Germany agrees to bail out energy giant Uniper as Russia cuts gas supplies

Uniper is in talks with the German government about a possible bailout.

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Germany on Friday agreed to bail out Uniper in a 15 billion euro ($15.24 billion) rescue deal as the embattled energy company became the first major casualty of a shrinking Russian natural gas supply.

The rescue package will see the German state take a 30% stake in Uniper.

The energy company was the first in Germany to raise the alarm about skyrocketing energy bills and filed a bailout for government support earlier this month. As Germany’s largest gas importer, it was hit hard by severely reduced pipeline flows from Russia, which sent prices soaring.

In a statement, Finnish majority owner Fortum said Uniper and the German government had agreed on a “comprehensive stabilization package” to provide it with financial relief.

“We are experiencing an unprecedented energy crisis that requires robust measures. After intensive but constructive negotiations, we found a solution that satisfactorily meets the interests of all parties involved,” Fortum President and CEO Markus Rauramo said in the statement.

“We were driven by the urgency and need to protect the security of supply in Europe in a time of war.”

Russian gas supplies to Europe have fallen since the unprovoked invasion of Ukraine earlier this year and subsequent sanctions imposed on Moscow by the West.

According to Fortum, Uniper has only received “part of its contracted gas volumes” from Russian gas giant Gazprom since mid-June, meaning it has had to buy gas at much higher spot market prices. This has serious implications for Uniper’s financial position, Fortum added.

— CNBC’s Sam Meredith contributed to this report.

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