Uniper, the Economy Ministry said on Wednesday.
Uniper has been buffeted by recent contortions in the energy market, ever since Russia cut off gas supplies to Germany through its Nord Stream 1 pipeline, claiming maintenance is needed, but cannot be conducted due to Western sanctions.
As a result, Uniper has been facing severe financial problems, as its clients still expect fuel, even if the Russian supply has dried up. Uniper has therefore had to spend far more than planned buying up gas on the open market to fulfil its contractual obligations.
"The further increase in replacement procurement costs has exacerbated the plight of Germany's largest importer of Russian gas," the Economy Ministry said.
The acquisition of the shares can only take place after the fulfilment of various regulatory requirements, as well as approval at Uniper's general meeting and from the European Commission, the ministry said.
"Uniper is a central pillar of the German energy supply," it said. "Through the majority takeover decided today, the federal government will acquire the essential rights of co-determination and control at the company in order to be able to ensure security of supply in Germany."
Uniper already received a bailout from the German state earlier this year, but the situation has worsened to the point that a takeover was necessary to ensure the company is able to stay afloat.