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Russian gas crisis prompts Uniper bailout talks

Energy giant Uniper has entered into bailout talks with the German government as dwindling Russian gas supplies to Europe drove prices for the fuel higher.

“Uniper entered into discussions with the German government on possible stabilisation measures,” the energy company said in an ad-hoc statement late on Wednesday.

The options available to the group included extending further credit lines from the public lender KfW or an equity investment in Uniper.

Russian energy company Gazprom reduced deliveries via the Nord Stream pipeline to Germany by 60 percent in mid-June, attributing the move to a delayed repair.

The German government has dismissed Gazprom’s technical justification for the cut, instead labelling it a “political” decision in retaliation for the West’s support for Ukraine after Moscow’s invasion.

Following Gazprom’s decision, the German government raised the alert level under its emergency gas plan, bringing it a step closer to rationing the fuel.

Uniper was receiving “only 40 percent of the contractually committed gas volumes from Gazprom”, it said.

The gas squeeze forced the energy provider to buy short-term substitute supplies “at significantly higher prices”.

The purchases were necessary “to ensure security of supply for its customers”, it said.

But the higher cost of the energy could not currently be passed on, leaving it with “significant financial burdens”.

Uniper was already under stress from rising gas prices at the end of 2021, CEO Klaus-Dieter Maubach said in a statement, with the company securing a credit line from the KfW.

Since then, the situation had “noticeably deteriorated due to the war in Ukraine,” Maubach said.

The lack of clarity surrounding the “duration and scope of Russian gas supply restrictions” left the outlook for the company uncertain, with future gas prices “difficult” to predict, Uniper said.

In light of the precarious situation, the Dusseldorf-based group withdrew its financial guidance for the current fiscal year.

Uniper also said it expected adjusted net profits for the first half of the year to be significantly under their level of 2021.

Shares in Uniper were down 14.2 percent at 14.20 euros ($14.81) on the Frankfurt Stock Exchange around midday local time (1000 GMT).