Germany's Uniper gets 15 bln euro state bailout

STORY: German gas company Uniper is getting a government bailout.

It's worth 15 billion euros, or about $15.2 billion.

The company has struggled after Russian gas supplies fell in recent months.

German Chancellor Olaf Scholz:

"We have talked to the shareholders and the Finnish government, which has a stake with the shareholders, and we have agreed on a solution. The solution is that we will buy into Uniper with a 30 percent stake in the company."

The government will make available over 7 billion euros in extra capital, while state lender KfW will add a similar amount to an existing credit line.

Buying the 30% stake will cost about $272 million, but there are conditions Uniper must follow.

It can’t pay dividends during its stabilisation period, and it must end a lawsuit against the Netherlands over its coal phase-out.

Friday’s agreement will though allow Uniper to pass on higher gas prices to customers.

Scholz said authorities were looking at relief measures.

"(English) You'll never walk alone (German) that we overcome the difficult times together, that we stick together, that is crucial. No one is left alone with their challenges and problems, not one single citizen, not even the companies in this country. "

The package still needs approval from the European Commission, and confirmation of Uniper’s rating by agency S&P.

Uniper, majority-owner Fortum and the German government will now work on a long-term solution for the company.

The aim is to reform the firm’s wholesale gas contracts, which have exposed it to billions in losses.

They want to agree on a longer-term fix by the end of next year.

Shares in the firm fell by a quarter after the announcement.

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