German gas giant seeks $53 billion bailout – Reuters

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The government is rushing to rescue Uniper to avoid a domino effect across the country’s energy sector

Berlin will have to come up with an extra €25 billion ($25.8 billion) to bail out the country’s largest gas importer Uniper, Reuters reported on Wednesday.

The deal that will bring the utility’s nationalization cost to €51.5 billion ($53 billion) includes credit lines, equity injections and also reflects a scrapped gas levy, initially designed to help German gas suppliers handle rising costs, according to the media outlet.

The company was brought to the brink of bankruptcy due to surging energy prices and halted gas flows from its main supplier – Russia. Earlier this month Uniper reported a staggering €40 billion ($41 billion) net loss through September. The company cited shrinking deliveries from the sanctioned country as the major reason because it was forced to buy natural gas on the spot market at much higher prices.

German authorities will subscribe to authorized capital of up to €25 billion ($25.8 billion) to cover losses from outstanding Russian gas volumes until 2024, Uniper said on Wednesday, citing the latest agreement.

“Without this relief, our customers, including many municipal utilities, would inevitably have faced an even higher wave of costs,” Uniper CEO Klaus Dieter Maubach said.

The company, which is reported to have suffered one of the biggest losses in German corporate history, was originally set to receive a €30 billion ($30.9 billion) aid package by the end of the year from the government. Berlin fears that if Uniper fails to stay afloat it could have a domino effect on the country’s energy sector.

For more stories on economy & finance visit RT’s business section

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